Where was OurCrowd when I needed them 10 years ago, back when I was trying to start a company and couldn’t find anyone to fund it?
For those who haven’t followed the torrent of press about the company lately, OurCrowd is the latest startup from serial entrepreneur and venture capitalist Jon Medved, who has founded some of Israel’s most interesting ventures in the last 20 years, including Israel Seed Partners in the 1990s and, more recently, the video ringtone firm Vringo. His latest endeavor aims to democratize the investment process, eventually allowing anyone to play angel and get in on some of the Startup Nation action that’s previously been restricted to high wealth individuals or larger firms.
OurCrowd does it by fusing the kind of crowd funding model made famous by upstarts like Kickstarter and Indiegogo onto a traditional investment partnership that sources deals from trusted colleagues and does the sort of solid due diligence serious investors expect. Once OurCrowd has identified and vetted an appropriate startup, it will present the company to the OurCrowd member base. Members can get into a company for as little as $10,000 and they can distribute their risk by investing in quite a few different companies in the OurCrowd portfolio, rather than needing to plunk everything into one alone, as in a traditional angel or venture capital investment.
Spreading the wealth is at the heart of OurCrowd’s DNA – the company is looking at up to 100 pitches a month and offers a term sheet (an offer, essentially) to 7-8 of them. OurCrowd has invested $20 million in 26 companies since it was founded less than a year ago. OurCrowd itself invests about 10% of that; the rest is from the “crowd.”
OurCrowd requires investors to be “accredited” – it’s not available to everyone just yet for legal reasons, explained Zack Miller, OurCrowd’s head of investor community, at an event held yesterday at the King David Hotel in Jerusalem, although that may be changing – in the U.S., at least. OurCrowd’s portfolio is mostly Israeli for now, but that too is not set in stone.
I go way back with OurCrowd founder Jon Medved – his Israel Seed Partners invested in my first hi-tech firm, Neta4, in 1998 – and we’ve remained friends since. I moved on to several other hi-tech positions with big companies before deciding to go out on my own for a couple more startup tries in the mid-2000’s. For those, I wasn’t able to successfully raise money.
That’s why I wish that OurCrowd was around back then. While it would be impossible to summon up hindsight and say whether OurCrowd would have invested in either company, they were both the kind of consumer Internet products (one was even a mobile app) that crowd funding investors today are flocking to sites like Kickstarter and OurCrowd to get in on.
At the King David Hotel meet-up, Miller and OurCrowd CTO Gadi Mazor used the example of Waze, which was recently bought by Google for over $1 billion, as a model for the kind of companies OurCrowd looks for – and how it hopes it will differentiate itself from other investment platforms. Waze succeeded, Mazor explained, in large part because it had a lot of key things going for it: serial entrepreneurs at the helm, a disruptive business model (make your own maps), traction (lots of users), and a concept that is easy to explain (avoid traffic). OurCrowd, similarly, has an experienced team, a disruptive concept, an increasing number of investors joining up, and an even faster number of startups polishing their PowerPoints.
I’ve since toned down my own entrepreneurial endeavors – I prefer now to write about startups rather than trying to create them – but for those founders who are following in my once fertile footsteps, I recommend making OurCrowd an early stop on the angel excursion.