A decade ago, entrepreneurs saw seed funds as a means to an end. There was little effort to brand the separate groups, there were few celebrity angels and the entire VC community seemed shrouded in mystery. Enter the seed incubator model.

Between Paul Graham of YCombinator, David Cohen of TechStars, Naval Ravikant of Venture Hacks and Josh Baer of Capital Factory, yesterday afternoon's Seed Combinator SXSW panel showcased some of the pioneers of the seed fund model.

When moderator Marc Nathan asked audience members to raise their hands if they'd applied to one of the featured programs, more than a third came forward. With a group like this it was inevitable to hear the same old questions asked:

How important is it to live in SIlicon Valley?
Those in the Valley, including Graham and Ravikant, noted the wider availability of late stage funding and the breadth of mentors in the Bay. Those outside of the Valley including Baer in DC and Cohen in Boulder, maintained that you can create a startup anywhere.

How do you calculate the incubator participant's investment?
Graham explains that his $5000 investment per founder was calculated to match the same amount alloted to MIT graduate students over a 3 month period.

How do you choose the participant companies?
Said Ravikant, "Beyond having a good idea it's important that you're intelligent, energetic and that you've got integrity. Integrity is especially important. Without that you've got an intelligent and enthusiastic crook." Agreed Graham, "It's true. You need to be a good egg - someone who is willing to help other startups after they've graduated." Said Baer, " You also need to be the type of person who is willing to take advice. We've had those that are unwilling to change and that makes it tough to justify a spot."

Once the obvious questions were answered, it was interesting to hear the questions fielded from the floor. They ranged from those on mentorship and incubator logistics to the more personal/political. One particularly animated audience member asked the question: Do you fund founders over 40?

Explained Graham, "We're totally open to funding those over 40, but we honestly don't get many applications. It's a matter of social overhead. There aren't many over 40 who can afford to live like College students. And given that we prefer people who are willing to move and we prefer teams over individual founders, this makes it even more difficult." As a follow up, the audience member asked, "Why does it have to be a team? I'm over 40 and I've started a startup." Replied Ravikant, "Can you start a startup alone? Yes, of course. it's entirely possible to raise kids alone, but it's easier to do it in a marriage."