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While most of these seem reasonable learnings, some of them still show major holes in understanding. For instance: "Within the first couple of years, we rea
by ig1 13y ago
While most of these seem reasonable learnings, some of them still show major holes in understanding. For instance:
"Within the first couple of years, we realized that,
on average, any exit required between 5 and 7 years
to be worthwhile, longer than the average time we’d
hoped and planned for. This stands in sharp contrast
to the US, where exits commonly happen within a year
due to talent acquisition hires."
Even a decade ago anyone could tell you that an startup will typically take 7+ years to IPO or make a decent size trade exits (Seven year is the generally accepted median time to exit for a US VC funded startup). They seem to be confusing "real" exits with talent acquisitions, most talent acquisitions rarely involve a significant amount of money being returned to investor. Almost never at the 10x+ levels that most funds are looking for.
Also missing from the discussion is the fact that they took a massive 27% in equity for a tiny investment which meant that many talented founders wouldn't even consider touching it. As the accelerator market has become more competitive taking that kind of equity is unviable even for below-average startups.
- jackgavigan 13y ago> ..they took a massive 27% in equity for a tiny investment... Their website implies - at http://hackfwd.com/dilution http://hackfwd.com/dilution - that they invest a substantial amount, ranging from €91,000 for a single founder to €191,000 for three founders (although another document - http://hackfwd.s3.amazonaws.com/system/documents/4bd586/e2e8b66c7c32000034/hackfwd_offering_overview_final.pdf http://hackfwd.s3.amazonaws.com/system/documents/4bd586/e2e8... - says that they invest "up to" these amounts). It would be interesting to hear from some actual HackFWD alumni how much they actually invested. EDIT: If they did actually invest those amounts, taking 27% in equity would not be unreasonable. If, however, they were invoking the "up to" qualifier and offering to invest much smaller amounts in return for the same amount of equity, then that would raise a question mark.
- mikk0j 13y agoIt wasn't "up to". It was those amounts stated in the docs, using only the number of founders (from one to three) as the proxy.
- michuk 13y agoJust as Mikko hinted, most startups took 191k for 27% of shares. The thing to remember is that HackFwd gets diluted in next rounds together with the founders, there are no anti-dilution clauses in Geek Agreement (which is public, btw).