Bridge Boys, Village Capital Fund Startups with ‘Peer Review’ Model
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Best friends since childhood, Jordan Fliegel and Jeremy Levine started their venture-backed tech companies, CoachUp Inc. and StarStreet Inc., in 2011 and 2009, respectively, back in their hometown of Boston.
CoachUp is an online marketplace where aspiring athletes or their families can connect with and hire professional trainers and coaches for them. StarStreet is a gaming company that lets people play daily fantasy sports for real money.
Growing their businesses via prominent incubators and accelerators TechStars and MassChallenge, each developed a strong network of talented local entrepreneurs, technologists and investors in Boston. Without any exits under their belts, however, the founders “didn’t exactly have cash to burn” on angel investments in peers and companies they deemed rising stars, Mr. Fliegel said.
So in late 2012, the duo raised $300,000 from limited partners, including high-net-worth individuals around the Boston tech scene and some finance professionals, to start angel investing as Bridge Boys LLC.
The name is a reference to the place they grew up (Cambridge, Mass.) and the “bridge” or smaller seed deals they wanted to do. As for the “boys” part of the name, Mr. Fliegel said he thinks of it as friendly, rather than gender-biased. Mr. Levine added that Bridge Boys has invested in three companies founded by women, out of 19 total.
The childhood friends believe that “peer-founders” get to see things in the startups around them that angel and venture investors do not, as founders swap horror stories, good advice, connections and generally work to help each other out with a sense of camaraderie.
The small seed fund’s investment thesis is basic: Founders they back must “have a real passion for what they’re doing, enough that they are not willing to let their companies fail,” Mr. Levine said.
The fund typically invests $10,000 per deal, but would invest up to $25,000 per deal, Mr. Fliegel said. Bridge Boys’ portfolio includes Fashion Project Inc., Freight Farms Inc., Wymsee Inc., Dashbell (BookingMarkets Inc.), Crowdly Inc., ZappRx, Blank Label Group Inc., Wefunder Inc., Pistol Lake Inc., Narvii, CommandIQ, TripReactor, Crave Labs, Tracksmith and Revv Co. (a.k.a. Change Collective).
The partners explained they were able to attract LPs by allowing them to invest, as angels, in CoachUp and StarStreet.
Six companies in the Bridge Boys portfolio also came through TechStars. And 16 of their portfolio companies attained follow-on funding from CoachUp and StarStreet investors later, thanks in part to Bridge Boys referrals, the partners said.
At least one other fund believes that peer-founders make great startup investors. Village Capital, a non-profit that supports social ventures–companies that do good while making a profit–runs an affiliated fund that uses a “peer review and selection” process.
In Village Capital’s model, an invited “cohort” of entrepreneurs in search of funding meet and review each others’ businesses over a period of several weeks. At the end of the program, they vote on the most backable ventures, and Village Capital invests from pre-committed funds.
The executive director at Village Capital, Ross Baird, said, “A peer selection model that has entrepreneurs (not investors) allocate capital from [a] fund…” can “free entrepreneurs” from having to build businesses that will appeal to investors, but may not “solve problems.”
CoachUp is an online marketplace where aspiring athletes or their families can connect with and hire professional trainers and coaches for them. StarStreet is a gaming company that lets people play daily fantasy sports for real money.
Growing their businesses via prominent incubators and accelerators TechStars and MassChallenge, each developed a strong network of talented local entrepreneurs, technologists and investors in Boston. Without any exits under their belts, however, the founders “didn’t exactly have cash to burn” on angel investments in peers and companies they deemed rising stars, Mr. Fliegel said.
So in late 2012, the duo raised $300,000 from limited partners, including high-net-worth individuals around the Boston tech scene and some finance professionals, to start angel investing as Bridge Boys LLC.
The name is a reference to the place they grew up (Cambridge, Mass.) and the “bridge” or smaller seed deals they wanted to do. As for the “boys” part of the name, Mr. Fliegel said he thinks of it as friendly, rather than gender-biased. Mr. Levine added that Bridge Boys has invested in three companies founded by women, out of 19 total.
The childhood friends believe that “peer-founders” get to see things in the startups around them that angel and venture investors do not, as founders swap horror stories, good advice, connections and generally work to help each other out with a sense of camaraderie.
The small seed fund’s investment thesis is basic: Founders they back must “have a real passion for what they’re doing, enough that they are not willing to let their companies fail,” Mr. Levine said.
The fund typically invests $10,000 per deal, but would invest up to $25,000 per deal, Mr. Fliegel said. Bridge Boys’ portfolio includes Fashion Project Inc., Freight Farms Inc., Wymsee Inc., Dashbell (BookingMarkets Inc.), Crowdly Inc., ZappRx, Blank Label Group Inc., Wefunder Inc., Pistol Lake Inc., Narvii, CommandIQ, TripReactor, Crave Labs, Tracksmith and Revv Co. (a.k.a. Change Collective).
The partners explained they were able to attract LPs by allowing them to invest, as angels, in CoachUp and StarStreet.
Six companies in the Bridge Boys portfolio also came through TechStars. And 16 of their portfolio companies attained follow-on funding from CoachUp and StarStreet investors later, thanks in part to Bridge Boys referrals, the partners said.
At least one other fund believes that peer-founders make great startup investors. Village Capital, a non-profit that supports social ventures–companies that do good while making a profit–runs an affiliated fund that uses a “peer review and selection” process.
In Village Capital’s model, an invited “cohort” of entrepreneurs in search of funding meet and review each others’ businesses over a period of several weeks. At the end of the program, they vote on the most backable ventures, and Village Capital invests from pre-committed funds.
The executive director at Village Capital, Ross Baird, said, “A peer selection model that has entrepreneurs (not investors) allocate capital from [a] fund…” can “free entrepreneurs” from having to build businesses that will appeal to investors, but may not “solve problems.”
Mr. Baird believes peer-review investing “leads to…success and capital for entrepreneurs who are potentially overlooked.” Women are 80% more likely to get funded through the peer-selection model, he claims, comparing Village Capital’s results to those of traditional venture and seed funds.
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