The Great Startup Famine of 2015

Starting (if you’ll excuse the pun) with bad weather in the Spring of 1315, universal crop failures struck Europe creating what became know as The Great Famine. It lasted through 1316 and well into 1317 from Russia and Great Britain all the way down to Southern Italy.

Angels Bootcamp has just announced that it is to train over 1,000 new angel investors by 2015 starting this June in Berlin. We should all cheer the announcement of Angels Bootcamp, which aims to do what it says on the tin:

AngelsBootcamp is targeted at executives, entrepreneurs and finance professionals who have money in the bank to put into tech startups but who lack the knowledge about exactly what an angel investor should do.” (as TNW reports)

But Berlin, we have a problem.

While I heartily support anything which will accelerate Europe’s entrepreneurs (especially if it helps consolidate London’s position as Europe’s leading tech startup hub) where is the money going to come from so that all these newly invested startups can continue after their first $250,000 or $500,000 of investment?

It’s a metaphorical stretch, but there’s no point encouraging people to start a large family, if they won’t be able to feed themselves!

Europe and even London, Europe’s foremost tech cluster, already has a funding gap for adolescent startups. In actual fact, so does New York’s tech cluster.

“New York and London have more than 70 percent less risk capital available than Silicon Valley for Startups in the early, Pre-Product pre-Market Fit” Stages of the Startup Lifecycle.”  Startup Genome Report

And moreover even at the end of the rainbow, in the home of funding-food and plenty Silicon Valley, startups are experiencing an issue with follow on funding. Check out the graphs below, tracking the number of seed deals versus Series-A for U.S. startups: (courtesy Techcrunch, read the full article here)

 Capturegraph Capturevc2

“The “crunch” is perceived because of the boom in seed funding, which has brought a greater quantity of startups to the table looking for Series A funding…” (from the article Mining The Crunch)

Europe must find a way not to end up with a worse funding famine that of Silicon Valley now, which is that hundreds of startups funded by Xoogler’s and X-Facebooker’s are going bust -or becoming startup zombies– because they are either not worthy of further funding or because the market cannot sustain so many startups.

At a macro level, many of the much larger funds – the grandfathers of the tech VC in the U.S. and Europe – don’t perceive a problem. Possibly because they invest later stage and have extremely large funds (so are somewhat detached from the mass of earlier stage startups) or perhaps because those famous names get the very top pick of deals.

I was lucky enough to get Felda Hardymon from BVP on my panel at the recent Innotech Summit, along with Steve Schlenker from DN, plus others from Silicon Valley and L.A. to discuss this very topic (we even managed to co-opt Boris Johnson, the Mayor of London).

Boris gets to grips with a transatlantic Google Hangout

Boris gets to grips with a transatlantic Google Hangout

Perhaps not surprisingly (given that Felda has been at BVP since 1981 a full 16 years before I did my first startup) I agreed with almost every word Felda said. All of which was extremely insightful except that there isn’t a funding gap for startups in Europe.

There’s not a lack of capital for sure, but capital which people are prepared to risk at that critical, very high risk, very early stage of the startup life cycle? For sure there’s a dearth.

Perhaps the Series-A problem is that the whole approach to funding at that stage of a startups lifecycle needs to change, as one or two people I spoke to afterwards suggested.

After all, seed funding and angel funding has evolved immensely even in the last 5 years. But until that mid-stage funding environment does change, or until we teach our startups how to make a whole lot of revenue very very early on, it means that we need to educate our new European Angels not to make un-fundworthy investment decisions(!).

At the same time as a community we must find ways to open up the $1m to $4m investment bracket to more startups, by lobbying those with capital and the government for favourable incentives, alongside championing the value of technology startups both to society as a whole and as a vehicle for investment.

Venture investment (realistically, Series-A and above) create jobs. Fact. As crusades go, that's a good a reason as any. (Read Nic Brisbournes full post)

Venture investment (realistically, Series-A and above) create jobs. Fact. As crusades go, that’s a good a reason as any. (Read Nic Brisbournes full post on his excellent blog, which is where I stole this graph from)

In summary, Angel Bootcamp will go head and I wish it every success, but something needs to happen in the Series A world too, and there is much less chatter about solutions for this, or even talk of the problem, unless of course you’re a Founder trying to raise a Series-A round in Europe, and then you talk of nothing else..!

Europe did not fully recover until 1322 from the Great Famine of 1315, and while medieval starvation on a grotesque scale is more a human tragedy than any future mass deadpooling of startups, however severe, we should ask what can be done to ensure the tens of thousands of potential European jobs and startup Founder’s dreams, are not wasted away for lack of follow-on funding or Series A.

While supply and demand and market forces are one answer, I’m not sure a pure Friedman-esque approach to this growing problem is the only solution we should rely on.

Tech Start-up Incubators and Seed Programs

UPDATE 3: Aug 2013: Visit www.f6s.com for a global list of accelerator programs

UPDATE 2: List of 7 niche accelerators in the US for specific verticals

UPDATE 1: Bumped in to this list which is a bit more thorough

For a list simply of co-working spaces, here is a good one, or there is also a list of other resources at the bottom of this post.

Some start-ups I take to or advise are not well versed with the start-up or incubator programs which are open to them.

Often, if they’ve heard of them, they are sometimes worried about losing control or being dicatated to by outsiders if they join the program. This is the wrong way to look at incubators. In fact – especially the US incubators – usually offer pretty good terms and a host of other benefits, such as introductions to follow on funding and free access to experienced mentors.

In the case of the famous incubators such as Paul Graham’s Y Combinator (whose model which has been copied by many) merely having been chosen by it means you are signficantly increasing your likelihood of funding.

*** This is an imperfect list, cribbed shamelessly from different places including you the readers, Quora and elsewhere – please add missing ones at the end of this post thanx! ***

Industry Specific Accelerators

Health http://rockhealth.com/

USA

US West Coast Silicon Valley, Incubators

Y Combinator, www.ycombinator.com Mountain View, CA

The Founder Institute, www.founderinstitute.com  SV and San Francisco

I/O Ventures, www.ventures.io  Mission Area in San Francisco

Plug and Play, PATC, www.plugandplaytechcenter.com  Sunnyvale, Redwood City and Palo Alto among others

AngelPad, www.angelpad.org  SOMA area in San Francisco

Summer@Highland, www.hcp.com/summer  Menlo Park and Lexingon, MA

New one: 500 startups Accelerator Program, www.500startups.com  Mountain View, CA

Dog Patch Lab, www.dogpatchlabs.com  San Francisco, CA

Xconomy http://www.xconomy.com

SF-based RockHealth which has partnered with the Mayo Clinic and Accel http://rockhealth.com

West Coast collab / co-working spaces

TechShop Scientists, steampunkers, inventors, technology manufacturers, and hobbyists with over 700 members in Menlo Park, 600 members in San Francisco, and 300 members in Raleigh

The Hub San Francisco and Berkley, with international network of sister spaces around the world – with 31 spots and each one interlinked

Incubators in other US Cities

TechStars, www.techstars.org  Boulder, CO and Boston, MA

Launch Box, www.launchboxdigital.com  Washington, DC

DreamIT Ventures, www.dreamitventures.com  Philadelphia, PA and New York, NY

Alphalab, www.alphalab.org  Pittsburgh, PA

Shotput Ventures, www.shoputventures.com  Atlanta, GA

Capital Factory, www.capitalfactory.com  Austin, TX

Gangplank http://gangplankhq.com/ Free to members in return for supporting the place, 260 South Arizona Avenue Chandler, AZ 85225

MidVentures, www.midventures.com  Chicago, IL

Excelerate, www.exceleratelabs.com  Chicago, IL

Momentum www.omentum-mi.com West side of Michigan

Start@Spark Boston, MA, and New York, NY,

MidVentures http://www.midventures.com

Betaspring, Providence, RI

Better Labs, San Jose, CA

Bizdom U, Detroit, MI

Excelerate http://www.exceleratelabs.com

http://masschallenge.org  Boston, MA

http://www.launchpad.la  Los Angeles, CA

Collab / Co-Working Spaces

IndyHall http://indyhall.org/ 20 North 3rd St, Unit 201, Philadelphia, PA 19106

New York, USA Collab / Co-Working Spaces

New Work City the “grandaddy” of NYC coworking spaces as it has been operable for the past 4 years. Located at 412 Broadway in Little Italy; drop in day rates available, max 80 people.

Most NYC collab spaces below have long waiting lists apparently.

General Assembly at 902 Broadway in the Flatiron. The 20,000-sq ft “campus,” opened in January 2011

WeWork Labs at 154 Grand Street, is a co-working hybrid founded in April 2011 by Adam Neumann

Projective Space (formally known as SohoHaven) was created by three brothers, James Wahba, Johnny Wahba, and Tim Wahba, located at 447 Broadway in Soho (5500 sq ft)

Dogpatch at Union Square at 36 E 12th St, also have places in SF and Cambridge, MA. Dogpatch NYC is full aparrently.

Hive at 55

Tech Space

Greendesk

Greenspaces

Coworking Brooklyn

WeCreateNYC

Israel

The Time – http://thetime.co.il

Incentive – http://www.incentive-il.com

Granot Ventures – http://www.granot-ventures.com

JVP Studio – http://www.jvpvc.com

Xenia – http://www.xenia.co.il

Lool http://lool.vc

United Kingdom

London, Silicon Roundabout

White Bear Yard  –  http://whitebearyard.com  and http://passioncapital.com

HackFwd  –  http://hackfwd.com

The Hub  –  http://westminster.the-hub.net/

Collab Start-up / Co-Workspaces

www.techhub.com  – Shoreditch, Old Street Roundabout

http://www.theiw.org — Clerkenwell, Smithfield

http://club.workspacegroup.co.uk  — Clerkenwell & Leathermarket, Bermondsey

http://kingscross.the-hub.net/ The Hub at Kings Cross

Rest of UK

The Difference Engine http://thedifferenceengine.eu

Springboard http://springboard.com  Cambridge, Cambs

Entrepreneurs for the Future Incubator Birmingham, UK. Birmingham Science Park Aston, Holt Street, Birmingham, B7 4BB @entrepreneurs4f

Oxygen Accelerator Accelerator Birmingham, UK. Birmingham Science Park Aston, Holt Street, Birmingham, B7 4BB @oxygenaccel

Ignite100 Accelerator Newcastle, UK. Suite 20, Adamson House, 65 Westgate Rd, Newcastle upon Tyne, NE1 1SG, UK @particular_matt

Startupbootcamp Accelerator London, UK.  @SBootCamp

Collab Start-up workspaces

FlyTheCoop http://flythe.coop  Manchester

Old Broadcasting House http://www.oldbroadcastinghouse.co.uk Leeds

www.theskiff.org  Brighton

My Catalyst Co-working Leeds, UK. Shine, Harehills Road  @jasondainter

Germany

Berlin, Silicon Alee

Startupbootcamp Accelerator London, Berlin.  @SBootCamp

Ireland

Incubators

http://nbtstartups.com/ – Cork, Ireland

Co-Working Spaces

TBA

Europe

Norway

Ignitas Accelerator, Oslo, Nedre Vollgate 4 @ignitas

Global

or Countrywide Directories of Co-Working spaces

Loosecubes Evangelical about co-working

European Co-Working Spaces A list on an external website

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