DreamZHunt is a new concept in funding technology startups that has been initiated by a Chennai based business group called SGS. You can think of it as an ‘idea-hunt’ contest, (focused on the IT industry) for those who are looking for their first-business breakthrough. At the end of the content, SGS will pick up three good ideas (along with their teams) and invest around $20k to $100k per business in exchange for (minimum) 15% stock, besides helping them out with mentoring and other legal stuff. This contest is meant for those people, who are looking for financial help and mentorship in kickstarting their tech business.
One can think of DreamZHunt as a company sponsored funding exercise (as opposed to VC funding). This is NOT an event for somebody who already runs a business, or is looking for VC-backed funding. Instead, it is meant for those who have the idea & the “dream”, but just don’t have money or expertise and are looking for that breakthrough. SGS is open to having different levels of involvement with the startups – either an incubation center, a company sponsored funding or something as regular as VC funding. More details here.
Why is SGS doing this? Firstly, its an investment decision for them. Secondly, they want to do their bit in promoting innovation and entrepreneurship in the Indian IT industry. For the contest, you can send entries until March 31, when the ideas will be screened and evaluated by a panel of judges. Ten finalists would be invited to Chennai (all-paid expenses) in the last week of April for a one-day interaction session, where each team will have to present their case before the panel. And three of the entries will be finally selected.
Frankly, this is the first time I am being exposed to such a concept. I am also not sure if this model is unique, or there are precedents to this. I don’t know the people at SGS personally, other than the fact that they wrote to me asking for my feedback about the event. But I see no downsides to people exploring this option. Getting venture funding is not easy, so if you can secure finances for your business idea in a way that has lower entry barriers than VC funding, maybe its worth a try. Off course there are lots of tricky issues that will be involved in this model as well. I’ll be interested to see what kind of response (and outcome) this event gets.
{ 12 comments… read them below or add one }
Well..I have not heard before about dreamzhut or SGS. And frankly I would not like to share my idea, for the stock they MIGHT purchase without knowing any thing about them.
Let’s see how this works..
We definitely understand the complexities involved. SGS Group is based in Chennai and you can very well check its credibility by whatever means you want. Some of the group websites are http://www.sgsindia.com http://www.sgstechnologie.com http://www.netandhost.com
Also, dreamzhunt is just a medium to connect with prospective entrepreneurs. We do NOT really expect submissions to carry all the trade secrets involved. All that we ask is a gist of what it is. If we like the brief idea you submitted, we are open to discussion on table when we can know about each other and go ahead with the appropriate agreements. It’s all step-by-step.
Our goal via dreamzhunt is to make the right people just say – “Hey I’m interested”.
Once we get into some sort of discussions, I bet you know when to reveal what about your idea
The phrasing is confusing. I read their blog and they seem to be saying that the entrepreneur will get a minimum of 15% stock (in the form of options !!).
Hey Nilesh,
Yep I agree. Amit quotes “and invest around $20k to $100k per business in exchange for (minimum) 15% stock”
It must typically be “and invest around $20k to $100k per business in exchange for 10% to 85% stock depending on the value of entrepreneur”. This might include his need for an external CEO, support etc etc.
As Amit says, “SGS is open to having different levels of involvement with the startups – either an incubation center, a company sponsored funding or something as regular as VC funding”
I guess this clarifies. Does it?
Thumbs up to SGS guys for starting the great initiative.
To me, it seems like similar concept as YCombinator & TechStars.
http://ycombinator.com/
http://www.techstars.org/
seems similar to the Y Combinator concept, which has clearly been very successful. 15% stake for a 20-100k investment in a couple of people that just have an idea seems very reasonable.
Cool Site , Keep up the good work.
Thanks!
Idea is not unique, Y Comninator, IDeaLabs and even some VC funds do that nowdays. But its good to have the concpet in India.
My $0.02, they are only committing to a minimum of 15% equity to remain with the guy/s whose ideas they decide to fund, so in a way they retain potentially upto 85% for the money they invest. If you have a great idea, passionate about it and can bootstrap, my take would be to stay away. You can always take on funding later when you have a POC at a much higher valuation and probably retain more equity for yourself.
@ i2iFactory
I agree. Again to re-iterate, its a “minimum” of 15%. SGS Group is open for higher levels like even upto 90%. Hope this clarifies.
Jaishree (or Dreamzhunt)
The proof of the pudding is in eating it!!! Lets see after the contest how much equity you leave for the contestants!
Nunihuia! and-here
Today should unit’s (BU’s) start nerve center for automotive bingo created start number of those on is- business the security.
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