Start Up Lottery
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- fruitsalad
There are so many start-ups and entrepreneurs looking for investment to get their ideas moving, so I was thinking, instead of crowd funding, how about a start-up lottery.
Each entrepreneur creates a mini kickstarter like page, pays a dollar for ticket, can buy as many as they like. Each week a lottery number is randomly drawn, the winning entrepreneur getting the pot of cash to use for their business.
The organiser of said lottery could generate revenue through advertising on the website and by being granted a small cut of equity from each lottery winner, say 1% - they also reserve the right to withdraw the cash from the winner if they turn out to be a faker.
Said organiser of lottery could possibly end up owning 1% each of the next twitters, Facebooks, snapchats etc - which wouldn't be a bad thing at all.
What do you think? A good idea? See any pitfalls in the idea?
(yes I know, sharing the idea here is pitfall, but I bet plenty of other people have had this idea, it's all about making the idea a reality)
- Beeswax1
Thanks for the idea.
Me and my development team in India have started building the app and the site for it. We'll invite you to our launch party.Jokes aside I think it's a great idea.
To eliminate fake startups you can accept startups from a gazillion approved Accelarators and other sites like Angellist, crunchbase etc. (I know they don't check their own submissions but you can eliminate by looking at their company profile from there.)The problem is 1 dollar ticket paid by the startups might not make enough money.
You should find a way to involve non-startup people into buying tickets too.
- SteveJobs0
Good ideas aren't always enough. The time and effort (and maybe money (advertising budget?)) required to put a project like this together, investigate all legal concerns, create a user vetting system, and most of all generate enough interest to build a base of users willing to participate to make it worth everyone's time, just to name a few things, are not trivial in the slightest.
A friend of mine and I have been brainstorming business ideas back and forth for years but we find that we spend most of our time shooting holes in each others plans before moving on to the next idea.
- i have an idea for the vetting system: register a million fake accounts and make them vote #milldollarsupsted
- vero_vandal0
Not a bad concept
- sted0
#startupimp ®℗©™
- Hayoth0
How is the funding pot built up? From advertising? Sounds like dieselsellerz concept.
- BuddhaHat0
I love the idea of flipping kickstarters on their head. The main issue I see with it is achieving the critical mass required for the lottery to deliver sufficient returns to make the effort worthwhile for what would presumably need to be a large number of start-ups and entrepreneurs. If you only get 100 start-ups to buy 100 x $1 lottery tickets each, then you've got a pool of $10,000. A 100 to 1 chance of only getting $10,000 in seed money might not be a sufficient incentive. I'd like to know what others think?
Also, these are the same people who, in the traditional model, are seeking funding/seed money from others to drive the development of their concepts at the fledgling stages. Asking them to push money out of their business as opposed to pulling it in at this point in the game might seem counter-intuitive to some start-ups.
- zaq1
you are not that far off. Being a part of start up scene for almost 2 decades I can tell that a lot of it just pure luck.
- Maaku1
How about a modified "raffle" instead, where the main prize is cash (let say 100k). It's only for startups.
As an early stage startup you buy your ticket for $100-$500, this ticket has 2 functions. If you have the winning ticket, you get the 100K, but if not, you get equity from the winning startup, based on the amount you spend on tickets. So you win even if you loose.- And basically startups fund themselves, lol.Maaku
- yes.fruitsalad
- microkorg0
If you are holding a raffle where the tickets are sold before an 'event' (draw) then you require a commercial lottery licence.
(good luck getting one of those)There is a very clever way around this law though that does not involve a licence.
I'll sell you the solution for a mere $5k - around the same price a lawyer would charge for researching and telling you the same information ;)
- you put in small print in the T&C's it's free to enter.fruitsalad
- Nope... and if it's free how are you going to make money?microkorg