A couple of months ago, OpenFund was founded by the Greek OpenCoffee organizers. What is OpenFund? As its name states, it is a fund willing to help newly formed startups to develop by giving them a seed capital as well as providing top quality advisors.
George Tziralis, one of OpenFund’s initiators, recently twitted that “Openfund’s main offering is not money”. In my eyes, this is wrong. Don’t get me misunderstood, I believe that their team of advisors is great and that it can help many ideas turn into kick-ass companies. But, their biggest advantage is the money they are offering.
Advisors will give you solutions in current problems. Advisors will make suggestions on how to develop your company. Advisors will probably introduce you to people who think out of the box, who are able to tell you a totally different opinion about your service. Advisors may even save you from some difficult situations, even bankruptcy. To make a long story short, advisors are very helpful only when there is a business model, a product and not just an idea.
And what is necessary for an idea to evolve into a product? Yeap, you guessed right, money. You need money to get someone to build even the simplest thing for you. You need money to pay your host. You need money to rent some office space. Even if you work all by yourself, you need money to buy some food. Maybe in the beginning all these sound “too much” but how far do you believe is that situation?
To sum up, in my opinion, money are much more important than advisors, especially when we are talking about seed fund. Because getting top level advisors is difficult but getting top level advisors without having any money is pretty pointless.
“Money makes the world go round” sang Liza Minelli back in the days. Although many years have passed since then, that song contains the biggest truth to be ever told: Money makes the world go round. I strongly believe that there is no such thing as free beer, especially when we are talking about business and web2.0 startups.
However, there are some people out there that can not understand that. Let me explain that. 2 days ago, a web-developer presented me a great project that was already built and ready to be launched. To be completely honest, I liked it and I also liked the proposed role in the team. There was even a venture stake after a trial period that was really appealing. The problem was in the trial period.
To explain myself, I totally agree with trial periods, they are like a test drive before buying a new car. You have to understand how your colleagues work and vice versa, to check your compatibility and if both sides are satisfied you can keep working together. There is always a but though. My “but” comes when I was asked to work for free in the trial period. I didn’t expect a great amount of money and frankly, I wouldn’t believe that I deserve much money for the 3-4-5 first months.
You will probably think: Hey, you are about to get a venture stake and you are talking about 3 months work? I agree, if we consider that I will keep working in that startup. What will happen if not? As the owner of the startup told me, I ‘ll get a big, fat NOTHING. What I also didn’t like, was the attitude that he had: It’s your big opportunity to do something great, if there is somebody to ask money after a failed trial period that is me and not you. Take into consideration that we are not talking about somebody who is starting right now and has no cash flow but about a fully functional company with income and expenses that is just not willing to pay me.
The combination of these three things drove me to reject the offer although the project rocks. I value my time and my will to do things much more than “you ‘ll work for free for 3 months”. And that’s far from snobism, I am willing to work for free in a project that there are no money (yet), in a friend’s project or in a project that I will have asked to work, but working for free for someone who found me and made an offer is not in my to-do list.