$6000 in funding that comes with all these restrictions and gives away 9% of ownership is a terrible deal. It values your company at only $67,000.

If your company is only going to be worth $67,000 or less you should stop what you are doing right now and get a job working in services or retail.

On the other hand, if your company is worth much more than $67k, then this is not a good deal at all. VCs are not going to invest unless they think the company will be worth much more than $67k.

Second point.

If you need $6000 and somehow have not managed to save $6000 in the bank working as an engineer or designer then you should also reconsider whether you have the skills to create a successful tech company out of nothing.

Third point.

If you can't get a credit card with a greater than $6000 limit because of poor credit, please consider whether your financial skills are conducive to running a business.

Summary.

If $6000 is what you need to launch your company, borrow the money from mom, sell your car, or get a job for a couple months and save it.

First point: Then don't apply.

Second point - Read... Then read some more. Do a little research on what you get when you are accepted by an accelerator. We are not fortunate enough to have a benefactor like Yuri Milner who is blind betting on an entire system (yet), but then neither are the companies we will fund. We fall directly in line with what most other accelerators invest.

Third and most important point: It's not really about the money. I think if you asked folks who had successfully started, built and exited from an early stage company, if they would give up between 6%-9% to be able to "accelerate their personal and business development; get expert legal advice; learn how to build decent financial models; learn how to build and manage a team; get their software built; get to work closely with and get exposed to hundreds of investors... they would say "absolutely" at least they would if they were smart.

Plus, most accelerators bring in investors to help companies learn how to write a good investor pitch, build a strong case for their business and present themselves in a way that investors feel comfortable with. The they turn around and listen to the pitches from companies that they helped mold. The advantage of this model is too obvious to require elaboration.

Eel was right when speaking of the REAL benefits.

Unfortunately, we haven't done a very good job communicating who our "Captains" (mentors, advisors, investors and friends) are. There will be a more detailed list of mentors and investors on the site shortly, but I assure you that we have the chops and the connections to make the Project Skyway experience a a worthwhile endeavor for early stage tech companies.

So, forget about the $6k. It is there to get you through three months; to pay your cell bill; buy groceries and keep you from having to supplement your income to a degree that you can't focus on your company, your customers, your products and your personal development. It is there to help you become the full-time, balls-out, "Go Big or Go Home" entrepreneur that you will have to be in order to be successful.

Sure, I understand that you are claiming to provide all sorts of introductions to power players, politicians and the illuminati who your site implies are your close and personal friends. Presumably then like Facebook one can get laws passed requiring internet ID and position themselves to get a monopoly. Work the system and create a global police state rather than provide a solid product customers want and choose to use voluntarily because it is valuable to them. Not all creators want to go the route of leveraging politicians with bribes and back door deals to succeed. Some of us just want to make a solid product free from interference from so corrupted politicians working to squash entrepreneurs that don't cut them in for a share as if they are the mafia.

Who are you guys again? How many successful businesses have you founded? Which politicians exactly are you related to and what are examples of your past successes influencing them in subversion of democracy?

A lot of innuendo, very little specifics. It all sounds like a bunch of big talkers looking to grab a slide of ownership of a bunch of companies for peanuts when those companies don't need any such help to succeed.

My opinion would be different if the offers weren't so tiny.

$6000 is nothing. Typical software product should be selling $6000 worth in a day or at most a week or what is the point.

That said, since we don't know their ability to bring in good mentors and connections/investors, it might not be a good idea. So I kind of agree with you there.

The makeup of the founding team thing will be the make or break. I've barely seen a recent success story of a startup where less then 100% of the founders were technical. It used to be possible but I expect that times have changed in this regard.

Bluntly, this approach sounds wrong to me from an investment portfolio strategy point of view but I'm glad you are taking the risk and try it.

I definitely think that being in Minnesota will be a competitive advantage however. The area is vastly underrated and pretty incredible talents live and work there. Best of luck to your team and project.

I'm currently working for a Minneapolis startup (based in the skyway downtown coincidentally) that has raised 10M+ in VC funding in the health insurance area. None of the original 3 founders are technical.

You won't see us on techcrunch because health insurance isn't sexy, but we're having more of an impact on big businesses than 99% of what you will see on there.

That domain seems to be one of the most intractable around these days. It seems the gist of the situation is: There are four parties - doctors/staff/hospitals, patients, health insurance industry, and government/taxpayers. Effective reform is going to mean at least one of them gets [screwed|insert nicer word here]. There just isn't enough margin for all of them to make out comfortably.

Or is there some elegant solution hiding in the morass, waiting for some clever entrepreneurs to find and implement it?

Currently in America, if you're not on medicare/medicaid, the vast majority of people get their health insurance through their employer (this is called a Defined Benefit). Providing this benefit to employees is a huge burden on employers for something that has nothing to do with their core business model.

What my company is doing is moving this to a Defined Contribution, where an employer gives $X/year to each employee and the employees can use that money to purchase whatever kind of health insurance fits their situation best.

Employer benefits:

- known, controllable costs

- get out of health insurance negotiation/shopping for their employees

- better awareness of employees in how much employer is contributing

Employee benefits:

- more plan choice to fit needs (ex: mental health, substance abuse, pregnancy coverage as options)

- many times cheaper for healthy individuals (encourages more responsibility for employees staying healthy)

- more transparency into total compensation by employers

The same transformation happened in the 80's with pensions moving to 401k. The move from Defined Benefit to Defined Contribution is coming, and there's a huge market out there to make that transition happen.

Pension : 401k :: Defined Health Benefit : Defined Health Contribution

There's also a HUGE opportunity coming up with Health Reform where companies that didn't previously provide health insurance to their employees will now be mandated to (or pay a big penalty). Going with a Defined Contribution model is their easiest route to satisfying the mandate. Simply fork over a pile of money and you're done. No other screwing around with health insurance companies/brokers every year to do something new.

Groupon and Zyngas's founders aren't programmers. I'd say they're the two biggest hits of the last 5 years.

Also, as the other commenter pointed out, Mark Pincus's co-founder Justin Waldron is a programmer, but Zynga's probably a bad example anyway because Pincus was very much an accomplished entrepreneur with a lot of resources at hand prior to founding Zynga.

But I get the point you're making and it's still valid.

Additionally it's not a good idea to use critical successes like that to extract any kind of lessons from. Groupon won the business plan lottery and found a real need in the market that wasn't being served. Zynga rode the coattails of facebook.

Obviously i'm not dismissing those companies accomplishments. The founders are idols to me.

Ownership is a sacred thing -- we don't tinker with that at all. The dev team takes no equity. After all, you're running the company, not us. We just help with the resources and motivation. The dev team in India (which my cofounder Cem has worked with for years) are merely a perk we provide to our companies. It's one benefit of many.

If there's already a CTO in the company then great, he can focus on what's core and have the offshore team work on secondary stuff.

If it's a team of 3 business guys who have the right approach and the right knowledge then here's their chance to get the prototype figured out and raise that first bit of money to plow into a full time developer.

Make sense?

However every accelerator, except for dopey government-run ones, needs an ROI. The numbers we came up with were our attempt at a happy medium. "Price"-wise, we can be lower than others (TechWildcatters, Shotput Ventures, SproutBox, Momentum) but we also add value and perks that few others do. We also have massive pent up demand in our region.

Value prop is a tough starting point because it means different things to different people. And you know what? Maybe we'll find out our terms aren't right and we'll pivot. Just like almost every entrepreneur does on pricing.

But then again, until you can find another accelerator that is open to single founders, open to non-technical founders, provides a dev team in India to support, and that has a selection process that includes a educational mini-bootcamp...then it's a tough comparison.

No, our network isn't 1/3 as valuable as theirs (although we will have a few mentors from SV). But we've got plenty of tech entrepreneurs banging down our door so I think, for now, we're on the right path to helping them change the world.

The bigger point here is that for the first time ever guys who are non-coders but have domain expertise and the ability to take the product to market now have an option. Every other accelerator will slam their door in your face.

We're pretty pumped about this. Having a tech cofounder is massively helpful, but we don't feel the lack of one discounts your value to zero.

We just think it's something worth experimenting with. PG (and David Cohen et al.) are engineers. We think their bias towards developers is natural but until we see empirical data showing otherwise we think there's still potential for non-coders to successfully start and grow a product company.

There's no question there's pros and cons.

The only question is can we address the cons and accentuate the pros. (See Quora: What are the pros and cons of a non-technical founder for a start-up: http://qr.ae/clRm )

The good news is we'll find out fairly quickly!

"Each member must have a moderately full [LinkedIn] profile with a minimum of 2 recommendations and 50 connections."

Is this a thing now?

We definitely questioned ourselves as to why we might want to include something like this. In the end, we feel it is a proxy for one's dedication to develop one's network. Certainly it is not the only measure by which one could reasonably judge someone's ability to have become involved in a community and it may not even be the right one, but social networking is a valuable asset and is a tool upon which many of us rely as part of an overall strategy to forward our business' goals.

Plus, because we don't have a crystal ball into which we can peer to ascertain the kinds of networks and organizations our founders have chosen to become involved with, this gives us some information that we might otherwise not be able to get. In the end though, this is just one small piece of a bigger puzzle that we are trying to construct which will ultimately tell us a lot about the people that we will be working with and giving money to.

Project Skyway is about the people, more than just the idea, because people run companies; people succeed or fail; and people are the most valuable asset (or the greatest liability) in any early stage company. We are looking for kick-ass PEOPLE with kick-ass ideas because without one, the other doesn't matter.

LinkedIn represents all the bullshit I wish I could skip in the startup scene. LinkedIn is all the corporate politics and multi-tiered organizational madness I am trying to escape from by launching a startup.

So on the one hand, I feel like I am the prime demographic you should be trying to attract and recruit, but that LinkedIn requirement, combined with the "you don't need a tech guy" stance; it smells like a bullshit factory.

Things brings up a problem see with project skyway. You are left funding founders not dedicated enough to their startups to move and give their startups the best chance. I would have serious reservations about investing in such a founder.

Incumbators were great even two years ago but now they really aren't as necessary. Thanks to Angel List you don't have to pay an accelerator for access to the network. In the world of Angel List an accelerator is actually a decelerator. If you have an idea for a startup, get a prototype done and submit it to Angel List. If it's got merit, you'll get interest. If not, move onto something else. I view project skyway more as a founder school that you pay with equity rather than an accelerator. I wish it would market itself as such.

The Midwest can kick the coasts' ass any day of the week but not with the type of companies project skyway wants. It's with the type of companies it specifically doesn't want.

I wish project skyway the best (that's Minnesota nice for I don't think it will work).

To respond to your comments, we chose not to entertain any device companies like yours because we do not have the expertise, network or resources to benefit these types of companies at this point. Since this is our first class, we wanted to have a narrow focus. This might change however as we add individuals like you to our network. If you don't fell for the spell of the coasts, that is, and continue to enjoy what MN has to offer to our entrepreneurial community.

BTW, I can make an intro for you to the CEO of one of the largest health clubs in the country. They do a lot of biking related events. Might be a good partner to get the word out about your product. Let me know.

My company is specifically listed as an example of a company you're not interested in on your website FAQ and you just checked out our website? Additionally I say something challenging about Project Skyway and you ask me to join your network? Thanks but you're better served by guys like Rob Weber and Justin Kaufenberg. They made it. I'm just in the process of.

we chose not to entertain any device companies like yours because we do not have the expertise, network or resources to benefit these types of companies at this point.

This is the part I just don't get. MN has more expertise in MedDev (Medtronic, Guidant, Mayo, United Health Care, etc) and hardware (Compellent, Xiotech, Cray, IBM, etc) than anything else. I guess I would add advertising to that list (Fallon, Olsen, Brew).

If you don't fell for the spell of the coasts, that is, and continue to enjoy what MN has to offer to our entrepreneurial community.

I'm staying. See above for the reason.

In the end Cem you've made a bet with your own money. We'll see how it plays out.

Many people are working together to build Project Skyway. Although I approved our FAQ, I didn't make the connection when I saw your company name.

MN might have more expertise in MedDev or hardware or advertising. I don't. As you stated I am betting my own money. Naturally I put it where I know the most. I would invest in real estate in FL before I invest in a med company. And how much do you think I know about investing in real estate in FL?

You say "You are left funding founders not dedicated enough to their startups to move and give their startups the best chance." Interpreted another way: everyone not smart enough or driven enough to move to the Valley we'll be stuck with. Second raters.

But you're missing the point: Is this pool still good enough? In the pool of 5,000 rejected YC and TS applicants per year are there any winners? We think so. We think there are a lot. Chicago is a far cry from SV or NYC yet a full half of Accelerate Labs' last class* went on to raise an impressive angel round. 50% follow on funding is nothing to sneeze at no matter how you measure it. Most accelerator programs cross their fingers for that.

You say "Thanks to Angel List you don't have to pay an accelerator for access". You just made raising a round leveraging AL sound really easy. You've found success with it -- is it really that easy? But even so, how do you think companies that are a tad too early for that going to maximize their chances of getting to that point? A Pedal Brain c. 2009?

You bring up good points, and I think that they lead to the fact we appear to be "just another YC". Stay tuned. This is just our first class (what we call a cycle). In 2012 and beyond we'll be focusing much more on niche cycles. Ones that are absolutely perfect for this ecosystem. See this year merely as our test drive, but we know we're not perfect. Factor that in before you short us into the ground. =)

Thoughts welcome. *http://www.exceleratelabs.com/portfolio/

Ah more MN Nice.

You say "You are left funding founders not dedicated enough to their startups to move and give their startups the best chance." Interpreted another way: everyone not smart enough or driven enough to move to the Valley we'll be stuck with. Second raters.

No interpretation needed. I said dedicated enough. You stated they weren't smart enough or driven enough.

But you're missing the point: Is this pool still good enough? In the pool of 5,000 rejected YC and TS applicants per year are there any winners? We think so. We think there are a lot. Chicago is a far cry from SV or NYC yet a full half of Accelerate Labs' last class went on to raise an impressive angel round. 50% follow on funding is nothing to sneeze at no matter how you measure it. Most accelerator programs cross their fingers for that.*

Geography does not dictate success. If so, Phoenix would have more successful incubators than Boulder.

You say "Thanks to Angel List you don't have to pay an accelerator for access". You just made raising a round leveraging AL sound really easy. You've found success with it -- is it really that easy? But even so, how do you think companies that are a tad too early for that going to maximize their chances of getting to that point? A Pedal Brain c. 2009?

It is that easy. If you can't get to the point of a prototype, you shouldn't be funded. If you can't convince someone to work for equity/options to get you to a prototype, you shouldn't be funded.

You bring up good points, and I think that they lead to the fact we appear to be "just another YC". Stay tuned. This is just our first class (what we call a cycle). In 2012 and beyond we'll be focusing much more on niche cycles. Ones that are absolutely perfect for this ecosystem. See this year merely as our test drive, but we know we're not perfect. Factor that in before you short us into the ground. =)

Do the startups applying this year and giving you 6% of their founder shares understand it's just a test drive this year?

We're not going anywhere, nor will our support, nor will our mentors. We may change the focus of our classes (although we haven't decided yet) but nothing changes for our startups this August. They still receive massive value from us and will continue to long after they leave the nest.

The Midwest can kick the coasts' ass any day of the week but not with the type of companies project skyway wants. It's with the type of companies it specifically doesn't want.

By this you mean companies that actually charge for their product, right?

Bad Fit: Lifestyle companies. Consulting companies where the pricing model is tied to hourly labor. Anything with a hardware component (i.e. WakeMate or PedalBrain). Med device. Oil rigs in The Gulf.  You get the picture.

I'm not sure that I agree with you, for a number of reasons, but I cannot completely discount everything you say either. The idea that, because it is more difficult to build a software/web/mobile company in the Midwest; more difficult to get funded; and more difficult to become successful holds as much fiction as it does truth. And your assertion that, as you put it, we "are left funding founders not dedicated enough to their startups to move and give their startups the best chance." is kind of silly and naïve.

On a couple of different occasions I have heard you speak about the challenges you face in getting your company off the ground, and your product built. (most recently a couple of months ago at Bootstrapper’s Breakfast at Maria’s Cafe) and I understand your frustration. I was even there the night you originally pitched it, at MinneBar. And I don’t even disagree that the Twin Cities will probably never become a clone of Silicon Valley ($20... Inside Joke). But having lived there, I can honestly say, from the bottom of my heart... Thank God for that!

I know that this is a completely unfair, anecdotal example, but I have a company that I started last August, in the Twin Cities, got funded and is now on the precipice of becoming another wildly successful, Minnesota-based, early-stage tech company. It isn’t impossible, but it also probably isn’t as easy as it would be if I had a similar-sized network somewhere near the 101 corridor. However, that is kind of the point. It is absolutely ridiculous to think that I could simply jump on the BART from SFO, plant myself in the Tenderloin, haul my cookies down to 2750 Sand Hill Road and start begging for money from folks who have never heard of me. My network, the thing that is the real lifeblood of every successful accelerator, is here; my family is here, my home is here, and there are plenty of other reasons for me not to drop everything and go west, but they have nothing to do with a lack of commitment. In fact, I lived THERE for a while and chose to come back here to start my first company, to get away from some of the negative things that I felt weren’t conducive to my success. Since then, I have started, built and successfully exited from a couple of different companies, so I know it can be done.

There are SO MANY people here in the Midwest, for whom the Dream of Silicon Valley is so strong, that they think the streets of Palo Alto are littered with $50 million term sheets, where entrepreneurs get to keep 90% of the company they started 2 weeks ago. Most of the local "entrepreneurs" that have this terminal case of "SV Envy," have never even been there. (and usually have only talked about starting a company) The thing that we in the Midwest don’t seem to grasp is that good companies get funded and succeed, no matter where they are. There is not a higher rate of success, per-company-started, in SV, there are just many, many more started, so it is natural for folks to see the great number of successes as a sign that there are fewer failures. That is a fallacy.

After all, it would be ludicrous to think that a kid from Pittsburg, who had gone to Northwestern to study music, then dropped out of grad school to build a start-up in, of all god-awful places, Chicago, could make it work. It would be a certifiable miracle, if that company raised $165 million from VC’s in Silicon Valley (and Moscow), hired more than 1,000 people and turned down $6.5 BILLION from Google, because they figured they could make a lot more by waiting to do an IPO.

I guess the way I look at it, NOT having some of the "advantages" that you spoke of could be looked at another way. Perhaps the folks who stay in the Midwest, or (gasp) actually migrate TO the Midwest, see that this IS a different kind of place; though not necessarily better. But, it is the kind of place that, if you leverage your network; bust your ass; and ignore all the people who say it can’t (or shouldn’t) be done; spawns companies that will be around for a long time, create jobs, create wealth and create community pride. And, because we freely acknowledge that it IS definitely harder to raise money here than some other places, we need something like Project Skyway to help fund and mentor folks, so that we can build our own startup Mecca (or at least a place that isn’t repellent to early stage companies.) One thing we can definitely agree on though, the Twin Cities will never look or feel anything like SV.

As for the differences that have been pointed out between what we are doing with Project Skyway and what others are doing; we aren’t trying to be exactly like other accelerators, because we have a different set of issues facing us and we also bring different strengths. Cem Erdem is funding this with his own money and his vision and instincts, (along with mine) tell us we are heading in the right direction. Time will tell if we, like any early-stage company, have to pivot and try something different, but for now we are excited about what we have built so far.

In fact, we love YC, TechStars and all of the rest of the accelerators that have come before us, and we look forward to joining them in building an amazing nationwide, or even global, entrepreneurial ecosystem. No observer in one of our Project Skyway planning meetings (including me), has ever heard Cem, Casey or anyone else say anything but complimentary things about other accelerators, their founders, or their graduates. In fact, I think we can all agree that we likely wouldn’t be doing what we are doing, if it weren’t for them blazing a wide trail. There is something we can learn from all of them and we have done our best to do so.

However, we happen to believe that there is more than one way to support, inspire and help give life to early-stage companies and we are taking a slightly different course. In truth, there are far more ways that accelerators and the entrepreneurs who seek their support are similar, than there are differences. It is true that we do not REQUIRE a technical co-founder, but then there is no evidence that the single-most important component to building a successful tech company is having a founder who can sit down and code all night. In fact, there are plenty of reasonable arguments in support of both approaches and there are plenty of horror stories that provide ample anecdotal evidence for both as well. In the same vein, there is no rule that says that I cannot be just as successful as someone in another part of the country, so I choose to build my company here, where I have a strong foundation, a supportive network of other entrepreneurs and where there is plenty of money available to me to build a company that will change the world. And if, for some reason, I find that things are not as I believe them to be, I will take your advice and start hammering AngelList. But I didn’t see anything on their site about me having to be within 20 miles of an ocean.

We at Project Skyway are confident in our approach and in our ability to provide many of the critical elements that lead to building successful, sustainable, companies and, for the most part, those elements are derivative of the direction that the accelerators that have come before us have provided.

In the end, there is no magic bullet; no perfect solution; no supernatural zip code and no single formula that will make every early-stage company an unmitigated success. Regardless of how far we’ve come in the past 12 years to further our understanding of what specific kinds of resources evolve to create the best ROI for founders, investors, employees and communities, building early-stage tech companies is still akin to being a 19th century settler getting ready to cross the Mississippi River and head West; Great Potential - Poor Maps; But it is still worth the effort!

I have started, built and successfully exited from a couple of different companies, so I know it can be done.

Given this, how many angel investments in MN web/mobile/social/etc startups have you made?

It seems like you are getting more worked up about this than is warranted. Nobody is trying to pick a fight with you. In fact, we all admire what you are doing with PedalBrain and we all wish you nothing but complete success. We feel like every startup in Minnesota that "makes it" puts us one step closer to our goal.

Now, to answer your question: I am not an investor right now. I hope to be able to do that someday, but I don't feel that I am financially savvy enough to hold my own in a highly technical conversation about the minutiae of financial terms within a complicated deal structure. I am a sales and marketing guy with a talent for picking winners, but that doesn't necessarily mean that I am a pure numbers guy, so VC's and angels who have been doing this for a long time would eat my lunch.

With that said, I have done viability analysis on hundreds of ideas, inventions and discoveries, on behalf of dozens of local investors, as well as having been a contract strategy consultant for the U of MN's Office for technology Commercialization; helping them figure out the commercial prospects for IP coming out of university-born-research. Also, I currently am privileged to have some of the most prominent, business-savvy investors in town support my company. So I continue to learn and hope to be able to jump into the angel investment side of things at a point when I don't feel like I am going to get chewed up in the process.

I am part of team who built the Project Skyway selection process, I see every application that comes in and I will play a role in deciding who gets funded. So, I can play a role in helping worth early-stage tech companies get seed-funding in that way as well.

Casey and I have also leveraged our personal networks, to ensure the participation of some rock-star investors, from both coasts as well as the Midwest so that, should our companies agree with you, that they would be better off somewhere else, they will at least have been exposed to investors from other parts of the country.

If you haven't made enough on your exits to angel invest, then you built lifestyle companies which I understand Project Skyway doesn't want. Additionally, you're providing advice to entrepreneurs on how to create something which you haven't done yourself. That would give me pause if I was applying. Maybe your just providing your network to entrepreneurs for a fee (the equity stake Project Skyway takes). In that case, your price is much too large compared to Angel List and your value is significantly less.

I do agree with other posters that the tech energy just isn't the same in the Midwest. When I went and visited SF for a YC interview, I felt something different and I really enjoyed it.