In an interesting new twist on start-up crowdfunding, accelerator DreamIt Ventures Austin is partnering with AngelList to allow accredited investors to crowdfund the entire collection of incubating companies being assisted by DreamIt.
Each participating investor can contribute a minimum of $2,500, which will go towards all nine startups in the DreamIt Austin program. The investors cannot pick and choose the companies they invest in. Their funds – and any potential returns – are in all nine companies. While the incubator already provides office space, mentoring and up to $25,000 in seed funding, officials at DreamIt say crowdfunding could give start-ups the final push they need for a successful launch.
“This just gives companies in the Austin program some extra runway to get off the ground,” says DreamIt Ventures managing partner Kerry Rupp. “Founders will hopefully be able to spend more time applying [what they've learned from DreamIt] before having to raise more funding, too.”
The partnership with AngelList may serve as a model for universities that are seeking new ways to procure funding for university-based startups. As for DreamIt, it is projecting that each of its nine start-ups will receive up to $100,000 in additional investment from the new crowdfunding program.
“We’re looking at this as a test case in Austin,” comments Rupp, “but if it works well it may carry over to [DreamIt] programs in other cities.”