It’s been about 24 hours since Mark Cuban started his own stimulus package on his Blog Maverick and whether or not he comes up a winning investment or two, so far, it’s the text-based, geeky equivalent of American Idol. (I would say Dancing with the Stars given our host’s history with the show but it’s not open call.) Monday night, Cuban posted an open-source funding offer with a few strings attached — a dozen, to be exact, although he later added an amendment. (Full list after the jump; the spelling and punctuation, or lack thereof, is part of Cuban’s style.) Given the battle he’s in with the SEC over a charge of insider trading, Cuban’s insistence on being open does have a certain resonance. As for intent, while he donates the equivalent of his NBA fine money to charity, the Dallas Mavs’ owner isn’t in this to give money away. He expects a return for his investments and even requires that the money go into a bank he chooses so he can make sure it’s being spent right. But he doesn’t promise to help the funded business any other way. Will it work? It’s already provided some stimulus in terms of ideas. As for profit, I have this business plan about selling predictions …
— The premise is simple: “You must post your business plan here on my blog where I expect other people can and will comment on it. I also expect that other people will steal the idea and use it elsewhere. That is the idea. Call this an open source funding environment.” Those who get funding get a “head start.” Business can be existing or startups.
— Ruling out advertising: Call it the anti-traffic rule. Cuban will not provide this kind of funding to any business that generates revenue from advertising. “Why ? Because I want this to be a business where you sell something and get paid for it. Thats the only way to get and stay profitable in such a short period of time.” More after the jump.
— Short timeline: The business has to be cash-flow break even in 60 days — and profitable in 90.
— What it is: Cuban predicted: “Some people will love it, some will hate it. It is what it is.” The cascading comments bear him out — some come with serious business plans, a few offering to sell dope, scalp tickers and produce ROI at the racetrack, some are impressed with the idea, some are appalled by the notion of going public with their great idea and some can’t live with the “no ads” rule. Cuban has been working his way through them all, responding to some with blunt advice, suggestions on how to proceed before he would consider funding, and in at least one case, it looks like the conversation may be heading to the next stage. Cuban promises to e-mail a standard agreement to those with businesses he likes and DormBeds.com got the note: “From MC> Email on its way. Good luck !” The business supplies beds for college students.
Mark Cuban’s Open-Source Funding Rules
1. It can be an existing business or a start up.
2. It can not be a business that generates any revenue from advertising. Why ? Because I want this to be a business where you sell something and get paid for it. Thats the only way to get and stay profitable in such a short period of time.
3. It MUST BE CASH FLOW BREAK EVEN within 60 days
4. It must be profitable within 90 days.
5. Funding will be on a monthly basis. If you dont make your numbers, the funding stops
6. You must demonstrate as part of your plan that you sell your product or service for more than what it costs you to produce, fully encumbered
7. Everyone must work. The organization is completely flat. There are no employees reporting to managers. There is the founder/owners and everyone else
8. You must post your business plan here, or you can post it on slideshare.com , scribd.com or google docs, all completely public for anyone to see and/or download
9. I make no promises that if your business is profitable, that I will invest more money. Once you get the initial funding you are on your own
10. I will make no promises that I will be available to offer help. If I want to , I will. If not, I wont.
11. If you do get money, it goes into a bank that I specify, and I have the ability to watch the funds flow and the opportunity to require that I cosign any outflows.
12. In your business plan , make sure to specify how much equity I will receive or how I will get a return on my money.
13. No mult-level marketing programs (added 2/10/09 1pm)
Photo Credit: asterisco