To a firm like Charles River Ventures, with an estimated $1.8 billion in assets under management, $250,000 sounds like pocket change. But the San Francisco-based firm believes its unique program of offering loans in that amount to start-ups will prove that something ventured is something gained. The New York Times reports that by becoming an angel investor of sorts, Charles River will be the destination of those start-ups once they take flight. “We think there are going to be a ton of companies that get started with a quarter-million to build consumer service on the Internet,” partner George Zachary told the Times. “We view this as a tool of access into deals rather than a money-making proposition.” Under the CRV QuickStart program, according to the Times, Charles River interviews prospective borrower and decides quickly whether to lend the unsecured loan at a 6% interest rate. As part of the deal, Charles River would gain the right to participate in the first round of financing, but at that point the borrowers would still own 100% of the company. While some applaud the plan, others are not so sure it has the start-ups best interests at heart. David Sze of Greylock Partners said in a Times interview that CRV QuickStart may rope entrepreneurs into a VC firm commitment before they’re ready.
Charles River To Get Funds Flowing
To a firm like Charles River Ventures, with an estimated $1.8 billion in assets under management, $250,000 sounds like pocket change.
November 9, 2006
To a firm like Charles River Ventures, with an estimated $1.8 billion in assets under management, $250,000 sounds like pocket change. But the San Francisco-based firm believes its unique program of offering loans in that amount to start-ups will prove that something ventured is something gained. The New York Times reports that by becoming an angel investor of sorts, Charles River will be the destination of those start-ups once they take flight. “We think there are going to be a ton of companies that get started with a quarter-million to build consumer service on the Internet,” partner George Zachary told the Times. “We view this as a tool of access into deals rather than a money-making proposition.” Under the CRV QuickStart program, according to the Times, Charles River interviews prospective borrower and decides quickly whether to lend the unsecured loan at a 6% interest rate. As part of the deal, Charles River would gain the right to participate in the first round of financing, but at that point the borrowers would still own 100% of the company. While some applaud the plan, others are not so sure it has the start-ups best interests at heart. David Sze of Greylock Partners said in a Times interview that CRV QuickStart may rope entrepreneurs into a VC firm commitment before they’re ready.
