

Everyone's A VC - brlewis
http://www.avc.com/a_vc/2010/09/everyones-a-vc.html

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devmonk
I'm not saying that it isn't exciting for sure, but Diaspora as the sole
namedrop product out of that?

Not that Diaspora isn't cool, but it is an unhosted, alpha-grade, open-source
project with no apparent business model competing with Facebook. It won't make
money.

Interested in Diaspora? Check out this recent review:

[http://mybroadband.co.za/news/internet/15283-Open-social-
net...](http://mybroadband.co.za/news/internet/15283-Open-social-networking-
Diaspora-tested.html)

I think it is great, and I'm sure it will do well as a free product, but
really- was that the only group worth mentioning? Even if they host the
product and trying to compete with Facebook, according to what I've read, you
have to overtake an established market using 3x of the funds your competitor
puts into it. 3x what Facebook burns? I'm not sure that the improvements it
makes in display of photos and security are enough to overwhelm FB. It isn't
going after much of a niche need unless you consider it being open-source a
niche.

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wccrawford
Overcoming someone that spends 3x as much as you isn't as hard as you might
think. Especially if they aren't spending that money wisely.

~~~
devmonk
Do you truly think that Diaspora has a significant chance where it is
positioned right now to overtake Facebook or gain a significant part of their
market share in even 3-7 years?

Think of all of the really major open-source projects. Now think to yourself,
if I was a VC, would I have put money into those developing those projects if
my goal was to have at least 10x return? Now think about those projects once
more. Was there any single product _significantly_ established in the same
market that those products had to overcome when they started, say with the
size and spending of Facebook, with a recent movie out about their founder?

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alain94040
There are serious regulatory issues in the US with issuing real equity to a
crowd. We worked around that problem by building a distributed model, inspired
by the Open Source GPL.

Just like there is no such thing as a "Linux Corp", but rather hundreds of
individuals exchanging code through a license, we built the same model with a
twist. In effect, our license says "if I contribute to your project _and you
make money_ , then you owe me some percentage back." That percentage is really
virtual equity.

So in effect, we have created a way for people to issue [virtual] stock, that
can at a later stage, be converted into equity from a real corporation, once
the project becomes successful enough that it requires real management.

It's at <http://fairsoftware.net> of course :-)

~~~
tptacek
Isn't this basically a recipe for ensuring you never get "real" funding? It
looks like it would drastically complicate the due diligence and paperwork
involved in setting up an "investable" C-corp.

~~~
alain94040
Not really. The license has a very specific clause that makes the conversion
seamless. Once you trigger it, you have a clean corporation, with shareholders
(the founders). That is very compatible with regular angel or VC investors.

~~~
tptacek
Has any VC with more than $100MM under management ever funded a company that
incorporated under your scheme?

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david927
OpenStarts is creating site that allows micro-equity investments ($50 and up)
for web-based startups, which is similar to crowdsourcing but where real
equity changes hands. (To get around regulatory issues, companies have to
register in the EU.)

The problem with investment management is handled via the site. It's a
match.com for all stakeholders in a startup: the founders, advisers,
investors, and they can designate an investment manager.

Innovation is naturally distributed. I think the tide is turning on the
support for that innovation, and it's finally also becoming distributed.

