Re:Ask HN: Is an Autonomy Fund a viable business model?
by otoburb on Saturday April 20, 2013 @05:43AM
(#5580895)
Assuming total compensation of $200K, 1:1 private/public funds, cohort of 28 gives a yearly burn of $5.6M ($2.3M for the local municipal to raise) for, say, 5 years = $28M (3yrs = ~17M) during (or hopefully after) which they want to see a payout coming directly from the AF's revenues.
You mentioned 37.5% earlier, but the city would probably expect you to model this in such a way that X% will be duds, so their return will most likely be much lower than 37.5%. 10x-100x VC-istan-like hits should not be banked on given the sole purpose of the Autonomy Fund is to create medium-growth companies (10%-40% p.a. growth rates).
Perhaps factor in a legal, HR, accounting, IT and facilities teams for AF-backed individuals (i.e. backend G&A organizational infrastructure) @ 10-15% and your baseline burn rate should be adjusted accordingly. Let's say $6.5M per year, of which $3.25M comes from municipal/state/federal public funding.
You mentioned 37.5% earlier, but the city would probably expect you to model this in such a way that X% will be duds, so their return will most likely be much lower than 37.5%. 10x-100x VC-istan-like hits should not be banked on given the sole purpose of the Autonomy Fund is to create medium-growth companies (10%-40% p.a. growth rates).
Perhaps factor in a legal, HR, accounting, IT and facilities teams for AF-backed individuals (i.e. backend G&A organizational infrastructure) @ 10-15% and your baseline burn rate should be adjusted accordingly. Let's say $6.5M per year, of which $3.25M comes from municipal/state/federal public funding.