At the recent iPhoneDevCamp, California college student cum freelance Web designer David Stillman experienced in a few hours what many fledgling tech businesses and their backers often endure over months of sweat equity. The Wiki-style event was an unofficial development conference for the iPhone, organized by volunteers and free to the public. It was the place to be over the weekend if you had an innovative iPhone startup idea, or wanted to invest in one.

At the conference, Stillman stumbled upon another developer with just such an idea, and he quickly became caught up in the plans to form a new company around it. Even a couple of venture capitalists appeared interested. Everything was going great. And then his bubble burst. "Right when we were getting into the meat of it, a group of four guys walked up and demoed the exact app we were working on that they started building two weeks ago. We were all a bit dumbfounded — not angry — when the VCs gave the other guys their cards and walked away. We had a company in the making, and it was disbanded before it even came together."

Hopefully, Stillman was smart enough to grab a couple of those business cards for himself. Who were those guys, anyway? Perhaps a couple of VCs from Bay Partners, which just launched a seed fund for startups developing applications for Facebook? —Stacey Higginbotham

See blog item from iam.stilldavid
See iPhoneDevCamp site
See Tech Confidential post on Facebook seed fund