NEWS & EVENTS
Charles River Ventures Launches CRV QuickStart Seed Funding Program
Charles River Ventures Launches CRV QuickStart Seed Funding Program
Program to Offer Loans Designed to Help Select Entrepreneurs Launch New Ideas Quickly
Waltham, MA & Menlo Park, CA - November 1, 2006 - Charles River Ventures (CRV), one of the nation’s leading early-stage venture capital firms, today launched CRV QuickStart, its seed funding program designed to help entrepreneurs prototype and launch new ideas quickly. CRV QuickStart provides loans to enable entrepreneurs to finance the work necessary to build out their ideas to better explore market potential in preparation for raising a first formal Series A equity round. Structured as a loan, CRV QuickStart financing protects the entrepreneur by eliminating equity dilution in the critical seed phase.
“Getting a big idea off the ground takes a lot more than innovative thinking. It takes time, resources and capital,” said George Zachary, general partner, CRV. “All too often, raising seed capital consumes precious time that can be better spent applied to the actual implementation of an idea. In addition, when entrepreneurs do find capital, it often comes at a high price in the form of painful dilution that translates into the entrepreneurs getting less than their fair share. CRV QuickStart will accelerate and simplify the process for launching new ideas to allow early evaluation of their potential. As a result, entrepreneurs gain a time-to-market advantage that will help true innovators rise to the top quickly.”
By offering up to $250,000 in the form on a loan (also known as a “convertible note”), CRV is providing entrepreneurs with the capital needed to fuel their ideas with no equity dilution. Because the seed funding does not involve equity, no public filing is required. As a result, entrepreneurs can stay in stealth mode during their seed phase, which is often important in maintaining competitive advantage. To eliminate personal liability for the entrepreneurs, CRV makes the loan to a corporation formed around the entrepreneur. If a corporate entity does not already exist, CRV will help the entrepreneur to establish one. CRV will then work with the company in an observer capacity on its board and help put together a first formal round of equity financing when appropriate. The ultimate intention for CRV QuickStart loans is to convert CRV’s debt into equity should the company move forward with a Series A round.
"The formalization of this program is a natural evolution for us at Charles River Ventures,” said Bill Tai, general partner, Charles River Ventures. “Over the past year, roughly one-third of the projects we have committed to have been seed projects. It’s a sign of a fundamental change in the nature of company formation today, particularly in the Internet segment.”
As part of CRV QuickStart, CRV ensures that all parties who helped build the company are appropriately rewarded for their contribution at the time of Series A financing. If appropriate, up to one percent of the company’s common stock at the Series A equity financing will be set aside to reward key non-employee stakeholders, such as an institution selected by the company that supports its vision (e.g., a university, non-profit organization, industry group or other foundation), the company’s principal third-party advisor (e.g., a professor, a fellow entrepreneur, or a mentor); and the person or entity who introduced the project to CRV.
For additional details on the CRV QuickStart program or to submit an idea, visit www.crv.com/AboutCRV/QuickStart.html.
About Charles River Ventures Founded in 1970, Charles River Ventures (CRV) is one of the nation’s oldest and most successful early-stage venture capital firms with approximately $1.8 billion under management. CRV is dedicated to helping exceptional entrepreneurs turn their ideas into the next category leaders in high growth technology and media sectors. Over the past 10 years, CRV funds have been ranked among the industry’s top performers. CRV has offices in Boston, MA and Menlo Park, CA. For more information visit www.crv.com.
