How much funding do companies in the Jumpstart Foundry program receive?
You’ll receive $15,000 in seed funding. We’ve proven that this is plenty of money to survive for three months and to crank out a substantial prototype so you can get to the next level. You also get a nice workspace, legal services and all the perks of the Global Accelerator Network andF6S — totalling somewhere around $500K in potential benefits. Finally, you’ll receive immeasurable value in the connections and advice that you’ll receive when you start your company with Jumpstart Foundry, and also in the opportunity to pitch to angel investors and venture capitalists in small groups throughout the program and in grand fashion at the end of the program during our Investor Day showcase (attended by 400-500 angels and VCs).
How much equity do you take?
Jumpstart Foundry receives a 6% founder’s stake in your company and an additional 4% is reserved for your company to allocate to your equity mentors who will continue on your advisor board after the completion of the program. Our mentors put in at least five hours of work per week in order to qualify for the position. We believe we have the most intensive mentor training and involvement program in the industry and this equity arrangement helps preserve that level of quality.
You take more equity than some of the other accelerators to which we’ve applied. Why should we pick yours?
Our program design works to your benefit because we create an environment of dedicated mentor commitments. If you complete our program with discipline and diligence the up valuation you will receive on your next raise will more than offset the 10% dilution. This isn’t just a class. We’re committed to your long term success. We believe that the best mentors will not spend their time totally for free. The 4% for equity mentors is a small, symbolic compensation our companies provide for the many hours of work put in by their mentors. Yes, many programs offer more money or take less equity, but you get what you pay for. We offer very strong mentors who will open doors for you, advance your product and help build your company. In return they’ll realize a small amount of the value they helped to create through the 4%. In short, if your goal is to own the most equity possible then maybe JSF isn’t the best fit for you. However, if your goal is to build a large, important company and make substantial cashflow very quickly then maybe it is.
What sorts of companies do you fund?
We look primarily for tech-inspired companies, typically web-based, mobile application or other software driven, focusing on the areas of healthcare IT, data services or social engagement tools. Nashville’s standing within the healthcare community makes the city a hotbed for opportunity in that field, and the need for improved data systems services and the next big social engagement tool will always exist. We’re also looking for companies that can have national or worldwide reach. Specifically, we don’t fund medical device companies that require FDA approval, biotechnology companies, restaurants, consultancies, or other local service oriented companies.
Who’s behind the program and why are you doing this?
Jumpstart Foundry grew out of a group of investors gathering together in 2010, and funding seven different companies, one at a time, over the course of the year. As we looked around the micro-fund landscape and saw the success other firms were having with the cohort learning model, notably our friends and now partners at TechStars (now Global Accelerator Network), we adopted that model and focused it on the three areas listed above — healthcare IT, data systems and social engagement tools.
Why does Jumpstart Foundry need and want stock in my new company?
Like you, we’re entrepreneurs. We think that the value of the learning, networking, and coaching provided by the program is of tremendous value. The Jumpstart Foundry program will provide you with the healthiest possible start and greatly improve your chances for success and sustainability. Once we invest, we’re motivated to help you succeed by introducing you to people who can help, assisting you with strategy, finding more investors, and generally helping you to succeed. That’s a good deal for both of us.
Do I have to be there for the entire summer?
No. It’s your company so you can come and go as you see fit, but we do require that you be primarily based here during the program. This benefits you because you can take advantage of the numerous learning opportunities, networking and coaching that will be provided. The Jumpstart Foundry is a major commitment, and we expect you to be around most of the time.
Do I have to stay in Nashville when The Jumpstart Foundry program ends?
No. It’s your company, so you’ll live where you want to. However, we think you’ll find Nashville to be both an excellent platform from which tolaunch your business, and a terrific place to live and work.
How can we get funded after The Jumpstart Foundry ends?
We provide the seed funding to get you going, but you may well need more funding to really make it. Near the end of the 14-week program, we’ll organize an Investor Day where angel investors and venture capitalists from all over the country will check out your technology and listen to your pitch. We’ll coach you so you’re as effective as possible, and do everything we can do help get you follow on funding. We may also fund your company further ourselves in some situations.
What if my company doesn’t ultimately succeed?
65% of the companies that finish the program do succeed, which gives you pretty good odds, but if you don’t we think it’s important that you tried. Because not just anyone is accepted into the The Jumpstart Foundry program, you’ll have an impressive resume item for your next gig that will look way better than almost anything else you could have spent your time doing. And you will have met a large number of smart and well connected people who can help you tremendously with whatever you do next. Hopefully that will be another startup.
What sort of control am I giving up by granting equity to Jumpstart Foundry?
Jumpstart Foundry wants to be viewed as a co-founder. We expect to have all the same rights as any other founder, relative to our minority ownership position. In a nutshell, we don’t want any special or controlling interests in your company. We won’t ask for a board seat or for any uncommon investor rights. You will still run the show.
I’m a single founder. Can I get accepted into The Jumpstart Foundry, or do you only look for teams?
While we don’t screen applications just because they have a single founder, it does make things more difficult. We look for great, balanced teams who have a full range of skills. We strongly advise you to seek co-founders who balance your skillset. For example, if you’re a strong developer, you might consider adding someone with business and/or marketing experience. If you’re a great business evangelist with no developer, it’s very unlikely we’ll accept you into the program, so go find a rockstar developer/technical founder to join you.
Where will we live while we’re there?
Jumpstart Foundry arranges subsidized shared apartments for teams that need them (or just don’t want to live elsewhere), many of which will be within walking distance of the Entrepreneur Center where we run the program. Your team will allocate $1,000 per month of your $15,000 investment (or your own funds) toward the rental of the apartments. Typically this is up to an 80% discount from market rates, the rest of which JSF picks up for you as a contribution to your success. Of course, you can choose to live elsewhere on your own terms. Nashville has a number of compelling neighborhoods to explore. The rigor of the program doesn’t leave a lot of time for commuting so we try to fill that gap for you. When you want to cut loose you’ll be walking distance from downtown Nashville’s amazing music scene.
How do you choose which companies to accept into The Jumpstart Foundry program and to fund?
We will choose great founders who are proposing products that solve real problems or create meaningful innovations. For us, it’s about the team. Because of this reason, we’re less likely to accept single founder companies. The best things you can do to strengthen your application are: (1) Round out your team with business, technical, and other necessary skills. (2) Make progress on your prototype or product and reference it in the application. And (3) Show us you’ve really thought about your business and have gotten off your butt to do something about it.
Do I need to send in a business plan? No. Just fill out the online application – that’s all you need to do for us. In fact, we probably don’t want to see your business plan if you have one. We do ask some pointed questions and provide several opportunities to submit videos. It’s probably best if you read the full application before starting it.
When is the deadline to apply and what’s the overall timeline?
The deadline for applications is April 2, 2013. The program starts May 19 and ends August 23.
If you apply early enough, we may invite you to attend JSF for a Day, space permitting. This is not a required step, but it can be a great way to learn more about the Jumpstart Foundry program (and Jumpstart Foundry in general) and for us to get to know each other better before the evaluation stage.
What will a typical day be like for a founder working through The Jumpstart Foundry program?
It’s your company, so you’ll be hard at work on your product. You can choose to work out of the Entrepreneur Center if you’d like, or you can work anywhere else that you might prefer. About two or three days per week we’ll organize informal educational sessions with our staff and mentors. We also expect many of the mentors to drop in to Jumpstart Foundry at various times throughout the program. In general, you’ll be working on your product each day, just like all of the other founders in the program. We don’t tell you what to do or when (outside of certain required deliverables), and we create an environment that is conducive to helping your startup every day.
Can I apply if I’m not from the United States?
Yes. As long as you and your team can be in the USA legally for the duration of the 14-week program, please do.
Is my company too early (or late) stage to apply to The Jumpstart Foundry?
Almost nothing is too early. One of the great things about Jumpstart Foundry is that we help you refine your idea and business model. Likewise, no company is too far along to apply (but you may not have raised additional capital from non-founders). In fact, we have large, mature corporations that send startup teams as part of our Innovation Challenge programs.
I’m concerned that if I apply, you won’t protect my intellectual property. Should I be worried about this?
We’re not in the business of stealing ideas, and we won’t show your application to anyone outside of Jumpstart Foundry. Each year, we see hundreds of applications and many of them include similar ideas. For this and other practical reasons, please don’t ask us to sign an NDA. Our application does not ask for your “secret sauce,” and there is no reason you have to disclose this to us if you’re not comfortable doing so.
My team outsources software development. Are we still qualified to apply?
Yes, but with some caveats. We have found that it’s extremely difficult to work iterate your product fast enough without your dev team, or at least it’s leadership, resident at JSF. It’s possible, but it’s challenging, so if you want to take this route please convince us with compelling proof that you’ll be able to have near-immediate access to your remote team. Typical JSF startups pivot their products and businesses 4-5 times in the first few months. Doing so puts a lot of strain on development resources, especially if you are paying them for each change. We think it’s best not to outsource what you are, but it obviously works in some cases. We’re happy to consider any application. Just remember that we’re primarily focused on the team.