Tomorrow a new breed of investment firm called Prototype Invest will officially launch, though the site is available now. Prototype Invest is a unique type of early stage investment firm. Rather than put money into startups, Prototype supplies technology in exchange for equity. This is an investment firm for anyone who has ever been told, “Ideas are a dime a dozen, kid. Come back when you have a working prototype.”
Founded by web developer and Denmark native Michael Christensen, Prototype Invest will provide people who have an idea but don’t possess programming or design skills a way to take their idea and turn it into a prototype to show investors. “Think of us as a Venture Capital firm providing software, web applications and guidance, instead of money,” says the company on the site. “All we ask for is equity in your idea – you don’t have to pay anything for our services.”
The company has a network of developers and designers which it will employ to create prototypes or full products based on ideas submitted by entrepreneurs. In return, it will take an equity stake in the app it helps create. Prototype Invest will evaluate ideas submitted to it based on merit as well as the character of the entrepreneur who pitched it.
“There are so many great ideas wasted for the wrong reasons – we are here to change the rules of the game,” Christensen told me. According to Christensen, any entrepreneur who is unhappy with the results of their relationship with Prototype Invest can walk at any time.
Prototype Invest has a lot riding on trust — in fact they say on their front page that “without trust we simply can’t exist” — which means that ideally, anyone willing to fork over an idea to the service has not only been told that ideas are a dime a dozen, but also truly believes it. Prototype will work out contracts and the amount of equity taken on a case by case basis, and Christensen tells me that they’re open to signing an NDA with entrepreneurs prior to being pitched.
But there will need to be a certain amount of trust on both sides that ideas won’t be stolen or misappropriated.
Along with development services, Prototype Invest also offers to help entrepreneurs pitch their idea (and newly minted prototype) to investors, which makes sense given that Christensen and team will only make money if the app is a success. At some point in the future the team is also considering offering Y Combinator-style microfunding.
Will Prototype Invest work? It’s hard to say, but there is little doubt that they won’t lack for ideas being sent their way — they are a dime a dozen, after all.
