Take a look at funds like Y!Combinator and Techstars. They are low first round players - $20k to help new companies get started. That is really where I see the potential for this as well. - Brad Nickel

like angels - Hao Chen

Like mini Angels? Am I wrong to say that microVC is smaller than Angel funding? - Yuvi

Yes and no. My thought was that there are options for bundling investments up to say about $25,000 even if very small all together or include people that could afford say $1000 - $5000 as part of a bundle. I've also had people say that micro funding levels make sense for companies that just need a little cash to get things rolling. Since we are doing this on the fly, I would love to hear what you think. I think there is room for both. - Brad Nickel

So, you collect money from diff. people, give it to 1 person who handles all the paperwork? - Yuvi

Brad, it doesn't necessarily need to provide VC money that the company really needs. MicroVC could be simply a [well-connected] club of sorts that gets involved in companies that already have other streams of financing. Then it's marketed as an opportunity for smalltime investors to risk a little bit of money for fun and relatively big rewards. For example, MicroVC would invest $20K in, say, SocialMedian, and then sell membership units in the SM trust it created - for example 100 units at $200 each, plus ~ $10 admin fee per unit. If and when there's a liquidity event, the money gets dispersed and it doesn't even have to take a cut of the profit to make money for itself (of course that's an option). So for that SocialMedian transaction, MicroVC would collect $1K in fees. - Aviv

Of course MicroVC could roll in the fees into the investment and hope for a liquidity event. That amounts to free money basically. - Aviv

Aviv, that is the model I was speaking to earlier and somewhat similar to my current business, so I really like that way of doing things and think logistically it makes the most sense. - Brad Nickel