Magoosh, Test Prep Startup From Berkeley, Wins Inaugural North Bridge Seed Competition

6/17/10Follow @wroush

Berkeley, CA-based Magoosh, a developer of low-cost online multimedia materials for the lucrative test preparation industry, is one of two startups to snag the top prize in North Bridge Venture Partners‘ first seed capital competition. Both Magoosh and Pittstown, NJ-based Profitably, a business intelligence software startup focused on small businesses, will receive $50,000 in seed capital from North Bridge, along with $25,000 worth of in-kind software development support and six months of incubation space in the firm’s offices.

The winners were named in an announcement yesterday. It’s the first time North Bridge has run the competition, as the Waltham, MA- and San Mateo, CA-based firm’s answer to the profusion of seed funding and incubator programs springing up across the Bay Area and Boston investing scenes.

There’s no shortage of takers for such programs. North Bridge didn’t publicize the competition widely, but received “an awful lot more” applications than it had expected, according to Cali Tran, the San Mateo-based principal who co-organized the contest. The firm therefore had its pick of the litter across the sectors North Bridge invests in, including software, digital media, wireless and communications technology, materials, and healthcare.

In fact, the firm started off intending to hand out the $50,000 top prize to just one startup, but “based on the quality [of the applications], we opted to double our prize and pick two,” Tran says.

“The top 10 were all pretty amazing,” says Tran. “One of the things we were delighted and surprised about was the level of maturity of the products, even at the seed stage. A fair number of the top 10 were already [earning] revenue.”

The other seven finalists, chosen from entries that consisted simply of 10-slide PowerPoint decks, included the following startups:

—Bizstro, a social media marketing firm
—Cause It’s Cool, ane-commerce product review service
—DPL Health Games, a social gaming service
—Launchtime Mom, a social networking site
—MobileMob, a community for wireless consumers
—Neoflect, acloud-based personal computing startup,
—Ubiqi Health, a mobile health management firm.

Each of these finalists received feedback and criticism from the North Bridge partners who reviewed their entries.

Tran says seed investing is a long tradition at North Bridge. He says more than half of the firm’s deals since its founding in 1994 have been seed investments (meaning investments on the order of tens or hundreds of thousands of dollars, often in return for convertible notes rather than equity). But despite that, North Bridge isn’t widely known among entrepreneurs as a company that invests at the seed stage, Tran says. “One of the objectives of this competition was to introduce ourselves to a community of entrepreneurs who may not know us,” he says.

The North Bridge competition differs from other venture-incubator programs such as TechStars and Y Combinator in that it anoints fewer startups (just one or two in comparison to about 10 per session for Y Combinator and TechStars) and provides them with quite a bit more cash (TechStars companies get up to $18,000 and Y Combinator companies get … Next Page »

Wade Roush is Chief Correspondent and Editor At Large at Xconomy. You can subscribe to his Google Group or e-mail him at wroush@xconomy.com. Follow @wroush

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