If you hadn’t heard, office space in New York is increasingly hard to come by. The Hatchery, the startup advisory firm behind the infamously rigorous pitch events “Are You Serious?” and The Gauntlet, wants to help with that–and a whole host of other problems early-stage startups have to deal with, such as finding customers and growing revenue.
To that end, Hatchery founder Yao-Hui Huang is launching the Hatchery 500, named after the space’s address at 500 Seventh Avenue at 37th Street. The 16,000 square foot space offers shared desks ($450/month), dedicated desks ($850/month), and offices (starting at $3,100/month). There are plasma-enabled conference rooms and a 1 gig+ fiber connection. But the real draw is likely the collaborative milieu, which includes events, workshops and the chance to apply to something called the Sweat Fund. Please allow Ms. Huang to explain.
“It’s not a fund of dollars. It’s a fund of sweat,” Ms. Huang told Betabeat via Skype. Luckily, we were able to convince her to offer us a little more detail. The fund works thusly: Rather than offer equity for cash investment, the startups that apply offer warrants for access to “collaborators” who can help them, “get access to the deals they want,” Ms. Huang explained. “It’s a more direct way to get what companies need–revenue through deals. The first few deals are hard for companies. It takes awhile to build those relationships.”
Although the connectors, a group that includes “industry leaders, corporate executives, investors” wanted to keep their names out of the spotlight, Ms. Huang mentioned individuals from companies like MTV, DMV Capital, and Paladin Capital. (The investor who backed Hatchery 500 also wanted to remain anonymous.) The amount of equity, in the form of warrants, depends on the stage of the company, and comes with a guarantee of sorts. “If the company is unable to close the deals they are brought into, the company may be removed from the fund program,” she said. “If no transactions/deals are done, the equity is returned.” If a deal is closed, whichever collaborators helped create business for the startups share in the pool. “It’s prorated based on participation.”
If you’re looking for proof of the Hatchery’s startup bona fides before applying, the video on their site is a good start. There you’ll see Drop.io founder Sam Lessin, who was acqui-hired by Facebook, describe the The Gauntlet’s pitch prep as “without a doubt the most professional and intense process I’ve ever gone through to speak at an event.” In the past, Are You Serious? has attracted VCs from firms like RTP Ventures and Bain Capital Ventures for some real talk on whether your daily deals solomo startup is just another me-too. (Spoiler alert: yes, it is.)
In terms of the events and workshops Hatchery 500 will offer, Ms. Huang said she’s not trying to reinvent the wheel. There will be no engineering classes, à la General Assembly. Rather, the space will be open to Hatchery’s 100-some partners, like Digitas, IAB (Interactive Advertising Bureau), Georgetown University, NYU, Voxel, to host what they see fit.
Startups won’t be able to work out of Hatchery 500 until June 1st, but events will start May 1st. ”We will do weekly happy hour and series of hackathons with real hacking,” said Ms. Huang. Real? “Real coding competitions with leaderboard, pitting real developers against each other to see who is really the king of the hill. The Social Network–without the beer,” she said, adding, “Or maybe some beer :)”