VenturePact: instead of capital, these Penn students will invest in startups with product development

If you’ve got a killer business idea, why waste time looking for the perfect CTO? Get the product built already.

That’s the thinking behind VenturePact, a new project from two Penn students that aims to connect developers with entrepreneurs at the earliest stage of a business venture.

The cofounders, Randy Rayess and Pratham Mittal, compare it to the traditional venture capital model, but instead of funding, VenturePact offers product development.

Entrepreneurs, apply here. (The first round of applications recently closed, but you can apply to be considered for future rounds.)

VenturePact cofounders Pratham Mittal (left) and Randy Rayess.

Mittal and Rayess, both 21, say VenturePact is driven by two main problems:

1. There’s too many good ideas out there but not enough good engineers and,
2. Outsourcing is flawed — there’s no incentive for outsourced developers to do good work, especially because they’re paid by the hour.

From VenturePact’s team of more than 40 engineers and designers, as well as roughly 10 mentors, Mittal and Rayess aim to create the perfect development team for the entrepreneurs they choose. No money changes hands unless the entrepreneur is happy with the product, they say. The entrepreneur can end the relationship whenever she feels she’s ready for her own development team.

More than 20 entrepreneurs applied for the first round, Mittal and Rayess say. They’re currently finishing interviews with prospective candidates. This time, they’ll choose three to five companies, but in the next few years, Mittal and Rayess hope to have 30-40 companies involved at a time. While they’re focusing on Penn and Philly right now, they’ll formally expand to Harvard, Columbia and Stanford next month.

Mittal, who grew up in India, and Rayess, who’s lived in Lebanon and California, say they’ll keep the business here for the foreseeable future. They’re going to bootstrap for as long as they can, they say.