Kima Ventures Will Allow Startups to Raise $150K Within 15 Days Via AngelList

http://techcrunch.com/2013/12/04/kima-ventures-will-allow-startups-to-raise-150k-within-15-days-via-angellist/

by adelivet • 13 years ago

41 45 13 years ago

techcrunch.com

arikrak• 13 years ago

I wondered why no firms were doing that: https://news.ycombinator.com/item?id=6730152

deathflute5• 13 years ago

What do you guys think about the terms of the deal? Isn't 15% a lot to give out for just 150k?

minimaxir• 13 years ago

Y Combinator is $20k (+ $80k maybe) for ~6% equity.

jahewson2• 13 years ago

The $80k is a convertible note though, so expect it to be converted into another ~25% equity at that valuation.

michaelochurch2• 13 years ago

YC gets those terms because of what it does for a company's reputation, and the contacts made through YC itself.

rubbingalcohol• 13 years ago

To dismiss fund raising as a "distraction" as they do belies the importance and seriousness of choosing good investors that benefit your company, on terms that won't hamstring your growth later.

A "one size fits all" approach like what they're pushing sounds more like a pay day loan than a legitimate business partnership.

I worked with a startup that took a $150k seed-stage investment on a $1m valuation, but the terms and the investors were terrible. My partners and I were too inexperience to know we were being ripped off until the time came to raise real money and our first investors were blocking every funding attempt and giving us "counter offers" at significantly worse terms.

I'm not saying these people are doing this, or even that it's a bad deal, but I would advise serious caution and diligence in matters of fund-raising. It's worth spending more than 15 days to get a deal right. Properly funding a business is not a "distraction;" it's a primary component in running a business.

jber9• 13 years ago

Hello

Nope, we are not doing it ;-) Check my Angellist profile: http://angel.co/jberrebi

We have a very good reputation in this market and are helpful! You can check!

acemtp• 13 years ago

The good url is: https://angel.co/jberrebi

jaredmck2• 13 years ago

Terrible terms will attract terrible companies.

jber9• 13 years ago

Why do you think our terms are "terrible"?

deathflute5• 13 years ago

How did you guys arrive at 15% for 150K?

jhartmann• 13 years ago

Terrible is a strong word, but I don't think these terms are good for lots of companies. Each company is at a different stage when they first start raising seed funding. Some companies might just be worth 1 MM, but if you have a strong team, great technology, a workable plan, and early customer interest/revenue 1 MM is a horrible deal. In my opinion these terms are great for some ventures and absolutely horrible for others. I think the quick decisions are great, but I would think it would be more fair and equitable for you not to box the valuations. Perhaps offering a tiered option where higher value ventures take a little longer to evaluate, but I think boxing the valuation will have you miss the best companies. My two cents anyhow.

michaelochurch2• 13 years ago

My worry would be the board seat.

If I were to go out on my own, I'd quite possibly take those numbers ($150k for 15%) pre-MVP if it meant 2 years of autonomy. I wouldn't give a board seat up, though. I also think $100-150k per founder is a more reasonable infusion (1-2 years).

josh_fyi2• 13 years ago

These terms are so good that Kima may have put itself in a strange position of looking "too good to be true."

Standoffish arrogance in VCs is unpleasant, but it can signal that the VC is so successful that he or she doesn't need to be nice.

If only the straightforward approach worked!

jber9• 13 years ago

Ok, so the good strategy is to give a bad deal to entrepreneurs ? ;-)

josh_fyi2• 13 years ago

No, my point was not that. My point is that sometimes, showing how tough you are makes you appear more successful and more desirable--a type of signaling.

I'd certainly prefer a situation where no one has to do this, much less VCs!

acgourley• 13 years ago

I think it's an interesting move. I can tell most of HN seems to dislike this idea but I believe it's basically what incubators are offering without the usual smokescreen of "advice + intros"

I know nothing of Kima itself, they could be great or terrible investors - but that seems orthogonal to this idea which could makes sense for both parties in many cases.

adambenayoun2• 13 years ago

I am a co-founder at a startup that just graduated from 500startups and as part of my fundraising process, I decided to approach Jeremie.

I think what's this post is missing is some context, Jeremie is running one of the most active seed fund in the world (200 investments is no feat) and they have a stellar reputation which is why I approached him - I did some due diligence with other entrepreneurs who provided me great recommendations as well.

Jeremie turned us down for various reasons but did in a timely manner and was being very honest about it (no sugar-coating or stalling the process to keep the door open like most VCs do).

I think if you're looking to take money from an unknown investor (who has made almost no investment), you should be doing your due diligence. However with a network of 200 backed companies - making a due diligence can be fast and take just a few days and I also think you should do that prior applying to Kima15 via Angellist.

Some cite the valuation not being favorable, however there are stages when your company is so immature and early that you shouldn't worry about over-optimizing for valuation and rather take some money at a lower valuation and move fast in order to make great progress that will let you close more money at a significantly higher valuation. If you are looking to build a company which might be the $100M-$1B valuation range then that low valuation will not have any significant impact on your outcome.

It is also very refreshing to see a seed fund publishing a SLA - I am looking at this as a very clever marketing feature - now people will remember Kima as the first seed fund that agreed to commit for a SLA for giving you an answer - one of the biggest pain in raising funds.

jber9• 13 years ago

Thanks Adam for your kind words. Still love a lot what you are doing at BinPress!

Good luck!

loceng• 13 years ago

Every 1% of a billion dollars is $10,000,000 ... just saying. :)

If it's your only option for money, then sure - though if you're that ready for investment where a firm will give you a response/money within 15 days (along with what due diligence are they doing on you?) then you should likely shop around. $150k for 14%, 13%, 12%?

Obviously it doesn't just come down to %. I'd rather give some people 10% or 15% or more if they were the right fit. :)

So overall it's a moot point, but it's also not in some circumstances. :)

throwaway893• 13 years ago

I've heard mostly negative things about Kima.

There's Jeremie's public negative statements about a company they invested in (Sparrow): https://news.ycombinator.com/item?id=4277331.

They're also very price sensitive, which can create resentment even in companies that take their money.

enraged_camel• 13 years ago

Use your main account if you want your comment to be taken seriously.

adambenayoun2• 13 years ago

They're price sensitive and are quite open about it - I don't see why it would create resentment?

If they are approaching you and are trying to negotiate a lower price while other investors are on board on a higher valuation (I saw this happens quite a lot), I think that would be the kind of behavior that would create resentment both on the other investors and founders side.

However I haven't experienced it and my experience was that they turned me down because my valuation was too high for them and out of their comfort zone - did they try to negotiate me to a lower valuation? No.

lettergram• 13 years ago

I know I wouldn't invest or accept an investment without being able to meet the founders face-to-face. That is part of why Y Combinator has been as successful as it has been, it offers less funding and more networking. The later being what a founder needs just as much OR MORE.

taskstrike• 13 years ago

We raised money from Kima after our incubator. They have a fast process and understand technology well.

This is much better than incubator terms, and if I had this before committing to a incubator, I would have done this instead.

wellboy• 13 years ago

To the naysayers, the biggest downside of fundraising is just the insane distraction and time it takes to get through that process.

Kima Ventures has simply understood that and has solved that problem.

There are a lot of startups for whom it would be detrimental to have investors who want to have a say in their startup, but who would have a lot of benefit make big progress by getting $150k fast.

If you position yourself as the brand to get all these startups, you will inevitably scoop up some of the really big hitters.

tocomment2• 13 years ago

Any advice for someone in the early idea phase? What steps would one do before applying to this?

liamgooding• 13 years ago

GSD (Get Shit Done) and get some traction. Without traction, you're just a guy with an idea in a queue of thousands...

tocomment2• 13 years ago

I thought the purpose of this type of funding was to fund the idea stage, so you wouldn't need traction yet.

malandrew• 13 years ago

I can see this as being great for inexperienced founders looking at getting funding for their first stab at being an entrepreneur. However, any founders that are talented and have worked as an engineer at at least one moderately or highly successful company should be able to raise money on much better terms. Giving up 15% for $150k seems pretty steep, especially when the investor in question is spread so thin. Money and maybe occasional introductions are going to be pretty much the only forms of involvement that the investor could realistically invest in you.

Kima Ventures Will Allow Startups to Raise $150K Within 15 Days Via AngelList

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