This Start-Up Is No Upstart, Founder Says

At 48 years old, with a handful of business start-ups behind him, the last thing Steve Cross--or the market--appears to need right now is another “dot-com” start-up.

But in the current environment of skepticism and deeper scrutiny among the venture capital crowd, the bald and bespectacled Cross said he plans to use his experience to his advantage.

The founder and chief executive of YourFreeStuff.com, an Internet portal to more than 700 offers of brand-name freebie merchandise on the Net, Cross was in Manhattan recently to tout the start-up to the financial and media worlds.

It is difficult to imagine a less friendly environment for Internet-only start-ups, particularly for those whose primary business is, well, free stuff.

But Cross, who took software company Connectix Corp. from less than $1 million in revenue to more than $70 million during his tenure in the 1990s, said the environment couldn’t be more ripe for his brand of start-up.

For one thing--and he’s not kidding--he believes investors will be more open to a semi-senior citizen in a world overrun by twentysomethings whose business models appear largely improvised.

“The problem is, a lot of these guys on the Net have no experience,” he said. “I’m 48 years old and bald. I’ve done five start-ups. This is not one of these deals where we don’t know how we make money and when.”

By providing links to offers that its low-overhead staff of college interns daily puts to the scam test, YourFreeStuff hopes to carve out a niche by developing a broad base of repeat customers and becoming a direct e-mail link to those customers for a range of businesses.

It also plans, once it wins that mass appeal, to sell advertising, and to offer placements to e-tailers such as Eddie Bauer clothing, links that are now free.

Rather than the normal three years, the company projects profitability and an initial public offering next year, Cross said.

The low overhead aspect of his business is important. Cross said the company, which has four employees, is running just fine on first-round financing of less than $1 million, and hopes to raise slightly more for its second round.

“Those guys raised too much money, and when you raise too much you spend too much,” he said of his dot-com brethren. “We have no desire to raise $20 million we’re never going to recover. It doesn’t make any sense to us.”

In addition to college interns, YourFreeStuff treats itself to few of the perks that the dot-com crowd did before this spring’s NASDAQ fall-off. Lunches at the Subway sandwich shop near the company’s San Jose headquarters are the norm, Cross said, as is the $4.95 lunch special at the local Chinese food joint.

“I wake up nights thinking, geez, this is other people’s money,” he said.

In his mind, about the only thing the company has going against it is the dot-com moniker.

“Dot-com is absolutely an albatross these days,” Cross said.

“The interest level is really good, I think because we’re not spending a fortune. And not one of us has to do this.”