Redstar, From ATG Founders, Reveals Funding Strategy, Sets Up Office Space, Looks to Hire Entrepreneurs
Redstar, the stealthy new venture from the founders of e-commerce software maker Art Technology Group (NASDAQ: ARTG), is coming a bit more out of the woodwork. Redstar, which has been described by co-founder and ATG veteran Jeet Singh as “a company that builds companies,” has moved into a temporary space in Harvard Square this week and is hiring entrepreneurs-in-residence and research interns, Singh told me today. The jobs are also posted on Redstar’s still-sparse website.
Redstar, which is co-founded by ATG’s Joe Chung and Matt Beecher of SCS Financial, is taking a much more “macro” approach than other startup incubator programs like TechStars and Y Combinator, seed-stage fund Project 11 Ventures, and angel investing groups, which typically take pitches from already-formed startups. “The main difference of what we’re doing is we’re not looking for an entrepreneur attached to his idea,” Singh says.
When we first wrote about Redstar in November, just after news broke of ATG’s $1 billion acquisition by Oracle (NASDAQ: ORCL), Singh said the new project was not a venture fund, and not an incubator. Now, the website description and Singh have revealed a bit more of what the company is. The site says that the team is looking to identify startup trends and work on “systematically developing a constellation of concepts through in-house creative processes.” (This crew sure does like star references.) The entrepreneurs in residence will focus on a single business to pitch for funding, “with the goal of becoming President of an explosive, seed stage startup.”
Redstar is building a strong research team (thus the intern hires) to determine which business trends could lend themselves to the best companies, and which entrepreneurs are best poised to run those ventures—rather than trying to find exactly how a hot new company idea might work in the market. “We want to see where good market opportunities exist and work our way down to what businesses might work within them,” Singh says. (The description for the Redstar website on the Google results page references a quote from Gerry Laybourne, founder of Nickelodeon and Oxygen Media, that says, “It’s not an incubator. It’s an Ovulator.”)
The checks that come from Redstar will be much bigger than those awarded to startups through programs like TechStars, which gives up to $18,000 per company, and Y Combinator, which usually caps its investment at $20,000. “Concepts are filtered and refined through a rigorous market research process, and the most promising candidates are seed funded for real-world validation and further rounds of institutional funding,” the Redstar website reads. The funding will vary depending on the startup, Singh says, but Redstar will typically invest between $500,000 to $1 million in the first two or so years as its companies develop, prior to seeking outside VC funding. All of the money initially will come from Redstar’s founding team, Singh says.
ATG, which was started in 1991, went public in 1999. Chung, an Xconomist, went on to start another e-commerce software company, Allurent, which closed its doors late last year. Singh spent time recording albums with his rock band, The Singhs, among other things, and the duo reunited last year to start work on Redstar.
Redstar already has had software entrepreneur Andrew Lau, formerly of Endeca Technologies, working as an entrepreneur in residence for the last six or seven months, and it has brought on a developer and designer in the past few weeks, Singh says. The firm will pay the EIRs a salary while they flesh out new startup ideas, and is looking for entrepreneurs with a few companies under their belt who are familiar with growing startups from scratch, even if they “have not had huge success,” Singh says. “We’re looking for people who are kind of professional entrepreneurs,” he says.