Dumb Money

Mr Cranky Dumb Money Venture Crapital

Dumb Money is someone willing to invest in a Venture Fund run by a Tech.co technology rag full of “journalists” who never saw a bad idea they didn’t think would make a great company.

I just got this email from Tech.co founder Frank Gruber:

From: Frank Gruber
Date: Fri, Mar 3, 2017 at 2:20 PM
Subject: Re: Timely: Opportunity To Get Involved
To: Glen Hellman
Cc: Jen Consalvo, Jon Spinney

Hi Glen,

I hope you’re doing well. We haven’t heard from you in a bit so I wanted to circle back one last time to see if you’re interested in getting involved in TechCo Ventures. The 6 companies targeted for our initial fund are:

  • Blendoor
  • CoSchedule
  • Klickly
  • Peanut Butter
  • ProxBox
  • ShearShare

We have finalized terms and are prepared to begin the closing process. Please let us know your final indication of interest and we will send along final documents to execute. Final documents will be sent via DocuSign from Jon Spinney from Malartu (jon@malartufunds.us). So look for that coming to you soon.

We look forward to having you involved and are available this weekend to answer any questions regarding the close.

Thanks,
Frank

Frank Gruber
CEO, Tech.Co
Author of Startup Mixology
Host of Innovate & Celebrate Conference
Twitter | Facebook | LinkedIn
tech.co
Truthfully…. I found being invited to lose money in this fund as an insult.  Why not just say… hey, you seem stupid enough for this.

My thoughts on the Portfolio:

  • Blendoor – a mobile job matching app that hides candidate name and photo to circumvent unconscious bias & facilitate diversity recruiting.
    • Mr Cranky Says – So far raised $165K in 3 rounds. Indeed and LinkedIn are huge entrenched competition. Silicon Valley Hired.com is dying after raising $100 million.  Hired at least was designed to answer the pain that a hiring company feels…. sourcing curated qualified scarce talent. I’ve never heard a hiring manager say, I would pay money to hire people who I’m biased against. That aside… join everyone and their brother going to disrupt the job search market. Lastly, how do you keep the bias out of the live face-to-face interview? Do you have the person interview behind a privacy screen and use a voice distorter in the interview? Does this just move the bias further into the pipeline?
  • CoSchedule – is the industry’s top content marketing editorial calendar solution. The popular web-based app serves 7,000 customers worldwide, helping busy teams plan, organize, and promote content easily, efficiently and effectively. The company operates two offices in Bismarck and Fargo, N.D., and is the fastest-growing startup in North Dakota.
    • Mr Cranky Says – Really the top content marketing editorial calendar solution? Says who? Being the Fastest Growing Startup in North Dakota is like being the tallest pygmy or the blind person with the best vision. Here’s Yet Another Social Media Scheduling Tool from the Social Media epicenter of North Dakota. Don’t get me wrong, I think Silicon Valley or New York need rival markets, but a social media marketing platform requires the need for talent, experience and capital that aren’t available in and aren’t moving to North Dakota. Density does count for something. BTW… what does serving 7,000 customers mean? Is that 7,000 paying customers? Or is it 1 free trial customer who reaches 7,000 twitter followers?
  • Klickly –  lets you buy what you want, when you see it. No navigating away from your content. No annoying shopping carts.
    • Mr Cranky Says – Wow! I’m going to run out and short Amazon!
  • Peanut Butter – helps employers attract and retain millennial talent by offering company-sponsored contributions to employee student loans.
    • Mr Cranky: An Idea does not a company make. Peanut Butter is a better sandwich spread than an idea and even a good idea is not a company. This company is listed on Crunchbase as a non-profit. That means one of two things. 1) How do you invest in a non-profit, 2) or is this really like 99% of all startups an unintentional-nonprofit just being honest that they’re never going to make any money. Is this an investment or a donation? Either way it’s a write-off.
  • ProxBox –  is a communication and collaboration application for real estate agents. Its software solution combines small proximity sensors called beacons with a mobile application to improve its users’ interaction with their current environment and automatically saving and sending content, documents, photos, and videos to the buyers smartphone based on where they are physically located.
    • Mr Cranky Says – Wow, this thing requires so many moving parts to come together at one time for it to be successful. It requires adoption of “Beacons,” it requires traditionally non-tech savvy Real Estate agents to know what the hell a beacon is, it requires mass adoption to have any value.  Until it has mass adoption, it’s like being the only owner of a fax machine.
  • ShearShare – connects salon owners to stylists to fill empty salon chairs.
    • Mr Cranky Says – Okay…. I might like this one! But I’m not investing in it.

Why’s that a Dumb Money sign?

  1. Track Record – In 2012 Tech.co readers named Glen Hellman the #1 Angel Investor in the United States. Folks, I knew Glen Hellman and I am no Glen Hellman… that is if Glen Hellman is the #1 Angel Investor in the United States. He’s not the 2,487th top Angel investor in the United States. Hell… he’s not even the top Angel Investor in his house (Here’s the latest results of that pol)l. Any one that would choose Glen Hellman as a top 100 investor is the definition of Dumb Money. I don’t want to join any club that will have me.
  2. Indiscriminate Taste – Tech.co is a Tech Rag that hasn’t met a founder, that isn’t awesome and a bad idea that isn’t a company. They have the discriminating taste of a Donald Trump who prefers KFC chicken to chicken (KFC Chicken, Subway Chicken along with Squirrel, Rabbit, Rattle Snake are among the things that taste just like chicken that aren’t chicken). Tech.co has a worse track record of picking companies than Jenifer Lopez has in picking men. Only Dumb Money would trust the Tech.co picker.
  3. Weak First Cohort – Why would anyone pay a management fee to lose money investing in this cohort of money losing investments? I would much rather set 100% of my money on fire without having to siphon off some of the cash to people who have no startup investing credibility. Tech.co has access to a pipeline of some of the worst ideas that ever thought an idea was a company. Look there was a day when I was an Angel Investor… (Not anymore so don’t send me uber stupid ideas dressed up as a company even if Tech.co said readers said I’m the #1 Investor who sleeps on my side of the bed) and I would have to work hard to find a pipeline of deals less qualified to succeed than this cohort. This portfolio is like the Startup Dumb Money version of  Dogs of the Dow portfolio strategy.
  4. Shady Conflict-of-Interest-ridden Curation – Tech.co is in the business of hyping startups to make money off the startup industrial complex. How does a Journalist handle the conflict of fairly covering startups while picking winners over losers.  Even the people Tech.co uses to curate companies are inexperienced and at times conflicted. Here’s the self-described Journalizer, Elliott Volkman writing for Tech.co about the Top companies in DC in 2015. What’s wrong with this picture? Well in 2015 Elliott, worked for Trustify and wrote about Trustify without disclosing any conflict. Volkman couldn’t run away fast enough from Trustify after getting a first hand view in to one of DCs best known dumpster fires.
  5. Bad Taste or Guilt by Association-  as an example, Tech.co seems to love dumpster fire companies. They drooled all over dumpster fire Lemur, a company that got past demoware. They drooled all over Speek which ended in a dumpster fire after ejecting co-founder Danny Boice prior to a money losing acquisition. They drooled all over Trustify which is the very definition of a dumpster fire.

So no Frank… I think I’ll choose my own method to burn cash. I don’t need your help. In fact, I might invest in a DCInno fund first, at least their crappy portfolio would have a DC flavor.  No thanks kids, I may be dumb money but I’m not that dumb money.