The investments are small, ranging from $1,000-$3,000. While that won’t provide you with enough money to quit your day job, in the realm of low-cost ideas like platform apps, it should be enough to at least cover a few loose ends, like hosting or paying a designer to make your app look pretty.
The fund is being launched by Herman Blackbook, a New York-based consulting firm, so on top of the startup capital, participating companies can expect advice on strategy, marketing, and development as well. Other platforms that the fund is targeting include Boxee, AppNexus, and Trulia.
As for how much of a stake Herman Blackbook takes in your company for $1,000-$3,000, founder Darren Herman says it ranges, and some investments might take the form of convertible notes. For comparison’s sake, YCombinator makes investments of $5,000 + $5,000 per founder for what they say is on average a 6% stake.
The beauty of businesses running off existing platforms is that they typically aren’t very expensive to get off the ground, not to mention the benefits of a built-in userbase. Nonetheless, if a fund like Herman Blackbook makes you an offer, you’ll want to do the math and compare it to other comparable options to make sure you’re getting a reasonable deal.