It’s a great time to start a company.
That’s the mantra at Venture Out, a Seattle-based 12-week program that aims to help tech workers leave big companies and create their own startups.
Previously: New program in Seattle aims to help tech workers leave big companies and launch their own startups
The organization launched last year and is now accepting applications for its second cohort that kicks off July 13. It also recently raised a $700,000 investment round led by Microsoft’s VC arm M12. Other venture capital firms including Founders’ Co-op, Flying Fish, and Liquid 2 Ventures invested.
Venture Out wants to provide a bridge for corporate employees who have a startup idea but need help leaving their day job to make the leap. Its first cohort featured eight companies; founders worked for Seattle-area companies including Microsoft, Payscale, T-Mobile, Expedia, and others.
Venture Out takes 4% equity in each accepted company. Its program requires members to work 10-to-20 hours per week on their startup. It targets companies that have raised less than $500,000.
Venture Out co-founder Sean Sternbach said the WFH movement and widespread layoffs across the tech industry mean that workers have more flexibility to “validate their startup ideas.”
“Seattle’s two largest tech companies, Amazon and Microsoft, both have stock prices near all-time highs, and all of this combined with WFH presents an opportunity for these tech workers to venture out and build Seattle’s next great startup,” Sternbach said.
Companies such as Airbnb, Square, and Stripe all launched during the global financial crisis, so there is precedent for the next billion-dollar idea coming out of a downturn. And some sectors such as cloud computing, healthcare, gaming, and others are seeing big spikes in usage as people stay home.
However, venture capital funding to startups is expected to drop amid the COVID-19 crisis, though some companies are still raising capital.
Sternbach said Venture Out’s ties to Microsoft alumni and alumni of other tech companies helps give the program a strong base of angel investors for its cohort participants.
M12 declined to comment on its investment in Venture Out. Founded four years ago, the venture fund invests in early-stage B2B companies.
“There is no better tech company than Microsoft, and to have their support means everything,” Sternbach said. “We hope to strengthen this relationship with Microsoft, and other tech companies, over the coming years, and support them however we can.”
Sternbach left a manager role at Amazon last year and teamed up with Ken Horenstein, who previously was a manager at M12, to help launch Venture Out.
Venture Out is reducing the number of accepted startups for its second cohort and extending the program by two additional weeks. The COVID-19 crisis has forced programming to go virtual, but Sternbach said the transition hasn’t affected the continuity of the program.