App Development in exchange for equity
Josh@RRW has profiled an interesting startup called Prototype Invest. The company is a unique kind of early stage investment firm.
Instead of providing capital in exchange for equity, the company provides programming and design skills to interested entrepreneurs. This would be particularly helpful to build a prototype for entrepreneurs who, have the idea but dont necessarily have have the needed technical-programming skills. “Think of us as a Venture Capital firm providing software, web applications and guidance, instead of money”, is how they describe themselves. In return, they take a small equity stake in the company.
The idea is pretty unique in terms of what one would expect from a investment firm. Whether the concept is successful and the idea is disruptive - we’ll have to wait and see.
What do you think - would such a model work ?
April 28th, 2008 at 11:55 pm
Actually I’m looking for this kind of people who will do this work and take stake ..I’m googling all the way and At last its here.I’m engineering student studying my second year ..I think I’ve a cool idea its not web2.0 weird stuff ..Could U pass me their contact details ..Bye
April 29th, 2008 at 11:51 am
well the idea is unique but being different works in marketing a product or service. who would want to give a stake in a company just for getting a software developed. why would i not hire somebody instead. if my idea is really disruptive and has everything required than why in the hell would i share my gains. they are lots of guaranteed government schemes for financing startups.
April 30th, 2008 at 6:20 am
Outsourced product/prototype development for startups seems to be gaining popularity. May be you guys already know.. GlobalLogic has launched a service called ‘Version 1.0′ specifically with the above objective…
http://www.globallogic.com/indus_diff/ver_overview.shtml
May 5th, 2008 at 11:37 am
@naman
you give up equity stake even if you go in for VC funding. This is similar, only difference being that instead of capital, you get access to the product / software.