At Bloomberg Beta, we believe that there are exceptional individuals with great ideas who likely have the skills to build a company but lack the network or personal financial means to get started. So we’re announcing an experiment we’re calling Bloomberg Beta Beacon.
We will invest a small amount of capital — $100k to enable very, very early-stage founders to explore an idea, validate a critical hypothesis, or build an early prototype.
Why are we doing this?
We believe that technology startups play an essential role in delivering a better future, and we believe that we can speed the arrival of that future by investing as early as possible in the best founders who share these intentions.
Beacons are a source of light and inspiration, and we aspire to be a part of your trusted circle of friends, colleagues, and advisors in being a sounding board at the earliest stage.
- Between cheap cloud computing services, reliable communication and collaboration tools; and the proliferation of prototyping, low to no-code products; the cost of building software is very low. Combined with affordable services like Stripe Atlas to incorporate for as low as $500, most people only need a little bit of money to test a new idea. In these cases, even a pre-seed (<$1M) may be unnecessary this early, and founders will likely want to avoid too much dilution during this experimental stage.
- The tradecraft of startup building is more widespread than ever before, but many talented individuals who likely have the skills to build a venture-scalable company still lack the personal financial means and access to a network (of founders, angel investors) to take the leap. We acknowledge that not everyone has the means to work for free indefinitely, so we hope that these small investments can alleviate some of the personal financial risks and allow talented individuals to focus on building their business.
- We want to enable more founders, and we believe these investments have potential to increase diversity in the founder community. This is an effort we support across our investment criteria, Future Founders program, and a variety of partnerships focused on making Silicon Valley welcoming to people of all backgrounds.
The deal terms
- $100k via a SAFE. See our open sourced investment docs and accompanying explainer to see what our typical docs look like. Unlike our Seed investments, our primary intention here is to focus less on ownership and more on helping you hypothesis test quickly.
- You’ll have access to all the services we offer our portfolio founders, and our primary way of supporting you will be as sounding boards for any hypotheses you’re trying to test.
- We will have a different stance on investing in possibly-competitive companies — as opposed to our typically larger investments that seek greater ownership. As with any of our investments, our intent is to avoid investing in anything directly competitive, and we continue to recognize that what’s competitive is in the eyes of the founder. Given how early we’re investing in Beacon founders, we want to have open conversations with you to avoid foreclosing our future options as a fund to invest in services that may be too close for comfort.
What we’re looking for
Several of the overarching things we look for in startups apply to what we look for in Beacon investments — outlier founder potential, future of work relevance, geography (we focus on the East Coast and San Francisco Bay Area).
We don’t believe you need a deck or a product to be eligible for our Beacon investment. Instead, we’re looking for your thesis plan that, at a minimum, addresses four key questions.
- Why are you passionate about trying this?
- Who do you want to serve with what you build?
- What’s your hypothesis on why you can win?
- What is the critical hypothesis to test that you want to de-risk with this investment?
Conclusion
In our experience, the very best founders know how to experiment, iterate swiftly, and follow the right signals. We see founders as our customers, and having witnessed some of the best companies emerge from experiments, we’re inspired to experiment ourselves.
We’re encouraged by others who have taken their own approaches to support and connect founders at their earliest stages. Hats off to the teams at Dorm Room Fund and Rough Draft Ventures for their investments in university students; Lightspeed with their Summer Fellowship; Ryan Hoover’s Weekend Fund backing our next favorite products; and On Deck for creating such a formidable community of talented people exploring what’s next. Special thanks to our Summer Fellow Eric Liu, friends Stephen Merity, Nick Perry, Jen Yip, David King, Mason Tang, and our founder friends for reviewing earlier drafts and spitballing on the idea with us.
We hope that by providing the right amount of capital at the right time, we can help thoughtful, skilled individuals embark on their founder journeys. We believe this is another way we can support and grow the founder community, and if you or someone great you know is right for Beacon, submit your idea here or reach out to beacon@bloombergbeta.com.
Note to the reader: Bloomberg Beta is an early-stage venture firm investing in the future of work, with a focus on machine intelligence. This blog post is an extension of our open sourced operating manual, where we’ve detailed our areas of focus, the types of investments we make, and how we back and support founders.
