Campus Venture Solutions: Web Development for Startups & Entrepreneurs

Previously, we discussed two different types of incubators; the "seed funding" model of Y Combinator, and the "business growth accelerator" of Obsidian Launch. There is now a 3rd model brought to you by Campus Venture Solutions, a joint partnership between Novedea and StudentBusinesses.com. CVS supplies reduced priced web and software development services in exchange for small piece of equity. The goal is to help student entrepreneurs realize and follow their dreams. The price is usually at cost, which they guarantee will be far cheaper than most other firms.

The percentage of equity that is given up will be examined on a case by case basis and will vary depending on the potential that Campus Venture Solutions sees in the project. Just like incubators, they will carry a degree of selectivity since returns aren't guaranteed. It is just like any other investment, except they are investing their time to supply the right resources.

Ram Dhan, (co-founder of Novedea and CVS) is studying at Harvard Extension School,  observed that there are many students with ideas and who want to start their own companies. He explained that many times startups know what they want but don't know how to execute their ideas. CVS will aim to fill that gap and provide a new alternative for building a startup. The nature of StudentBusinesses.com works hand in hand with Novedea because SB has a database of students who are looking to start their own company. It seems to be a good way to leverage each other businesses while opening new opportunities for growth.

I'm not too keen on the model because it only gives the development firm "theoretical" incentive. Yes, there is the equity, but founders are usually unlikely to give up any significant amount. The cost would have to very cheap, but even then, you always get what you pay for and adds another layer of concern for the quality service. An idea or concept would have to have huge potential for any development firm to become excited and as enthusiastic as the founders of the startup (which is important with these types of agreements). If this were the case, you would think that they would want to partner and offer the services for free in exchange for higher equity and a bit more say in the project. Without undieing faith, there will always be commitment issues, especially during difficult times that are inevitable. Startups with truly remarkable ideas and plans should be able to recruit developers for free anyway.

There is always a question of whether founders will be willing to reduce their risk by decreasing costs up front and give up a portion of equity or pay the usual premium for web/software development. This will depend heavily on the founders' beliefs and confidence in their ideas and ability to launch.

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