What Is It: Razorspeed Partners. Razorspeed is a new kind of venture fund that focuses on investing in "small and immature ideas",with locations in US and China only. The limited partner is Microsoft. Going forward, we may open up to allow other corporations to participate.
What Does It Do: Unlike any other venture fund out there, Razorspeed is different:
- Razorspeed focuses on "small ideas" and "immature ideas", though we will accept "immature and big ideas" too.
- Razorspeed focuses on bright teams that have high hopes, but may not have "experiences";
- Razorspeed's main deal flow comes from a semi-annual worldwide startup idea competition. Anyone is welcome to participate. The competition will be hosted by Razorspeed.com in partnership with Microsoft. We will select 10 teams from each competition and fund these 10 teams;
- If a team is selected to be funded by Razorspeed:
- The team will be invited to live at one of the two Razorspeed headquarters (Beijing and Boston) for three months, with all expenses covered;
- The team will be invited to an annual BBQ party at Microsoft Chairman Bill Bates' house;
- The team will be given an office space, with all facilities wired and ready to go. In Boston, the initial facility will likely be Tim Rowe's Cambridge Innovation Center that Razorspeed is still negotiating a contract with; In Beijing, the facility will be in Tsinghua R&D center;
- The team will be invited to weekly unconferences and bar camps (yes, parties!);
- The team will also receive a $50K cash infusion from Razorspeed;
- Best of all, the above Razorspeed investment and services are provided with no strings attached. Yes, no strings attached. In the end of three months, you can simply say "goodbye" and walk away. Actually, saying "goodbye" is not required either. You can simply take what you've done, and walk away. Razorspeed does not claim any ownership in anything you do in this three months period. Razorspeed does not require you to give up any ownership of your business during this three months.
- "No strings attached...?" So why is Razorspeed doing this? At the team's choice, Razorspeed can invest further to finance the team. In this phase, Razorspeed will operate more like a typical venture firm, but this is the team's choice. If the team chooses to leave, Razorspeed holds no hard feelings (but we still hope you say good-bye before you leave);
How Does This Relate to Microsoft?
Microsoft is the limited partner currently, In some sense, Razorspeed is operating as Microsoft's venture arm, but without any corporate affiliation. The initial fund size is $100M. At its own discretion, Razorspeed may raise more from other corporations.
However, Razorspeed does pay special attention to startup ideas that are related to Silverlight, Windows Live and Software-as-a-service.
Who Are the People at Razorspeed?
Razorspeed is managed by three managing partners, including myself. Given that this is an "un-announcement", I will only announce myself and leave my peers' fate in their own hands instead.
If you are reading this blog, you probably know who I am. I have been at the technology fore front for the last 10 years, started Ajax/RIA etc many years ago. I am not the top 1% coder, but can code well enough to make a living if needed. I have been CEO, CTO, Engineering and marketing, and have seen a lot of different types of executives. I started and helped started a few companies, each of which has raised over $10M financing and is doing really well. My current personal passion is next generation web performance (CDN is a little too old, don't you think? We can do better. Akamai is a $5B company, but there are so many things have yet to be explored), social computing and digital life. If you are into any of these three areas, drop me an email coachwei at alum.mit.edu. For exceptional ideas or ideas that are close to my belief of the next wave of the industry, Razorspeed can fund outside of the semi-annual competition.
How Did This Happen?
Over the years, I have interacted with lots of smart people, startups as well as venture firms. The evolution of the industry has put serious question on some of the existing thinkings and investment model.
Despite the web 2.0 hype and growth of firms of Y-Combinator, the corporate venture investment has not evolved at all. Corporations in general are having a hard time adjusting to the web 2.0 age.
When I brought up this idea to Microsoft executives a year ago during a discussion, apparently this is something they have been thinking about for a while. The industry's shifting landscape, ranging from the rise of Google, Facebook, to the rise of RIA and Software-as-a-service, is causing a lot of changes within Microsoft. However, it is time to make some changes to the investment model as well. The $150M investment into Facebook was a bold move. However, I believe Razorspeed is going to work out better for Microsoft over the long term.
What's Next?
I'm excited about doing this with Microsoft, and thrilled at the opportunity of going to Bill Gate's BBQ party this summer! The official announcements will come after we clear up a few regulatory matters. Within a year (by 4/1/2009), I'm sure that you will hear a lot of progress. Before the official announcement, the razor sharp ideas will remain razor sharp.
If you have any questions, you may email me at coachwei at alum.mit.edu.