AKA: Founding Startup
Getting funding to build a startup / company from the OSS using venture capital. Often a very good business case is required but can result in a stable income for the next years (even if the startup is not successful).
Requires:
- Willingness to create a business / company (by all involved maintainers and maybe contributors)
- Setup of a business plan/idea
- Fund-raising
Variants & Options:
- Bootstrapped: Building a Startup without VC money - requires a already working business model
- VC Funding: Getting money to build the company makes buildup easier - but founders will loose full control
- Thousands of VCs and Accelerators exist to pitch a Startup idea. Examples with OSS focus:
- OSS Capital
- AirTree (Focus on Australia/New Zealand)
- Open Capital (Focus on Europe)
- RunaCap ()
- Awesome OSS Investors list
- ... list of OSS Investors
Characteristics | Value | Note |
---|---|---|
Effort to set-up | Months | Basically, setup of a full business and fundraising |
Effort to maintain | Medium | In the beginning fundraising every 18 months; Later hopefully break-even, IPO, etc. |
Cost to set-up | Low | Might require small investment in domain name, trademark, etc. |
Cost to maintain | None | After seed-round the invested money can be used from the startup |
One-time Income | Low | Accelerators or incubators might only contribute little on-time |
Recurring Income | Medium | Probably a below-average salary but high potential when an exit occurs |
Income Predictability | Medium | Stable for a runway of ~18 month; New fundraising necessary |
Full income Threshold | 10+ | Probably several investors or angels necessary |
Recipient | C | The Startup will get the investment but founders (probably maintainers) get a salary |
Additional Work | High | Will require to build a pitch deck, business plan, website, etc. |
Visibility | High | VCs get approached; Press will report |
Necessity to pay | Low | High competition but easier with good business model |
Entry Threshold | High | Clarification of copyrights; Due dilligence on Team, Tech, etc. |
Countervalue | Shares | |
Scalability | Medium | Scales with the number of interested investors |
Effort for marketing | Medium | Finding VCs & pitching is work but VCs are interested in investing |
Competitors | None | If another group of maintainers would want to start a competing startup no VC would invest |
Software types | Special | Often stand-alone software with (potentially) many users (e.g., tools, databases, OS, LMS, etc.) |