About
Open Core Ventures forms open core companies around open source software projects. Rather than founders pitching us for investments, OCV identifies open source projects with traction and potential and seeks out builders and technologists to launch our ideas under new OCV companies. The companies pay founders a salary starting on day one and OCV provides operational support until the company raises a seed round. OCV does not invest in existing startups.
Mission & Vision
We’re on a mission to enable more people to become entrepreneurs. We lower the barrier to creating an open core software company which allows more people to contribute value through open source and source-available code.
Our vision is that OCV starts the majority of venture-funded software companies. Our goal is to create 2,000 new companies a year because the leading organization will benefit from the network effects of starting companies at scale. There are about 10,000 venture-funded companies a year and roughly 40% of these companies are venture-funded software companies. In the future, we expect that of the 4,000 venture-funded software companies created annually:
- 80% will be open core
- 80% will be started by VCs
- 80% will be started by OCV
Most software companies will go from proprietary to open core.
80% of venture-funded software startups will be open core. Open core is a business model that builds commercial source-available software around an open source core. Open core has an advantage over closed-source software because it enhances trust and R&D velocity. With open source software dominating more and more of the market, closed-source software companies will be at a disadvantage because more users will expect to be able to inspect, modify, and contribute to the software they use.
Open core software will become the default because it’s more secure, modifiable, and benefits from faster R&D velocity. In the future, people won’t trust closed-source companies when there are open core alternatives.
Most companies will go from founder-started to VC-started.
80% of venture-funded software startups will be started by VCs. VCs will start companies, recruit founders, and pay them a salary to build the company from day one. Startups can’t happen without great founders yet the hurdle to becoming a founder is massive: you have to be able to live without a salary or company-sponsored health insurance for at least a year. Under the current model, the talent pool for startup founders is limited to those who have the financial means to support themselves without a salary.
The venture ecosystem is supply-constrained and there aren’t nearly enough start ups. A shift toward VC-started companies will correct supply and demand, and lower the barrier to entry. More entrepreneurs will be able to start companies that will create more open core software, and provide more value in open source.
The leading VC-started open core organizations will experience a network effect.
80% of venture-funded software startups will be started by OCV. The VC firm starting the most companies will gain network effects and see better outcomes. There are 1,000+ startup accelerators but YC has produced the majority of accelerated unicorns. YC companies benefit from the network effects of learning from other YC companies, founders, and best practices.
OCV will become the leader in starting companies by starting 2,000 companies a year. We will achieve this through our operating model: OCV incorporates a new company with a $2M starting investment, recruits a founding CTO and CEO, and provides operational support. Through our platform model, we provide finance, business operations, people operations, marketing, and recruiting support. Our model benefits from economies of scale when working with outside vendors and contractors, we’re automating everyday startup tasks and developing cohorts of future leaders through peer learning and support.
OCV companies will benefit from the network effects of combined experience, and reputation, and be the recipients of better training, services, and outcomes.