About

Spring 2010 Los Angeles

The Benefits:

The Founder Institute strives to reduce the cost and increase the quality of starting a technology company. The Institute offers each participating Founder five benefits:

• Camaraderie: All graduating Founders share in the equity upside of each other's companies, creating a powerful peer support network by aligning incentives.
• Training: Participating Founders go through a four-month curriculum of weekly business-building sessions developed with feedback from hundreds of established CEOs and Mentors.
• Mentorship: Successful startup CEOs and founders spend four hours per week with Founders in the program and help build you business by answering questions through email.
• Investment: Founders are introduced to local angels and venture capitalists in three "investor sessions," where Founders can secure fair market value for their company in a low-pressure environment.
• Services: The Institute partners with leading local, national and global service providers to provide free or discounted offers, reducing the cost of starting a business by 80% or more.

Founders that graduate are certified as having gone through a valuable company-building program that is recognized by an increasing number of partners and investors as a significant achievement. Unlike competative programs, service providers are not invited to participate in the curriculum. All aspects of Institute are designed to be 'founder-friendly,' encouraging founders to help other founders succeed.

The motto of the Institute is "Leave no Founder Behind!" 

The Model:

Our Founder-centric philosophy is reflected in the Institute's economic model. The Institute keeps costs low, bets on the success of the companies created, and shares in the returns.

• First, Founders pay a $50 Application Fee to cover the costs of reviewing and testing the prospective entrepreneurs.
• Next, Founders accepted into the program contribute a $600 Course Fee to cover location fees, catering, mentor travel, and other expenses of running a 16 week program. The Course Fee is calculated by dividing costs by the expected number of accepted Founders.
• Third, if a Founder graduates from the program, they are asked to contribute warrants for 3.5% of their company priced at fair market value into a Bonus Pool that is shared between the other Founders, the Mentors, the local operators, and the Institute. 30% of the Bonus Pool returns goes right back to the Founders themselves, allowing each graduate to earn returns based on the success of their peers. Enrolled Founders can drop out at any time and avoid joining the Bonus Pool.
• Lastly, if a company is successful and receives financing from third parties, the Institute asks that the company pay a one time Tuition of $4,500, which supplies the operating capital for the Institute. The success of the Institute is based on the success of the graduates, as it should be.

The Institute is designed from the ground up to be unique. Our focus is in developing high-potential individuals into disciplined company founders. We also don’t try to make ‘below market’ investments at a premature stage, or create a competitive environment, like traditional incubators.

In short, it’s a simple philosophy: we are Founder-centric.

The Difference:

Here are some other ways that the Institute is different:

• The Institute does not encourage Founders to quit their day job, put their livelihood at risk, or live on reduced incomes - unlike other incubators.
• The Institute focuses Founders on critical company-building assignments that will directly benefit the resulting businesses.
• The Institute mentors Founders to complete the company-building assignments at a fraction of the traditional cost, and at a high quality level.
• The Institute works to protect the equity and value created by the Founders first and foremost - versus protecting the interest of the investors or the incubator.
• The Institute shares upside from all participating Founders and Mentors in the program, creating a pool of shared value for everyone involved. When one of the participating companies does well, everybody benefits. And when the Institute's Mentors help the participating companies, they share in the upside as well.
• The Institute helps Founders secure investment at market rates and under the best possible terms - instead of forcing a valuation or equity purchase at a premature stage.
• The Institute sets up regular meetings with investors and the public throughout the company-building process - versus one major demo day at the end of the program, like other incubators.

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. Start-up 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.