FAQ

Winter 2009 Seattle Area

If you have any other questions, please email apply -at- founderinstitute.com or use the feedback link at the bottom of this page.

Joining the Program

Will participating Founders need to disclose their ideas?
No. The Institute focuses on helping founders avoid common mistakes in building new businesses across multiple high-tech industries. If a Founder is uncomfortable sharing an idea, then the Founder is not required to disclose anything. All Mentors, Founders, and participating staff are bound by confidentiality provisions.

Do applicants have similar ideas to one another?
Yes. The Institute does not ask applicants to submit their specific business idea in the application process, since our focus is on developing you as a Founder. In past Semesters, Founders have shared ideas and collaborated accordingly. 

Does the Institute focus on any particular business field?
Our focus is high-tech, but this spans all businesses across IT, biotech, cleantech, and hardware. We always select a wide range of Mentors to be sure that all relevant technology sectors are sufficiently covered. The Institute will absolutely not push you towards any specific market or sector.

Can participating Founders find co-Founders in the program?
Yes. Since participants have shared areas of interest and hail from a variety of backgrounds, it is common for founding teams to be established with different program participants. In one case a Mentor even joined one of our companies as a Co-Founder. 

What is the range of Mentor experience?
We aim to secure Mentors with a broad range of industry experiences, including hardware, software, manufacturing, bio-tech, entertainment, digital media, investment, services, and B2B/B2C. Most Mentors have started multiple companies and are currently running a well-known startup. The Mentors were chosen for their ability to speak on a specific set of important business issues that affect all high-tech startups.

How do Founders get paired with Mentors?
The pairing process is informal. Founders have the opportunity to ask questions of Mentors before, during, and after each session both online and in-person. While some Mentors are extremely busy, it is expected that the majority of Mentors will help Founders where they have common interests. The Mentors are compensated through a shared upside pool, and Mentor compensation increases with positive reviews from participating Founders. This gives Mentors the extra incentive to help the Founders, provide introductions, etc. In addition, a final review is done after the program is completed, creating an incentive for longer term Mentor involvement.

What is the time commitment required by a Founder?
Participating Founders are required to attend each three and a half hour weekly session. The sessions will have between five and ten hours of assignment work that needs to be completed before the following session. If a participating Founder is also working on a prototype or some other aspect of the business, then the time commitment can be much greater.

How does a Founder graduate from the program?
Towards the end of the program during the week of Incorporation, participating Founders will be invited to participate in the shared warrant pool. The invitation and acceptance by a Founder to participate in the pool is certification that the Founder has graduated. The Institute aims to certify that companies built by Founders during the program have met the highest startup standards. These standards include that the companies have been well thought out, that they have a sound model, that they have been set-up correctly, and that they have the best infrastructure. The certification reduces that amount of diligence that interested investors need to undertake to engage with a company.

How will Founders interact with investors?
In three sessions throughout the Semester, top rated angel investors and venture capitalists will be invited to attend and contribute. Founders will have the opportunity to informally socialize and pitch investors during these sessions without the stress and pressures of a pitch environment – garnering invaluable experience feedback without the fear of backlash. By the third and final investor session, you will be experienced and very well prepared to pitch. In past investor sessions, over 35 venture capital companies have been represented, with additional angel investors. The Institute also facilitates investor meetings outside of the program.

Are investors turned off by the Class F stock and warrant pool?
Some are, yes, and others are not. Only the best teams and the best companies will receive financing in the current economic climate, and these strong opportunities will be able to push for better terms. The Institute aims to foster the best, and that is reflected in the terms. The Institute does not mandate that companies use the documents nor that the Founders participate in the warrant pool. 

What does the $600 course fee cover?
The course fee helps to subsidize the session operating costs, including audio-visual, videotaping, catering, location fees, part-time staffing, and other expenses. The fee also helps to cover the costs of operating the online curriculum and information systems.

Who is funding the institute?
The Institute is funded by Adeo Ressi, a serial entrepreneur and Founding Member of TheFunded, Incorporated. The idea for the Institute began in January, 2009, as a way to help Founders avoid common mistakes that lead to the failure of a business. In February, Topicki was launched as an interactive curriculum builder for the sessions, and hundreds of CEOs contributed ideas on what Founders need to know. On March 3rd, the story was leaked to TechCrunch, forcing the Institute to move quickly on plans. The company was incorporated on April 16th, 2009, using the same documents offered to the public and to the participating Founders one day before accepting applications.

Applications

Is it better to apply sooner rather than later to the Institute?
Yes. All applications are processed in the sequential order that they are received. If you apply before the early admission deadline, you will have two separate chances to be admitted into the program. Space is limited, so apply early.

Do I need to attend all sessions in person?
Yes. However, it is understood that founders may have important business travel or illness that prevents them from attending one or two sessions in a semester. The Institute makes exceptions on a case by case basis. In addition, all sessions are professionally recorded and available online for future use. 

Can I apply if I have an established startup?
Yes. The Institute will accept any founder that is running a business less than a couple of years old with less than one million in annual revenues, as a general rule of thumb. The first semester of the Founder Institute included founders with a wide range of experiences. 20% of the 54 companies that graduated from the inaugural semester were already incorporated at the beginning of the program. Some of the founders had nearly complete products with sizable partners.

How many founders will be in the program?
The Institute plans to accept up to 75 Founders. A number of factors encourage limiting the group size, such as the capacity of reserved meeting facilities, the ability to deliver a meaningful mentorship experience, and the quality of the shared upside among participants.

Can multiple co-founders apply?
Yes. However, we recommend limiting the number of co-founders in the program to three.

I applied, but did not receive an email response. Did you get my application?
Yes. After you successfully apply, you will be logged into the Founder Institute site. On the right hand side, it should say: "Semester: Winter 2009 Seattle Area, Role: Founder, Status: Applied." This indicates that your application has gone through. As the Institute processes applications, your status will change to "Reviewing," "Accepted," or "Rejected." The Institute will email you with your application status once it changes.

Will information from the application process be made public?
All information provided during the application process will remain confidential until the Founder chooses to reveal it.

Will you be taking any initial money for the sessions from the Founders?
The Institute charges a $50 application fee to cover the cost of background and reference checks, and a $600 fee for students who are accepted and ultimately enroll in the program to help defray the cost of the class.

Do Founders need to quit their day job?
No. The Institute expects a mix of full-time and part-time Founders in the program. Many businesses get started with part-time Founders until the company gains traction.  Once a company gets off the ground and properly capitalized through revenues or investment, the Institute expects that the Founders will start working full-time.

Can founders submit more than one idea?
This is up to you - but at this phase of the application process, the Institute is more interested in the person, and less interested in the business idea. We will train you to evaluate business opportunities and you can decide on your final idea during the program.

Differentiation

How are you different than an incubator, such as YCombinator?

• The Institute does not encourage Founders to quit their day job, put their livelihood at risk, or live on reduced incomes by the Founder Institute - unlike other incubators. We don't force you to re-locate either.
• The Institute focuses on the Founder, not the idea. We take high-potential individuals and train them to properly evaluate opportunities and become disciplined company founders.
• 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 participating Founders and Mentors in the program, creating a pool of shared value for everyone involved.
• 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 - versus one major demo day at the end of the program.
• The Institute creates a collaborative, teamwork-oriented environment, versus the competitive environment found in traditional incubators.

Process

Who is behind the Founder Institute?
The Founder Institute, Incorporated, is a Delaware C corporation formed on April 16th, 2009, by Adeo Ressi. Adeo currently heads the Institute, while also being Founding Member of TheFunded.com. The Institute is the eighth business that Adeo has founded, starting with Total New York in 1994, which later was sold to AOL becoming Digital Cities. Adeo has been involved in founding companies across digital media, strategic consulting, video games, and space exploration.

Who is FounderWise?
FounderWise is the local partner of the Founder Institute, established to operate the Institute in Seattle.  FounderWise is a founder-centric resource for simplifying the process of founding a successful startup, focusing on training entrepreneurs and establishing an extensive library of original and compiled startup resources.

Who is behind FounderWise?
FounderWise was created by Chris Early, who most recently was the general manager for Windows Gaming Technology at Microsoft.  FounderWise is Chris' fourth startup, all in high-tech fields ranging from computer hardware to video game services to entrepreneurism.  So far, with these startups, Chris has experienced one sale, one flame-out, and one IPO.

How will you get involved in the idea creation phase with the entrepreneurs?
In the beginning of the program, the Founders will be broken into smaller working groups by related ideas, and provided with very specific assignments for refining, researching, and validating ideas.

From having a great idea to taking it to the market successfully, what do you think is the most difficult part of the process for a young entrepreneur?
The hardest challenge for a founder is understanding and completing all of the various things that need to get done to launch a company in a logical and orderly manner. Finishing a prototype and product is just one of many important steps, and founders often overlook critical details which come back to haunt them later.

What are the key steps to succeed in this process?
The process of building your company will be a lot harder than you ever expected.  Maintaining your enthusiasm, passion, and enjoyment of pursuing your vision is paramount.

What if I have more questions?
Should you have questions about the program, you can email the local Seattle chapter at founderwise -at- founderwise -dot- com.

Investment

Can I apply if I am not planning to raise money?
Yes. The Institute encourages Founders with standalone business ideas that are capital efficient to apply. The majority of topics covered in the curriculum are relevant to any business, such as team building, vendors, and revenue. The Institute is working with more than two dozen partners on discounted or free offerings to dramatically reduce the cost of launching a new company, making enrollment worthwhile.

Can I apply if I am already fundraising?
Yes. The Institute encourages active fundraising throughout the Semester for Founders that are prepared and require outside capital. The goal is to get Founders in front of investors multiple times before the Semester ends.

How much money should participating Founders plan on raising?
That depends. The Institute invites a wide range of Founders from different sectors to apply. Some companies need more capital and will raise more capital during the program. The amount of money that a participating Founder can expect to raise is ultimately based on the business, its specific needs, and the execution.

Does the Institute make investments?
The Institute takes a small percentage (3.5%) of warrants in a company that is formed by a Founder during the program. Warrants provide the Institute with an option to buy stock at a fair market price, and this price is set during the first qualified financing round that the company raises. The Institute distributes the majority of the value generated from the warrants back to program, Founders and Mentors. The remaining portion of the warrants can be used by the Institute to participate in financings at fair market value.

Why warrants?
(1) Successful founders from incubators often feel that they receive bad investment terms from the incubator. Warrants ensure that any purchased equity by the Institute is priced fairly by the market, creating a win-win scenario.
(2) The Institute will work to ensure that the majority of companies will receive necessary seed or angel funding at a rate determined by the market for a proper launch before the program is completed.
The Institute’s formalized mentor program with structured deliverables will create world-class companies. There is upside in the warrants, but that is not the endgame. The goal is to help create a large number of great companies.

What is the Institute involvement with TheFunded.com?
The Institute is a separate company from TheFunded, Incorporated. The Institute leverages a close working relationship with TheFunded.com to help recruit world-class mentors and identify the optimal investors.

How confident are you that there will be a steady line of investors lined up behind the Institute?
TheFunded.com is a respected thought-leader in the startup investment space. And, the best rated investors on TheFunded.com - arguably the best investors to have in a company - appreciate TheFunded.com. At a recent event to celebrate these top-rated investors, TheFunded.com had a very strong turnout. See details on the event and names of some attendees here. Nonetheless, there is a risk that some investors frustrated by TheFunded.com will not want to consider an investment in companies that are part of the Institute.

Does the entrepreneur have input into and veto power over the valuation?
The founders choose the investors, negotiate the terms, and sign the deal with assistance of, but no control from, the Founder Institute. Everything is up to the founder and the shareholders. Keep in mind that the Founder Institute will not be a shareholder of any kind pre-funding.