Today on TechCrunch I read about another way of getting some initial seed financing — a startup called TechStars.

TechStars is running a contest right now and accepting online applications. They’re looking for people who have an idea but zero money. 30 of the winning entrepreneurs will be sent to Boulder, Colorado for the summer to work on their ideas. Each of them will get $15,000 for 5% of their business.

It sounds like a small deal – $15,000 – but the model is proving to work with Y Combinator doing something similar. They were initial investors in reddit which was recently sold to Conde Nast.

The model is an interesting one, and it just might be what a young startup company needs. You’ve got a killer idea but no money and very little if any experience. TechStartups (and Y Combinator) are backed by veteran guys who will provide a bit of money but also provide a lot of leadership and talent to see which startups make it.

For the money guys it’s a no-brainer. TechStartups will put in $450,000 into 30 ideas. If even one of those ideas hits the market and gets sold (like reddit) they’ll be getting a huge return on their investment.

Post from: EveryJoe

TechStars – Another Way to Get Financing