Two-and-a-half months ago Einar Vollset and I announced TinySeed, the first startup accelerator designed for bootstrappers.
The response was overwhelming.
Hundreds and hundreds of tweets, re-tweets, likes, Hacker News upvotes, email responses…it was immediately obvious that there is pent up demand for this kind of alternative early-stage startup funding.
To catch you up, here’s a brief summary of TinySeed:
TinySeed is a remote accelerator designed for SaaS founders seeking mentorship from world-class experts, community with other talented founders, and enough funding to live for a year.
Our goal is to grow your company faster by helping you move from nights and weekends to full-time, and through guidance, advice, and mentorship.
And to do this without the headache of traditional fundraising, loss of control, or the pressure to build a unicorn ($1B valuation) or even raise another round of funding.
And apparently, the message resonated…
In less than 48 hours we received opt-ins from 3,800 founders, investors and onlookers.
And we received offers of support from successful founders who have raised funding, bootstrapped, and those who’ve done both:
+1 on that! Would love to chat and see how/if we can help
— Rand Fishkin (@randfish) October 12, 2018
very interested to see how you approach this. In general I'm eager to see people explore new ways of supporting entrepreneurs.
— Ryan Hoover (@rrhoover) October 12, 2018
I'm also very happy to help / get involved in any useful way!
— Joel Gascoigne (@joelgascoigne) October 12, 2018
This was the moment we knew we were onto something.
During the ensuing two-and-a-half months we’ve spoken with more than 100 founders and investors, worked on terms, and settled on the structure of the program.
Here’s Where We Stand…
TinySeed is remote, runs for a full year, focuses on SaaS, and on “non-unicorns” (companies that don’t aspire to grow at all costs to reach a $1B valuation).
To us (and most bootstrappers) $5M, $10M or $20M in ARR is a solid win for everyone involved (and much more likely than becoming a unicorn).
With that said, here are a few additional details about how TinySeed works:
#1: We Fund Companies in Batches
From the beginning, we knew we wanted to fund in “batches.” That is, a group of 10-20 companies going through the program together.
Einar went through YC in 2009 so he’s witnessed the benefits first-hand.
I’ve been a vocal proponent of mastermind groups for close to a decade, where you share your journey with other founders who are also slogging it out in the trenches.
Add to that the friendly competition it can spark, the lifelong relationships, and we believe it’s a superior approach to funding companies asynchronously. The founders we’ve spoken with agree, and are excited about the possibility of being part of a group of 10 or so companies all working towards similar goals.
#2: We Focus on Early Stage SaaS
We’re a SaaS accelerator, and accelerators focus on early-stage companies.
We don’t have a maximum revenue cut-off, but if you’re generating seven figures a year then TinySeed is probably not a fit 😉
#3: We Provide World-Class Mentorship
When growing a startup you don’t need mentorship every day, but when you need it, it’s game changing to have access to successful founders who have been down the road you’re traveling. There are no silver bullets in startupland, but sometimes a word of advice can keep you from making a bad hire, wasting time on a marketing approach, or save weeks of time exploring a dead end pricing change.
That’s why we’ve gathered some of the foremost founders and subject-matter experts who will provide guidance on topics ranging from copywriting to SEO, top of funnel marketing to CRO…and pretty much everything else you’ll face on the journey.
To date we have 25 TinySeed mentors on board, including: Hiten Shah, Joanna Wiebe, Jason Fried, DHH, Laura Roeder, Steli Efti, Patio11, and Rob Walling.
#4: We Succeed Only When You Do
Traditionally, venture capital has consisted of unicorn-hunting. VCs are looking to fund the next Facebook or Oculus Rift. If a traditional VC funds your business and it gets to $50m in revenue, generating $20m in profit year over year, it’s considered a miss.
On the surface that might seem ludicrous, but VCs are generally smart people and just like you, they have customers (their investors, also known as “LPs,” which are typically institutions like pension funds and university endowments).
Their customers demand a certain kind of return – one that can only be achieved by looking for businesses that have the potential to provide a 100x or 1000x return on their investment. On average, a unicorn is found less than 3% of the time.
You might think of TinySeed as an accelerator for the long tail of startups. These are startups (perhaps like yours) that will never become the next Facebook. And because of that, the traditional VC model will not work. We need a structure that allows our investors to get a fair return without the potential of finding a unicorn in the portfolio (otherwise investors will simply stop backing companies like yours).
To do this, we’ve arrived at a way for investors to share in the success of a company via profit sharing, but without sacrificing a company’s growth or its potential to raise future funding (should you decide to do that).
Essentially, we’ve found an approach that allows us to succeed when you do. And we’ll be announcing our terms when applications open.
Speaking of that…
Applications Open January 18th
I’m very pleased to announce that TinySeed applications open January 18th, and will run for about 6 weeks.
I’m excited to continue the conversations I’ve been having with talented startup founders interested in the TinySeed approach to startup funding.
Enter your email here to be notified when the doors open.