What is TheFunded Founder Institute?
May 4, 2009
The Founder Institute helps founders launch innovative companies by providing training, services, and company-building assignments, such as incorporating the business, filing provision patents, and setting up books and records. The Institute offers a four month program, called a Semester, hosted initially in the Bay Area and then expanding to locations around the world. The program participants, the Founders, receive extensive training in weekly sessions overseen by three Mentors – two seasoned CEOs and one domain expert for each topic.
The driving beliefs behind the Institute are that (1) great founders are often overlooked by the current entrepreneurial ecosystem, and that (2) innovative startups have a dramatic positive effect on the global economy. Startup companies consume resources intelligently, put people to work in efficient ways, and produce market driven products at lower costs. Helping smart people start new companies should, in fact, help the global economy.
TechCrunch initially reported on the Founder Institute in March 2009. The Founder Institute has recruited 25 executives to serve as mentors for the founders participating in the program. The mentors will also lead weekly evening training sessions on company-building tasks. Founders are not expected to quit their day jobs to participate in the program, which starts on May 19, 2009 and ends on September 8, 2009. Sessions will be held in the San Francisco Bay Area at locations such as Stanford and Wilson Sonsini Goodrich & Rosati. Class sessions and course material will be available online. Although founders outside of the San Francisco Bay Area are welcome, founders in the Bay Area who are able to attend sessions in person are likely to benefit the most from interactions with mentor and other founders. Future semesters are expected to be held in other locations.
The Founder Institute will assist founders in setting up meetings with potential investors and other parties throughout the semester.
The Founder Institute intends to accept between 75 and 100 founders for the initial semester, although the size may be limited. Applications are due by May 10, 2009. Applicants must:
- Have a preliminary idea and a passion to build something
- Have not yet incorporated, though the Founder Institute will make some exceptions for existing businesses
- Focus on a high tech or innovative sector, such as biotech, cleantech, and information technology
- Possess reasonable training or domain expertise
- Pass basic background and reference checks
The application fee is $50, which only partially offsets costs associated with processing applications. If accepted, the founder must pay a $450 course fee to cover material and administrative costs. Microsoft BizSpark has provided a limited number of scholarships to the program. If a founder’s company raises more than $50,000 in debt or equity financing, excluding funds from the founder, within 18 months of formation, then the founder must pay a tuition fee of $4,500, which is used to cover the Institute’s expenses in providing the program.
The Founder Institute has assembled 25 executives to serve as mentors for the participants and to lead weekly sessions. Mentors for the Summer 2009 Semester include:
- Trip Adler – CEO, Scribd
- Michael Arrington – TechCrunch
- Joe Betts-LaCroix – CTO, OQO
- Jason Calacanis - CEO, Mahalo
- Russ Fradin - CEO, Adify
- Scott Heiferman - CEO, Meetup
- David Higly - CEO Higley & Company LLC
- Jay Jamison – Founder, Moonshoot
- Philip Kaplan – Entrepreneur
- Eugene Lee – CEO, Socialtext
- Bubba Muraka – Business Development, Facebook
- Scott Painter – CEO, Zag
- Aaron Patzer – CEO, Mint.com
- Peter Pham – CEO, BillShrink
- Mark Pincus – CEO, Zynga
- Alain Raynaud – CEO, FairSoftware
- Ken Ross – Founder/CEO, ExpertCEO
- Munjal Shah – CEO, Like.com
- Jen Shelby – Managing Director, Astia
- Jeff Stewart – CEO, Urgent Career
- Brian Thatcher – CEO, Empressr
- Joe Zawadzki – CEO, MediaMath
Additional mentors will be announced shortly.
The evening training sessions will be held weekly with various company-building “homework” assignments. The curriculum is as follows:
Your Vision & Idea Types
May 19th, 2009: Identify a vision for your business
Description: How to articulate your vision and your passion. Does it involve intellectual property, model innovation, speed to market, market positioning? What is required for different types of ideas?
Mentors: Trip Adler | Philip Kaplan | Mark Pincus | Paul Harkins |
May 26th, 2009: Validate your idea with industry professionals
Description: Know your market, your competitors, and your idea. Can it be done? Will it work?
Mentors: Trip Adler | Mark Pincus | Jason Calacanis | Joe Betts-LaCroix |
June 2nd, 2009: Name your future business
Description: What’s in a name, and how do you choose a good one?
Mentors: Bryan Thatcher | Mark Pincus | Jay Jamison |
June 9th, 2009: File your provisional patents
Description: Practical strategy to getting your first patents quickly, cheaply, and with the necessary protections.
Mentors: Alain Raynaud | Eugene Lee | Joe Betts-LaCroix |
June 16th, 2009: Develop a plan to build your idea
Description: What it takes to get from an idea to an offering. What are common planning mistakes and how do you to avoid them?
Mentors: Trip Adler | Philip Kaplan | Munjal Shah | Jason Calacanis | Bubba Murarka |
June 23rd, 2009: Create a revenue model for your business
Description: How to get it. How to grow it. How to track it. How to scale from the first sale to the millionth.
Mentors: Munjal Shah | Eugene Lee | Jay Jamison | Jen Shelby |
Books and Records
June 30th, 2009: Set-up accounting practices
Description: Set-up an accounting system to grow with your needs. What do you start with? Where do you end up after scaling?
Mentors: David Higley | Ken Ross |
Budgeting and Cash Flow
July 7th, 2009: Develop budgeting practices for your model
Description: What is right for a new business: annual, quarterly, or monthly budgets? What does a good budget process look like?
Mentors: Joe Zawadzki | Ken Ross |
Hiring and Firing
July 14th, 2009: Implement hiring policies and practices
Description: When to hire and when to fire? When is it ‘too late’? Choosing co-founders, and forming a founding team with a well-rounded skill set…
Mentors: Scott Heiferman | Joe Zawadzki | Jay Jamison | Paul Harkins |
July 21st, 2009: Identify world-class talent
Description: Who are the best in your field? Can you sell them on your vision?
Mentors: Jeff Stewart | Scott Heiferman | Russ Fradin | Bubba Murarka |
July 28th, 2009: Build a value generation plan
Description: How to prepare for an exit long before it happens. How to keep your start-up in the sights of both partners and buyers. How to build enterprise value every day. Don’t get caught off guard with an opportunity.
Mentors: David Higley | Peter Pham | Russ Fradin |
August 4th, 2009: Select key vendors
Description: What to in-source. What to outsource. How to hire the best vendors for the best rates. What tools does the business need?
Mentors: Munjal Shah | Alain Raynaud | Peter Pham | Joe Betts-LaCroix |
August 11th, 2009: Incorporate the business
Description: How to set-up the right company structure to attract great employees and investors. What corporate formalities are required, and when?
Mentors: Ken Ross |
August 17th, 2009: Create a messaging plan
Description: How to sell the story of your company and your offering.
Mentors: Bryan Thatcher | Scott Painter | Bubba Murarka | Joe Zawadzki | Jen Shelby |
August 18th, 2009: Start outreach to key media sources
Description: Getting your vision and company name out there. From blogs to radio, what works and what does not?
Mentors: Philip Kaplan | Jason Calacanis | Peter Pham | Bubba Murarka |
The Funding Lifecycle
August 25th, 2009: Create a funding plan with targets
Description: What are the typical stages of the funding life cycle for different types of startup businesses? What kind of specific milestones should one expect to meet in order to progress through those funding stages?
Mentors: Scott Painter | Scott Heiferman | Russ Fradin | Paul Harkins |
September 8th, 2009: Create a perfect pitchdeck
Description: How to explain and present your business to target partners and investors.
Mentors: Bryan Thatcher | Scott Painter | Eugene Lee |
Warrants and Bonus Pool
Each founder participating in a semester’s program will sign a Founder Agreement, which includes an obligation to grant a warrant to the Founder Institute to purchase 3.5% of the founder’s company’s fully-diluted capitalization immediately after an initial equity financing raising greater than $100,000. The exercise price will be the price per share to other investors in the financing. The founder’s company may terminate the warrant on or prior to the initial equity financing by paying the Founder Institute $100,000. In addition, if the founder is removed or resigns as a director and does not certify to the reasonable satisfaction of the Founder Institute that such resignation or removal was voluntary, then the founder’s company must pay the Founder Institute $100,000. Forms of the Founder Agreement and the warrant are available on the Founder Insititute website.
30% of the proceeds from the warrants received within five years from the start of a term shall be set aside in a bonus pool for the founders participating in a particular semester. In addition, another 30% of the proceeds will be set aside for the mentors, with a portion of that based on founder reviews.
Founder friendly documents
The Founder Institute has developed Class F common stock, which provides founders with a maximum amount of control over the founder’s company. TechCrunch and VentureBeat recently reported on this innovation and Adeo Ressi provided his thoughts in PEHub. A form of Certificate of Incorporation that includes provisions for Class F common stock, along with a form of restricted stock purchase agreement are available on the Founder Institute website. The Founder Institute requires founders to use these documents, or other documents approved by the Founder Institute, when forming a company.
[Disclaimer: I represent the Founder Institute.]