Over 3 months, you eat dinner once per week with other awesome founders. You make ruthless progress on your startup, since you only focus only on what matters. Each week, very experienced founders give advice during fireside chats. You also likely will make lifelong friends. Plus $20K and free housing.
The best program like this is called Y Combinator. The acceptance rate is ~1.3%.
We help early-stage founders that Y Combinator is not yet accepting into their core program. We hope you can "graduate" to Y Combinator next.
We're just getting started. Our first cohort is ending in December 2018. Right now, we run one cohort per quarter in San Francisco. By the end of 2019, we plan to have at least a dozen cities up and running across America. Our next batch starts on Feb 4 2019 in SF. Apply by Jan 9.
We follow the Y Combinator ethos. Your time should be spent talking to users, building product, and staying healthy. Every Wednesday, there are group office hours, followed by dinner and an intimate fireside chat with an accomplished founder. You can request individual office hours if you feel stuck on a problem.
Unlike most non-YC accelerators, you focus on real work. The program is a ruthless sprint to focus on the 'most important thing', so your startup becomes valuable. It's not about spending 3 months in classes or pitch workshops.
We don't charge an equity fee. However, we do invest $20,000 on with an uncapped SAFE with MFN provision. This basically means that we get the same terms that later investors offer you. You can read about how this works here.
If, after the end of the cohort, you are happy with the value we offer, you may opt in our advisor program. If you choose to do this, we take a 1% advisor stake, vesting over two years. You can fire us anytime.
We like a family vibe, not a startup factory. By keeping the number of startups in the cohort low, we hope the dinners, office hours, and fireside chats will be a more intimate and effective.
We're not Paul Graham. But we do our best. We've all founded companies and internalized the hard lessons. We're very confident our advice is worth it. We also certainly will not offer negative value like most of the accelerators that distract founders from doing real work.
That's our goal. But it's not through any "inside access" (recommendations from YC alumni count for little) or "interview prep" (the best way to prep is to know your business inside out). It's by helping you become a better startup.
Our first cohort was 6 startups. One has already been accepted to YC. We hope two more will be ready by next batch.
That's fine! We'll even try to help with any visa issues.
You never know. So just apply! We have no problem helping founders who are very early-stage. That's why we exist.
We promise a bed, and that's about it. Pretend you are in college, only instead of a dorm, it's a swank place in the middle of the city.
No. Please do whatever is best for your startup. We only ask you attend the Wednesday office hours, dinners, and fireside chats (6pm-10pm).
No. We believe face to face meetings are vital. Startup School is a great option for remote.
Nothing. We’ll provide housing and a $20k investment so you can focus on building your business.
When you apply to XX, one of our partners may offer to become your advisor. XX will then invest $20,000 on an MFN SAFE. We also take 1% of your company on common stock in a separate advisor agreement, vesting quarterly over two years, with a 3 month cliff.
SAFE stands for Simple Agreement for Future Equity. You can read about it here. It means we have the right to get equity at some future date when you raise follow-on financing.
MFN means Most Favored Nation. This basically means that we get the same terms that later investors offer you. You can read about how this works here.
An simple example: We invest $20,000 on an MFN SAFE. 6 months later, you raise $1m on a SAFE with a $12 million valuation cap. A year after that, a Venture Capitalist invests $10 million, valuing your company at $40 million. We then have the right to get $20,000 worth of shares, priced at a $12 million valuation.
It means you can fire us anytime as your advisor, and not pay us the full 1% equity.
Vesting means we don't get all of our stock at once. Let's say 1% of your company currently equals 20,000 shares of common stock. We vest 2500 shares every 3 months until we earn the full 20,000. If you fire us the first month, we get no additional shares. We'd continue to hold a $20,000 SAFE.
No. We don't think that's a good idea. We advise founders to never give out advisor shares unless that person is also willing to invest.
XX partners will look at your application. Some may decide to reach out to schedule an interview. If we decide to become your advisor and invest $20,000, we will send you an offer, letting you know which of our partners would like to work with you. You can accept or reject our offer.
You can expect at least a weekly 30 minute checkin with your lead XX partner. You also may request at least one office hours per month with other partners of XX. This will be useful when you have specific asks that our partners can help with.
We'll often hold events around America (but primarily in NYC and SF to start). You'll have access to those too. We have some cool plans, but don't want to overpromise, so we'll keep them to ourselves until they are scheduled.
Of course! Having us as an advisor increases the odds of acceptance into one of our cohorts, assuming you've made progress on your startup.
Technically, yes. XX is new kind of "pre-seed" venture capital firm. The partners are experienced founders, most of which are part-time, who earn carried interest.
We want to band together hundreds of founders who want to pay it forward. When one of our partners personally invest as little as $1000 in a pre-seed founder, one of our funds will match it.
You'd be a good fit if you want to help earlier-stage founders get off the ground... because it's the right thing to do. We believe in paying it forward. We get fulfilled when we've made an impact. We often learn a lot of interesting things too.
You also can earn carried interest, like a VC, without having to raise your own fund. Plus, your personal capital goes farther. You can invest smaller amounts in more founders. When you personally invest, one of our funds will match it.
We wrote a blog post with more details.
As low as an hour a month. This is designed to work for even super busy founders who are currently running their startups. Every now and then, doing online AMA's, video office hours, or attending a fireside chat is super helpful.
This is also designed for flexibility. You can ramp up or down your time commitment as needed. At the higher end of the spectrum, you can commit to a three month tour of duty to run a cohort somewhere in the world.
You can sign up to the xx here. You can contribute to the community. We'll be in touch if we'd like to invite you to be a partner.
You must personally invest your own money in the startup, and get at least one xx manager to vet the deal and agree to go forward. The fund will then at least match your investment, and you will earn carry on this amount.
It has to be. If you bring a deal to XX, we will decide within 48 hours. If multiple xx partners invest, we will wrap up all the funds within one SPV, so the startup only has one entity on the cap table. We will collectively agree on one XX partner who is the lead investor and sole point of contact for the founder.
There are a few ways:
It's how a VC buys their yacht. Just kidding. Kind of.
Carried interest is the share of profits from an investment. Let's say the fund invest $100,000 in TheNextUber at a $10M valuation. Six years later, TheNextUber files for an IPO, and that stock is sold for $50.1M. The xx divides 15% carry. That is $7.5 million ($50,100,000 proceeds - 100,000 initial investment returned to investors * 15% carried interest).
Yes. Check out the Founder in Residence role.
Yes, if you are an accredited investor. We have multiple funds available to invest in, that match the personal investments of the xx partners. Each one has a different investing thesis. To see which funds are available, check them out here.
xx.team is operated by Wefunder Inc. Wefunder's fully-owned subsidiary, Wefunder Advisors LLC, manages the fund on your behalf. Wefunder Advisors is an exempt reporting investment advisor.
You can view Wefunder Advisor's track record. We have historically outperformed the median venture capital firm. We've invested in multiple startups at the seed stage, that are now valued at over several hundred million to a billion dollars, such as Checkr, Zenefits, Gingko Bioworks, Rappi, uBiome, Equipment Share, and ShipBob. In total, we've invested in 10% of Y Combinator's Top 100 companies.
We believe founders make the best early-stage investment decisions. At this stage, there is little data, and intuition from a lifetime of experience is the guide.
Experienced founders often see the best upcoming founders first, well before venture capitalists do, and are typically on the cutting edge of what is new.
Our funds follow-on when those founders make personal investments. Further, most often these founders are making a personal time commitment to help these startups succeed. We believe matching the wisdom of a group of experienced and well-connected founders will lead to better returns.
For a longer answer, there's a four-part blog article explaining why we created funds, and how we see them as different.
If a fund has greater than 250 investors, it is regulated as a full-fledged mutual fund, which would dramatically increase costs and make the fund impractical as an investment vehicle.
This is a 10 year venture capital fund. Investments in startups have a very long term horizon. It typically takes 3-10 years for a successful company to have a liquidity event, when it either gets acquired or has an IPO.
We disperse funds to investors when any company has a liquidity event, once per year on May 30th.
The Fund charges 20% carried interest and a 2% management fee. This is the standard fee for venture capital and private equity funds.
After you invest in the fund, there will be no further capital calls.
Yes, for 5 days.
No. This is not a mutual fund. All capital will be invested in private companies in long-term, illiquid investments.
Each fund is expected to make at least 10 investments. Most will make 20-50.
No. You can't opt out of any individual investment that the fund makes.
In many cases, yes. We expect most startups will want to raise more money than the fund provides. When this happens, we will give inside access to limited partners.
Most often between $10,000 and $25,000. We may invest up to $100,000.
We have pro-rata rights in almost all portfolio companies. This means that when a seed investment receives additional investment from a venture capitalist, we have the right to invest more to maintain our percentage ownership on the same terms. Since startup investments obey the power law, it's very important to double down on the winners to turbo-charge returns.
When a pro-rata opportunity exists, we will spin up a special-purpose-fund and give limited partners in the fund the opportunity to invest. We give first priority to those limited partners who invest $50,000 or more.
Here's a concrete example: in 2014, we invested $100,000 in Checkr's seed round. In 2015, Checkr raised $9M from Accel in a Series A. We gave an opportunity to limited partners to invest on those terms. Recently, Checkr raised $100,000 million Series C at a substantially higher valuation. To date, Checkr has a 34X cash on cash unrealized return.
We're not allowed to offer tax advice. You'll receive a single K-1 from each Fund each year. Your accountant can offer more specific advice.
Yes, if legal in your country. You should check with your lawyer and accountant.
Yes. We can accept investments in a Fund only from those who are an accredited investor. Unfortuantely, it is still illegal for unaccredited investors to invest in venture capital funds.
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