Back in college, I asked a friend why – even though they didn’t like the professor – they didn’t drop their painting class. Their reply – it gave them a space and a time to focus on painting, and their disagreements with the professor helped them better articulate the goals of the work.
Excelerate Labs in Chicago is now taking applications for their ~12-week mentorship program for early stage startup founders. Like the legendary YCombinator program, Excelerate provides a small amount of capital (< $20k) in exchange for a percentage of the company. It seems to me, the goal for the startup founders in either the Excelerate or YCombinator program, is to use the introductions, connections, and 3 months of focussing on their project's value proposition to transform that <$20k investment into much more through pitches to larger investors. The professional introductions, mentorship, and focus these programs offer are hugely valuable for any professionals on-going success. Though - at the <$20k level - the success of the specific project is mostly irrelevant. In fact, I'm guessing these mentorship programs make their money back for the entire program in 1 successful company. My 4.5 years of formal education was financed through a combination of loans, credit cards, friends & family, and part time jobs. During that time, my primary job was to focus on developing salable skills that I loved. My tuition payments purchased the time & space to do so. I left college with <$20k in loan debt and a monthly reminder to get a return on my investment as quickly a possible. Unlike Excelerate or YCombinator, my loan providers didn't ask for a percentage of my future earnings (which could be possible through an income contingent loan). Instead they opted for a fixed monthly payment – arguably a decreasing percentage of my future earnings.
Late last year, I figured building a prototype for a custom web-based software takes 12 weeks. If you’ve estimated the duration for building a website, I’m sure this is a familiar timeframe. I’m also sure it’s no coincidence both the startup mentorship programs mentioned above use this timeframe.
It’s extremely difficult to do anything new & meaningful in less time.
And <$20k is a relatively easy amount to raise for the time and space to focus on building a revenue-generating project. What if, rather than providing startup founders with this money in exchange for a percentage of their project - mentorship programs charged the startup $5k/month and took no percentage. Seed tuition rather than seed investment. The mentorship programs could still offer the same connections, introductions, workshops, and focus - but the founders' incentives would be different as would the stakes for the mentorship program. The thing that feels closest to is a Masters of Fine Arts program where the students enter with a project idea and spend 2 years executing it. Maybe that's just my BFA talking.
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