Budding entrepreneurs now have a new option for early stage funding. College Mogul (also a great site for following the college entrepreneurship world!) is reporting that Obsidian Launch has finally started operations. I heard of Obsidian Launch over half a year ago, but until recently, not much had been mentioned about them and their site had little information. Founded by Mike Michalowicz, they are up and running now, calling themselves a “growth accelerator” (and they accepting applications)!

Interestingly, they have a slightly different model than Y Combinator, Tech Stars and the like. They are all very much focused on similar demographics of startups, but they differ in the mechanics of how the funding works. Obsidian doesn’t take an equity stake up front. I couldn’t find much information on the Obsidian site on the exact details, but College Mogul states that Obsidian “takes a percentage of earnings for a specified amount of time”. Their position is that this means Obsidian is taking a longer term view and it more closely tied to the success of the company. This almost seems like a variation of very early stage factoring.

Depending on how you look at it, this might work well for you over an equity stake. Certainly, once you get up and running, you’re left with an undiluted equity picture, though whatever cashflow you might have had coming in the door has been hobbled. It will be very interesting to see how Obsidian does moving forward.

Other differences appear to be that Obsidian is interested in more than just the next big Web 2.0 startup. Their portfolio shows a diverse range of businesses, ranging from leather-working to romantic dinners to fitness products.

As a side note, Obsidian has a resources page with helpful links, though nothing too revolutionary.