Tuesday, September 10, 2013
Is OFEF the Best Way to Fund Your Startup?
CMU’s Open Field Entrepreneur Fund, otherwise known as OFEF, was conceived as a way to help erstwhile entrepreneurs at CMU. Jon Kaplan and I felt that CMU had great students, fostered incredible ideas, but lacked the startup ecosystem found in the vicinity of MIT, Stanford, and other top business and engineering schools. We felt that CMU alumni could achieve more, for themselves, for the economy, and for society, through their own efforts rather than “just getting a job.” How could we foster that? Jon felt that by adding to the pool of investment opportunities associated with CMU innovators, more startups might be fostered by CMU alumni. So Jon raised some money and created OFEF.
The idea behind OFEF is simple: create an evergreen fund that invests in startups that are founded by CMU alumni, and create a network of mentor-alumni to help these startups.
Of course, every simple idea gets complicated once you start implementing it. What is the definition of “founded by”? The answer is too complicated to put here. Who is eligible? Answer: someone who received a degree from CMU within the last 5 years. You also need to demonstrate that you can execute your idea (full-time commitment, ability to create a cogent plan, etc…) and raise some matching funds from an entity other than OFEF.Unlike a VC or anything else I have heard of called a “fund”, OFEF does not exclude applicants based on ideas, market size, investment appeal, or the like. You must create a potentially profit-yielding entity, something that is incorporated. Non-profits are not eligible, nor are real-estate holding companies, etc… You can’t be trying to break any physical laws, but other than perpetual motion machines or Feynman ratchets anything goes. Laser toothbrush? Sure. Backyard bone-mapping software for dog owners? Probably. Drug delivery via mosquitos? You bet.
We want to help you with a bit of entrepreneur-friendly seed financing. Making the idea work is your problem...Read more»
By: Peter Stern