College Founders Guide to Raising Early Stage Funding: Advice from a Student VC — Volume 4
You don’t go to Harvard
You have no money, let alone can barely afford ramen
You don’t know Peter Thiel. The only Peter you sort of know is Peter Griffin
As the story goes, back in the early 2000s when Facebook started to expand into other colleges, founders Mark Zuckerberg and Eduardo Saverin and “President” Sean Parker were eager to begin turning this small, website startup financed with credit cards into a true venture business.
In 2004, the team was introduced to PayPal mafiaso and veteran technology investor Peter Thiel through a referral from LinkedIn Founder Reid Hoffman. Fascinated by the product, Peter invested $500,000 into the budding social network in exchange for a 10.2% equity stake in the company.
A little over a decade later, $500,000 check turned into over $9,000,000,000.
Early on, lot of things went very right for The Zucc. Frankly, he was just at the right place at the right time. He was at Harvard, with super smart and wealthy friends who could bankroll “The Facebook” for the time being. They met Sean Parker who opened Mark’s world to the universe of Silicon Valley right when company was pushing into West Coast colleges. Not to mention, this was post 2000 when the internet had some foundation and validation thanks to companies like Netscape and Yahoo!.
At GLV, we firmly believe Babson, Olin, and Wellesley College (BOW) founders are truly some of the most talented entrepreneurs out there. Heck, we think they are even sharper than The Zucc and the founding Facebook team. But despite this talent, access to early stage capital and resources is a different story.
As a young entrepreneur, how should you go about securing extremely early financing? Here are 4 concrete ways to find funding for your burgeoning venture.
Grants & Pitch Competitions: Today, so many organizations want to foster and build entrepreneurship, especially among the younger generation. They’re willing to put money behind it as well, often being in the thousands of dollars. As a budding founder, it is in your best interest to do research into pitch competitions and grants in your area of interest and start applying. Oftentimes, they are judging you based on your idea and thoughtfulness behind it, not progress. At Babson, a well known pitch competition is the College’s flagship Rocket Pitch. As mentioned in our previous article, Babson alumni and Cleancult (backed by top VCs like BoxGroup and institutions like the George Kaiser Family Foundation) founders Zach Bedrosian and Ryan Lupberger won $20,000 in Babson’s B.E.T.A. Challenge. If you’re not at BOW, Foundergrants.com is a great resource to find free grants to finance your startup.
College-specific programs: Similar to pitch competitions, oftentimes the college you attend (if you attend one) will have programs to support student entrepreneurs. Babson has pitch competitions, but they also have a great initiative called the Seed Fund, where they reimburse entrepreneurs for expenses related to getting the business off the ground. Another program is Babson’ Summer Venture Program. In this 10-week intensive boot camp, about 15 BOW founders receive free housing, 24/7 workspace in downtown Boston, dedicated advisors, expert speakers/mentors, and world-class programming that leverage the resources of the Blank Center. As teams work to build their businesses, they make invaluable connections with potential customers, partners, investors, and industry influencers. At the end of the program, the teams present at the Summer Venture Showcase to an audience of over 400 members of BOW and local startup communities. In all, be sure to check out what This is great, because it allows early expenses to be covered, but it also forces the student to think through exactly what would be most beneficial (up to a certain monetary amount, of course).
MVP + Bootstrap: As the saying goes, given the abundance of low-code or no-code tools, it’s 10x easier today to start a company than at any point in history. Think about it, how easy is it to set up a landing page on Squarespace or even design a basic minimal viable product (MPV) on Webflow? In some cases, you can even use that MVP to create some early revenue. Babson-bred, text message edtech firm Arist (who just raised over $1M in venture funding and I am a big fan of), funded some of their earliest needs by creating and selling a few text message courses for a small fee. You can also use that MVP to get customer validation, through a waitlist for example, and then use that to raise a bit of money to kickstart your progress.
Angels: Angels aren’t real, right? Think again. Angels are super early stage investors, often current or former founders, who provide small checks for startups usually between for low six figures to maximum $1,000,000. Angels are usually the first money a startup raises even when it is just an idea on a powerpoint. However, their value isn’t just financial — they can provide their professional network, advice, and help give founders the confidence they need to kick off their venture. A famous example is Mike Markkula who in 1977 wrote Apple’s first investment for $250,000 in exchange for a third of, at the time, a dingy computer company. According to Forbes, he is now worth $1.2B.
If you are able to convince a few angels to invest in your idea, this could be a great way to raise enough money to fund early milestones. Angel investors are everywhere — college alumni, family friends, judges at pitch competitions — it is up to you to put yourself out there and find those that are willing to take a bet on you.
Student Venture Groups + GLV: Grants and pitch competition are great, but usually just offer only money. Angel investors are great too, but often times you’re the 50th investment the angel has made and can get lost in his investment priorities. Not to mention, angels don’t usually focus entirelly on students and can question your lack of experience. We at Green Line Ventures are here to fill that void.
Backed by 500 Startups, we are a dedicated fund backing current BOW undergraduate and MBA students and recent alumni entrepreneurs. We we write checks between $10,000 and $25,000 and offer hands-on support to help our founders turn their venture from an idea into a thriving business. We back founders across all markets from enterprise software to health care, all the way to media and retail. If you’re a BOW founder and are looking to get strong funding and dedicated support for your venture, we would love to connect with you.
As you embark on your startup journey, it’s important to understand where early capital might come from. It’s easy to view just money for what it is , money. But, be sure to consider who’s writing the check. Hopefully, this article provided you with a few ideas to get started.
As always, if you’re working on an idea, drop us a line at team@greenline.vc and visit our website www.greenline.vc. Thanks!
Sumukh Setty, Founding Partner of Green Line Ventures.
