BREAKING: Mark Zuckerberg announces $10M fund for new Facebook Apps.
fund committee/investors include: Mark Zuckerberg, Peter Thiel, Jim Breyer, Reid Hoffman, Rajeev Motwani, Josh Kopelman, Chamath Palihapitiya. Accel & Founders Fund participating... "grants" (?) from $25K-$250K (not debt/equity) more coming soon... info on fbFund on TechCrunch & Techmeme. also good writeups by Dan Farber, Justin Smith, Verne Kopytoff, & Paul Kedrosky.
UPDATE1: appears that Accel & Founders Fund are institutional groups involved... other smaller funds / investors as well. Mark Zuckerberg & Chamath Palihapitiya are representatives from Facebook involved in selection... not clear if they are direct investors as well (unlikely i think).
UPDATE2: full story below from Facebook... my comments/interpretations in green italic.
Q: What is fbFund?
A: fbFund is a fund focused on continuing to create incentives for the development of applications on Facebook Platform by accepting applications for $25,000-$250,000 non-recourse grants from anyone interested in building their business on Facebook Platform. The grants will not come with any conditions except that the grantee use the funds to build their company on Facebook Platform.
dmc: wow, that's a deal. seriously: $25K-250K could take the place of a seed round financing.
Q: What is the total investment in the fund?
A: Initially, the fund will make available $10 million in capital. This may grow over time.
dmc: drop in the bucket for most of the big players, but enough to make a difference for a lot of small app developers.
Q: Who is eligible?
A: Any individual or company, anywhere in the world can apply as long as they have not raised any formal venture funding.
dmc: great deal for international developers / non-US / non-Silicon Valley geeks. get rolling guys!
dmc: smart move by Accel & FF, even if all they get is marketing visibility.
Q: Will there be any equity granted in exchange for the investment?
A: No, Accel Partners and The Founders Fund will have the right to fund these companies first, but beyond this, no equity or debt will be associated with any grant made.
dmc: still, gives them a nice front seat at the show for anything interesting that happens.
Q: Who is participating in fbFund?
A: The investment committee will be comprised of Mark Zuckerberg, Facebook founder and CEO, and Chamath Palihapitiya, Facebook vice president of product marketing and operations. Facebook board members Jim Breyer (Accel Partners) and Peter Thiel (The Founders Fund) will also be part of the committee. Additionally, the fund will rely upon an advisory council that includes Reid Hoffman, founder and chairman of LinkedIn; Josh Koppelman [sic], founder of First Round Capital; and Rajeev Motwani, professor of computer science at Stanford University and early advisor to Google.
dmc: pretty sharp group of folks there. i don't know Jim Breyer all that well, but Peter, Reid, Josh (note: Kopelman with one 'p'), & Rajeev are all accomplished angel / VC investors. Chamath was also at Mayfield before joining FB. (and again, the PayPal Mafia fingers are all over this one ;)
Q: Why are you forming this?
A: We are forming this fund to help grow the Facebook application ecosystem. By decreasing the barrier to start a company, we hope to entice an even larger group of people to become entrepreneurs and build a compelling business on Facebook Platform. We hope this is also a funding model that other venture capitalists will follow.
dmc: amazing that other platform companies haven't used this strategy before. Google & others have made some minor moves in this direction, but given their size it's astonishing that Microsoft, Google, Yahoo, eBay, Amazon, and others aren't all re-investing capital that focuses on their own platform opportunities (note: Bezos has made some moves both corporate & personal in this direction).
Q: How will you decide on investments?
A: Anyone will be able to apply for an fbFund grant from the Facebook website. All proposals will be reviewed by the advisory council and then approved by the investment committee. The goal is to get decisions to potential grantees within the month that they apply.
dmc: definitely some opportunity for subjective assessments here. i'm sure Zuck & Chamath & others will do reasonable evals, but one may wonder how transparent this process will be. hopefully they will also use objective measures and platform metrics as significant part of judgement criteria here.
Q: How does an individual or company apply?
A: Initially, you can mail your business plan to firstname.lastname@example.org. In coming weeks, we will set up an online submission process. Submissions are being accepted immediately.
dmc: get ready for a ton 'o email!!! hate to be the person on the other end of that firehose doing the filtering... hope they have some help on providing first level of filter / triage on the submissions.
Q: What will be the criteria for selection?
A: We want to see the most innovative and ambitious proposals for building a business on Facebook Platform.
dmc: in short: thing BIG kids :)
Q: How long will it take to hear back from the fund?
A: The goal is to get a response to the applicant within 30 days of receipt.
dmc: ... but don't hold your breath on that one ;)