Common Questions
How do I apply for the Curriculum or the StartUp Extreme Program?
After receiving your request for an application for the Curriculum or StartUp Extreme Program, StartUp Academy will send you a general application questionnaire. After submitting this application and getting accepted, candidates will be asked to do a specific Admissions Test online. The cost is around 60 Euros. After your results come in, we will schedule a 15 minute Skype interview. Then you will either be accepted or put on a “finalist" List.
Accepted entrepreneurs for the curriculum have 5 days to pay €950 EUR Fee for the Curriculum and upload the signed Agreement in order to enroll.
Please note: The Curriculum Fee is FULLY REFUNDABLE during the first week of the curriculum, so that each entrepreneur can make an educated decision about participating in the program.
Accepted entrepreneurs for StartUp Extreme need to pay the whole coaching program upfront fee upfront and sign the Agreement before the first one-on-coaching class.
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Please note: the StartUp Extreme Fee is FULLY REFUNDABLE after the first session, so that each entrepreneur can make an educated decision about participating in the program.
What is the time commitment for the Curriculum required by an accepted entrepreneur?
The StartUp Academy requires a minimum of 15 hours of work per week. Participants are required to attend each 3 hour weekly session, complete weekly assignments and may even already work on first prototypes.
What is the time commitment for StartUp Extreme required by an accepted entrepreneur?
The StartUp Academy requires a minimum of 30 hours of work per week. Participants are required to attend each of the two 3 hour weekly sessions, to complete daily assignments, put a team together and work on prototypes.
How does the entrepreneur graduate from the Curriculum or StartUp Extreme?
The participant must attend all sessions, must complete all assignments, must incorporate as a company and must assign either 5% equity for Curriculum program or 15% for StartUp Extreme.
Please note:
StartUp Academy supports the activities and efforts of every entrepreneur. The overall goal for everybody is to succeed, but it is inevitable that some participants in the program are unable to graduate: for example, we had participants who gave up during the curriculum, because it was too overwhelming and too intense or they found out that they are better off as a Co-Founder joining another team. Whatever the reasons are, we encourage participants to not consider their leaving the program as a failure, but as one point in their growth process. We often have participants coming back as Co-Founders, which we almost always strongly recommend.
Do I need to attend every session?
Yes, every entrepreneur should attend every session, It is mandatory, even if the topic of that session seems to be of no relevance for the entrepreneur. However, we make exceptions on case to case basis, when for example participants have emergency business travel or illness that prevents them from attending one session in a semester.
Should all Co-Founders apply for the StartUp Academy program?
It really is up to the Co-Founder team, but StartUp Academy encourages all Co-Founders to apply. Each Co-Founder is required to take the Admissions Test and go through the admissions process. All accepted Co-Founders are supposed to enroll and remain in the program together in a team.
Are there other costs to being in the StartUp Academy program?
Entrepreneurs need to incorporate a company during the program, which will cost certain legal fees (UG is fine in the beginning, GmbH is recommended), and you may have other business expenses. StartUp Academy guides entrepreneurs through the process with the help of our legal mentors.
Will information from the application process be shared or made public?
The StartUp Academy will not reveal application information to the public. The results of the Admission Test and application processing are not shared with the applicant.
Ideas
Does the StartUp Academy focus on any particular business field?
The Institute supports any business, which is scalable. We like businesses who deal with health information systems, clean (energy) technology, hardware and consumer electronics. The StartUp Academy selects a wide range of Mentors to be sure that all relevant sectors are sufficiently covered.
Will participating entrepreneurs need to disclose their ideas?
No. If an entrepreneur is uncomfortable sharing an idea, then he is not required to disclose anything. All mentors, entrepreneurs, and participating staff are bound by confidentiality agreements. We strive to create a place of ‘save souls’, where everybody is encouraged to talk about challenges and giving advice in a climate of trust and positive energy.
Does StartUp Academy accept applicants with similar ideas?
Yes, that sometimes is possible. Anyhow, the StartUp Academy does not ask applicants to submit their specific business idea in the application process, since our focus is on developing you as an entrepreneur. In the past, entrepreneurs have shared ideas and collaborated accordingly. If an entrepreneur does not feel comfortable in the StartUp Academy group, he can leave the program after the first session (see above) and gets a 100% refund.
Can entrepreneurs submit more than one idea?
This is up to the entrepreneur, co-founders and/or team. StartUp Academy is more interested in the person as an entrepreneur, and less interested in the business idea. Nevertheless, the accepted entrepreneur must select one idea to turn into a company within the first 60 to 90 days of the program.
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Applications
When is a good time to apply to the StartUp Academy curriculum or StartUp Academy Extreme Program?
Entrepreneurs should apply for the Curriculum as soon as possible, because all applications are processed in the sequential order that they are received. We usually receive between 200 and 350 applications, but will only accept max. 30 participants into the Curriculum. In other words: Space is limited, so apply early.
We accept applications for the StartUp Academy Extreme Program any time the entrepreneur, his co-founders or his team feel they need to step up and get to the next level of their business development.
Can entrepreneurs apply if they have an established startup?
Definitely. The StartUp Academy accepts entrepreneurs who are running a business less than two years old with less than half a million in annual revenues.
How many Entrepreneurs are accepted into the Curriculum program?
The StartUp Academy accepts between 25 and 30 entrepreneurs into each program. The group size is limited for obvious reasons: the capacity of facilities, the ability to deliver a meaningful mentorship experience, and the quality of the shared equity among participants.
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Fees
What does the 50 EUR Application Fee cover?
The Application Fee covers the cost of processing the general Admissions Test, which is handled by a third party testing provider. The fee is non-refundable and needs to be paid online.
What does the 950 EUR Curriculum Fee cover?
The fee covers the cost of operating the sessions, including mentor travel costs, location fees, audio visual, guest speakers etc.
Please note:
The fee is FULLY REFUNDABLE during the first week of the curriculum, so that participants can see if the program is right for them.
Are there any other fees?
Enrolled entrepreneur who graduate in the Curriculum or the StartUp Academy Extreme program needs to contribute two additional fees. First, each entrepreneur in the Curriculum program needs to give 5% equity of their company to the StartUp Academy. Second, the enrolled entrepreneur pays a Tuition Fee of $4,500, but only if he get successfully funded with more than 50.000 Euros after graduating from the program in the following 24 months.
Please note:
Entrepreneurs and their teams, who enroll in the StartUp Extreme Program give 15% shares to the StartUp Academy's Shared Liquidity Pool.
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FAQ
STARTUP ACADEMY
Programm
Do entrepreneurs need to quit their day job, while participating in the Curriculum program?
No. The Curriculum program takes place once a week in the evening for 14 weeks. Entrepreneurs definitely do not need to quit their day jobs. The StartUp Academy usually welcomes a healthy mix of full-time and part-time entrepreneurs in the program. Many businesses get started with part-time (co-)founders until the company reaches a specific milestone or traction. The StartUp Academy expects that (co-) founders start working full-time, once a startup gets off the ground and starts capitalized through revenues or investment.
Can participating entrepreneurs or founders find co-founders in the program?
Yes. Participants in the Curriculum have usually shared areas of interest and come from a variety of backgrounds. It is quite common for entrepreneurs to form teams and to be established with different program participants. Mentors may even join as co-founders.
Why do some people leave the Curriculum program and do not graduate in the StartUp Academy?
Graduating from the StartUp Academy is challenging. First, only 30% of applicants are accepted to the program and only 30% of accepted entrepreneurs generally make it through the program to Graduation. In order to graduate, an entrepreneur needs to develop an inspiring idea for a company that is validated by the program mentors, plan out the business, work on an offering, incorporate the company, and complete all of the required assignments - all within a four month timeframe. Reasons for not graduating differ, but each entrepreneur who leaves is invited to a future semester, when they are ready to launch their business.
How do entrepreneurs get involved in the idea creation phase with the other participants?
In the beginning of the program, the entrepreneurs are put together into smaller working groups by related ideas. They are provided with specific assignments for refining, researching, and validating ideas.
What are the key points to succeed in the StartUp Academy program?
Each enrolled entrepreneur needs to unterstand, that the process of building a company is a lot harder than one usually expects. Maintaining focus combined with enthusiasm, passion, and enjoyment of pursuing the vision is crucial for success.
Investment
Can entrepreneurs apply who do not need funding or do not plan to raise money?
Yes. The StartUp Academy encourages all entrepreneurs to apply, who want to build a business. The majority of topics covered in the curriculum are relevant to any business, such as team building, vendors, and revenue. The StartUp Academy is working with 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 looking for investors or joined pitching rounds in general?
Yes. The StartUp Academy encourages active pitching and fundraising throughout the program. The goal is to get entrepreneurs in front of investors multiple times before the program ends.
How will entrepreneurs interact with investors?
At graduation, we will invite angel investors and venture capitalists to attend and contribute. At this investor session, you will be experienced and very well prepared to pitch. The StartUp Academy also facilitates investor meetings outside of the program with other partners.
Does the StartUp Academy make investments?
The StartUp Academy manages a small percentage in a company that is formed by an entrepreneur during the program. This provides the StartUp Academy with an option to buy more stock at a fair market price, and this price is set during the first qualified financing round that the company raises. The StartUp Academy distributes a part of the equity back to entrepreneurs and mentors. The remaining portion can be used by the StartUp Academy to participate in financings at fair market market value.
Does the entrepreneur have input into and veto power over the valuation?
The entrepreneurs will choose the investors, negotiate the terms, and sign the deal with assistance of, but no control from, the StartUp Academy. Everything is up to the founder (co-founders) and the shareholders.
Who is behind the StartUp Academy?
The StartUp Academy was founded by Kenneth & Christine Breeze, serial entrepreneurs and founding members of BreezEnergy, LLC. The idea for the StartUp Academy began in 2006 in the US, as a way to guide entrepreneurs to avoid common mistakes that lead to the failure of a business. That same year, Breeze Business Consulting was launched as an add on for one-on-one coaching sessions, building the curriculum the StartUp Academy offers now as a Curriculum program to groups or as a one-on-on StartUp Extreme Program to entrepreneurs.
Wrapping up an energy technology deal in Germany, the founders of StartUp Academy realized a huge pain in the local startup eco-system and shifted their plans to launch the Start Up Academy in an exciting area of Germany - Bremen and the Northern Part of Germany. Initially wanting to partner with an internationally renowned partner, Ken and Christine discovered strategic points that needed fine tuning specifically for the region, regulations and culture. They decided to start their StartUp Academy on their own, using their proven Application Process and Curriculum Program.
Mentors
What is the range of Mentor experience?
The Institute selects Mentors with a broad range of industry experiences, including hardware, software, manufacturing, biotech, 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.
If I drop out of the program or get dropped after the refund deadline, can I return to the next semester for free? Can I join a different location?
If you cannot finish the program for a personal reason or get dropped by the Founder Institute, you can join the next semester in the same location for free. If you want to join a future semester, in either your location or a different location, you will need to pay a small re-enrollment fee ($50), plus any difference in course fee. We will not refund any fees if the course fee for a future semester is lower.
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Equity/ Liquidity Pool
How does the Founder Institute's Liquidty Pool work, and what are the benefits?
Read the full explanation of our unique Shared Liquidity Pool at http://fi.co/liquidity_pool.
How does the allocation work?
Graduating founders allocate 3.5% of your company to the Founder Institute through the form of a Warrant or Option, and the Founder Institute then contractually allocates any money that is generated from the Warrants or Options to various stakeholders. The Founder Institute is your one official shareholder for easy corporate housekeeping, but the contractual allocation spreads returns from the Warrants or Options with others, allowing you have the benefit of multiple shareholders without the complexity.
How does the allocation work for Co-Founders?
Each Founder that contributes a company to the Shared Liquidity Pool receives an equal share of the 30% allocated to Founders. If there are 10 Founders in the Pool, then each Founder gets 1/10 of the Pool, or 3%. Co-Founders split their allocation. So, If there were 13 Founders contributing 10 companies, and one of 10 companies had three Co-Founders, then each Co-Founder would get 1%, while all other single Founders would get 3%. Since value in the Shared Liquidity Pool is derived from companies, shares in the Shared Liquidity Pool are allocated for each company contributed.
What are the potential returns?
Even in small acquisitions of $5 MM os less, the financial return from the Shared Liquidity Pool far exceeds the average Course Fee by multiple times. Below are four hypothetical situations where a Founder in the Shared Liquidity Pool sells their company for anywhere between $5 MM and $250 MM. The models assumes that the Shared Liquidity Pool will be diluted over time as the company gets larger and brings on investors, senior employees and partners. The model also assumes that there are 10 graduating Founders, each getting 1/10 of the Shared Liquidity Pool 30% allocation to Founders, or 3% each. Please note that Shared Liquidity Pool returns are paid out to individual Founders, not to their companies, so returns can be used for anything that you want, from paying rent to investing in your startup.
Exit Valuation$5,000,000$75,000,000$150,000,000$250,000,000
Warrant or Option Strike Price$1,000,000$2,500,000$2,500,000$2,500,000
Initial Liquidity Pool %3.50%3.50%3.50%3.50%
Dilution of Liquidity Pool %0%35%40%45%
Final Liquidity Pool %3.50%2.28%2.10%1.93%
Total Liquidity Pool Return$140,000$1,653,000$3,097,500$4,776,750
All Founders Liquidity Pool Return$42,000$495,900$929,250$1,433,025
Personal Liquidity Pool Return$4,200$49,590$92,925$143,302.50
How does a Founder join the Liquidity Pool?
When a Founder completes incorporation during the program by the deadline, they are invited to join the Shared Liquidity Pool. To join the Shared Liquidity Pool, Founders are asked to customize, sign and upload the appropriate paperwork, which varies from country to country. Normally, the paperwork is a Warrant or Option and a Board Consent. Founders that do not wish to join the Shared Liquidity Pool need to withdraw from the program before the last 45 days of the program.
How does the Liquidity Pool generate returns?
When a Founder in the Shared Liquidity Pool achieves a liquidity event by selling their business or by going public, the StartUp Academy distribute the proceeds to the stakeholders through the following process. The Founder notifies the Academy that there is an impending liquidity event, and the Academy will provide some strategic advice on closing the deal for the best terms. The Academy will also work quickly to provide any necessary signatures and approvals. When the transaction is completed and a payment is sent to the Academy, the Academy then takes the total return and divides it up by the contractual allocation, which is stored in our systems and checked by our accountants. Individual distribution checks are then cut for all of the stakeholders and mailed along with a nice letter. In the future, the Academy may switch to PayPal or another digital payment system of their choice for convenience.
Do I have to Join the Liquidity Pool to graduate?
Yes, it is a requirement for graduation.
How long does the Liquidity Pool last?
The Academy set a realistic timeframe for companies in the Liquidity Pool to achieve some type of liquidity event, such as a merger, a sale or a public offering. The vast majority of businesses will either fail or succeed within 10 years.
Why is the Liquidity Pool 3.5%?
The Institute analyzed multiple equity programs, and choose 3.5% as the smallest amount of equity to contribute that can still return reasonable value to the Liquidity Pool. As one example, setting up an advisory board normally requires 5% of a company to attract 5 or 6 advisors, and the Institute wanted to be less than 5% to attract over two dozen Mentors during the program. As another example, most funding incubators purchase approximately 10% of a company for approximately $20,000, and the Institute wanted to be less than half the equity for these type of programs. At 3.5%, Founders in the Liquidity Pool can get $100,000 in cash returns from low a nine figure exit.
Why does the Liquidity Pool use Warrants or Options, versus Equity?
The Institute holds Warrant or Options in the Liquidity Pool, versus holding equity, for two reasons.
First, Warrants or Options provide the right to purchase equity, and this means that the Institute is not an formal shareholder in your business today. By not being a shareholder, the Institute does not have information rights. The Institute is not a fiduciary. The Institute does not have a vote, and the Institute can not hold you up. The Institute has economic upside without the complexity of being a shareholder.
Second, by owning Warrants or Options, the Institute does not have to determine a valuation of your business. The strike price for the Warrants or Options are set by external investors. If you are unable to secure investors or you build a business without investors, then the strike price for the Warrants or Options is set at $1,000,000 USD. For example, if you build a fantastic business and a group of investors values the business at $10,000,000 USD in the first financing, then the strike price will be set at $10,000,000 USD. Until the company is purchased for more than $10,000,000 USD, then Warrants or Options will not be worth anything. By using Warrants or Options, we let the market decide your value.
How does investment work with the Warrant or Option?
There are two types of investments done by Founders, either a convertible investment or an equity investment. The Warrant or Option only matters with respect to a qualified equity investment, which is defined as any equity investment for $100,000 USD or more completed by external investors, people other than the Founder or Founders themselves.
When a Founder in the Liquidity Pool completes a qualified equity investment, the shares in the company are given a value by the outside investors. At this point, the strike price of the Warrant or Option is set. The number of shares of the Warrant or Option is also set at 3.5% of the company after the investment is complete. Hundreds of Founders have raised capital with the Founder Institute Warrant or Option in place. Most investors are used to investing in companies with Warrants or Options present
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Will the Institute buy the Warrant or Option?
The Academy does not intend to purchase the Warrant or Option until a liquidity event occurs with a greater value than the strike price, at which point the Institute will purchase the Warrant or Option to return value to the Liquidity Pool.
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