Citing a change in the “political landscape”, The Difference Engine, a publicly-funded Ycombinator-style acceleration programme for early-stage tech businesses, is making cuts to its investment budget.
As a result, they’ve reduced the overall funding from £20k per team to £5k for the idea plus £3,200 per founder (max 3 founders) for which they have also reduced the shareholding from 8% to 6%. The Different Engine, funded in part by One North East, is keen, however, to stress that there have been no cutbacks in the programme itself, which along with investment, offers mentoring and free accommodation for 16 weeks.
Writing in a blog post, Jon Bradford, CEO, The Difference Engine, explains that the following decisions have been made after consulting with the teams from the first cycle of the programme:
1. The teams felt this was where the true value of the programme was and hence the acceleration bootcamp will remain unchanged and will kick off on 4 January 2011.
2. Investment capital will be changed from a “per team” to an “idea and per founder” basis. Teams will receive £5,000 for the idea plus £3,200 per founder to a maximum of three founders. This approach is more closely aligned to commercial programmes such as Y Combinator, TechStars and Startup Bootcamp and remains very competitive.
3. The programme will reduce the overall percentage to 6% of founder shares following the change in the investment approach.
That said, it’s not all bad news. The first cycle four teams have already received funding, including one which is considering an offer of £1m, we’re told. And The Difference Engine expects that another two teams should receive funding before the end of year.
One that note, the next round of applications close on Sunday 4 October for the second cycle, which is due to commence January 2011.