Posted: April 23rd, 2010 | Author: Robert Shedd | Filed under: posts | Tags: bootup labs, seed stage accelerator programs, startups | 3 Comments »
Danny Robinson from Bootup Labs posted an apology for the unfortunate events that recently unfolded. His ‘personal learnings’ are certainly good things for him to come to a realization on. However, Bootup has a long road ahead of itself in its quest for restoration.
The early stage startup community is a small one, and the way that seed accelerators differentiate themselves is by attracting the best founders and then building a clear history of sustainable companies that move on to the next phase. Unfortunately for Bootup, rather than founders learning about the program by hearing of some fabulous startup that emerged from the program, this mud-stained history of founder/investor issues is going to cloud their reputation. As founders have choices and are going to select accelerators that have been able to demonstrate a strong value-add, recruiting the next class is going to be extremely difficult for Bootup, I suspect. Comments at Hacker News show how greatly the program is burned and the first page of Google results is now half filled with this mess. It’ll be interesting to see how the program progresses and what they can salvage from this. Powerful lessons for the other startup accelerators and for how to conduct your operations in general.
Posted: April 15th, 2010 | Author: Robert Shedd | Filed under: posts | Tags: bootup labs, seed stage accelerator programs, startups | 3 Comments »
Lots of rumblings in the startup accelerator world today about Bootup Labs in Vancouver. Unfortunately, it’s a cautionary tale for founders.
Statusly founder Jaime Martin blogged that his company had been removed from Bootup Labs:
“…Danny Robinson calls us into his office and tells us what we were so scared was going to happen, he tells us that they weren”t able to secure as much money as they originally anticipated. Basically that they”re really embarrassed, that they”re going to have to let us go…”
Jaime describes how his team moved to Vancouver on a handshake deal with Bootup, was then initially told their was a delay with closing the funding, but that the funding never arrived. A few short months after starting what was supposed to be an 8-month – $150,000 program, they were out with nowhere to turn…
The early stage startup world is a small one. Accelerators build their reputation slowly, one successful funding, sustainable business model, or exit at a time. The decision to give up equity is a tough calculation – for accelerators, though, the cost/benefit analysis has always been skewed heavily in their favor by the huge benefits and successful track record of the programs. And founders clearly take on a lot of risk by picking up shop and leaving home/jobs/life to participate in the accelerator programs.
Clearly, it’s reasonable to expect that out of the 70 some accelerators programs, a few here or there might not be able to live up to their grand visions. However, when that happens, being created for founders by founders, you’d expect that the response from the accelerators would be quite apologetic, at the very least. In this case, that’s not the way it was handled and it’s made a bad situation worse, for both founder and accelerator.
Jaime’s position could have been most any founder and the startup crowd clearly feels for him (rightly so), based on the comments over at Hacker News.
Unfortunately, this story demonstrates the value of an accelerator program’s strong track record (and that of any investor), beyond the exits and fundings. Make sure you talk to founders who received investment from the accelerator or fund to find out what things are really like after you take money. Once you do, there is no undo button. (This being the first cohort of Bootup, unfortunately, it wasn’t possible for Jaime to talk to startups who had been through Bootup before.) Like so many other things, too, this shows the importance of handling situations the right way – startup founders, probably moreso than many others, understand that life happens and it doesn’t always go according to plan. But if that does happen, a little help and a lot less bluster would have gone a long way in this situation (despite TechCrunch comments to the contrary). The Google Shrine will preserve these posts and comments for future founders looking into Bootup. Clearly, if money is offered, someone will probably take it, but at least now, they’ll be able to do so with their eyes a bit more open.
Good luck to Jaime – the early stage startup world feels for him – it could have easily been any one of us…
For balance and the other side of the story, so you can make up your own mind, here are the other relevant links: Bootup posted their press release, and a move favorable account (for Bootup) of the story is on TechVibes (plus ReadWriteWeb has a totally backwards view of the situation). Also: comments from one of the Bootup founders.