Open Capitalist

Open source software has thrived due to two main reasons- effectively zero cost of production and distribution.  Anyone reading this has the tools needed to contribute to an open source software project as the only physical tool required is a computer.  The software required to develop other open source software is also open source and freely available.  The question then is how to reduce or eliminate the cost of entry and distribution for everything else to enable the benefits of open source everything.

Without a profit motive your ability to find start-up capital for an open source project through traditional channels is nearly impossible.  This is the gap we are trying to fill.  We want to provide funding for projects that don’t have profit as the primary motivator. 

How you get funding:

Post a project idea and generate interest in your project.  We want to expand open source fundamental in as many directions as possible so there is no limit on what type of project can be submitted.  We are interested in both the practical and impractical as one of the benefits of open source development is that it makes the “long tail” development possible.

Currently we will select which projects get funded based on editorial review.  It is our intention to make this completely based on user input as the user base grows.  Regardless of the method, if your project idea generates enough interest you will have the option of turning it into an actively funded project.  Due to the varying nature of the business models we hope to generate, the funding requirements and methods will be highly varied. 

One example. You propose the production of Widget X.  We agree to fund it and propose that if it is successful then some multiple of your generated profit goes to support future project ideas.   Conversely you might suggest after paying back the initial start-up capital that all proceeds from the sale of Widget X will go to support humanitarian efforts.  We could offer funding for that as well.  In order to keep the system solvent however, we will need to have the majority of projects paying more into the system then they initially received to cover those projects that simply don’t work out.

Our cut:  Zero.  For the foreseeable future this will be privately funded.  If the website ever gets to the point that it can’t afford server space; selling ads would be preferable to requiring any proceeds to be paid to Open Capitalist.

Your cut: we don’t limit it.  This is governed by the users.  The caveat being that you must state how you will distribute profits.  If your motive is profit and you are looking to find people to contribute their expertise to your project then this will create the limit automatically.  If your goal is to become a billionaire then I personally wouldn’t contribute my time to your project.  If you want to make a living, put your kids through college and have a beer once in a while; then I personally would contribute my time.

Your requirements:

First and foremost your project must be open source.  I can see possible instances where this is impossible and we will handle those on a case by case basis.  An example, might be a project that would definitely generate competition immediately, but your intention is to first train a disadvantaged group to produce said project.  We might be inclined to fund your efforts first to give you a head start in order to achieve these goals.  We would never fund anything requiring a patent however.

Secondly your project’s books must be open.  The two main purposes this serves is to allow everyone to see how efficient their resources are being utilized and allow others to find possible avenues to contribute.  The first reason is self explanatory, the second one works as follows.  I see an electronic circuit you paid to have designed, so I offer to donate my time to keep you from incurring this expense in the future.  A machinist sees that you paid to have some part machined, believing in the value of your project they offer a better price.

Sign a detailed contract.  This would be impossible to detail every aspect but it would generally consist of: profit distribution, funding required, open source documentation requirements, and pay back plans if any.

That is a quick overview of how we want this to work.  It is completely expected to change over time, but it is a start.