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FounderPool — De-Risking startup founders by pooling equity
Pool your startup equity with inspiring, VC-backed founders vested in your success. Diversify your financial risk and increase your odds of an exit. FounderPool is your go-to resource for Investor Intros, Hiring Referrals, Growth Advice, Partnerships & more.
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@syedaliahmed Hi Ali, 1. The numbers alone are for mitigating downside risk. In the case you described, if you assume there are ~20 companies in the pool, the returns are $1.5M per participant, but more than that, the value the network delivers over time will increase the odds of success of everyone. Even after cap gains, it is still $1.2M
2. We are finding that realism and optimism are the two simultaneous states many impressive founders share. It is almost a quantum state of mind.
@datarade Was writing about how startup landscape is changing and how startups have become more dependent on luck. Do you agree the distribution channels are getting increasingly crowded?
The Yac team did the first round robin on FounderPool and met a lot of really cool startups here. The team at FounderPool is super receptive to feedback and I'm excited to see where this goes.
@mrandydavis Thank you Andy. Would love to create a pool for your portfolio. Please pick a time that works for you: calendly.com/founderpool
From the FAQ "Every founder in a pool allocates equity that amounts to the same dollar value to the pool, however, the amount of shares maybe different based on the valuation and number of outstanding shares" ... does this mean to participate the companies need to have a recent priced round? If not, are there other ways you determine that everybody is contributing "the same dollar amount" of equity?
@tylertringas Yes, either a 409A or price from the funding round within the last 3 months is used for pricing.
Cool idea? Why limit it to Founders, though? Any shareholder could contribute to a pool based on the last valuation of the shares. And de-risk.
@vladdione Yes, we do have early stage employees participating in pools. For effective execution, we focused our marketing on under served market, founders. We hope to expand this to other areas in the future.
Love this idea. Cant wait to see how big you take this! You have my full support ?makers
@tomaspaulo We are stage agnostic and have pool members from seed to unicorn status. However to date we have screened for funded companies to ensure there is a valuation. Selection is based on other founder rankings.
@tomaspaulo When we started out, we assumed only pre-seed/seed companies would apply. Turns out we've had applications from companies as far along as SERIES D. A few applicants have raised 9-figures.
When are members ejected out of the pool? When a pool is filled with dead or sold companies, new members have to share profits with them, meaning a pool becomes less attractive. I assume there is a chasm between the deprecation of an existing pool and the formation of a fresh one, where either one can seem more or less attractive than they should be.
... just read that FounderPool allocates applicants to pools based on scores.
I guess the question that remains is, how you govern pool formation.
I would also like to know if applicants can view existing pools or just the pool suggested to them.
@hurty_ pools are rolling, meaning a majority of members can invite new companies into an existing pool. There is no elimination once a company is in the pool, it is based on shared risk and so selection is the most important part of the step. We facilitate transparency and metrics and meeting, for founders to evaluate other founders.
?makers
> San Francisco and Silicon Valley account for 13.5% of global startup deals.
.so.
?> Are there certain tools you find essential to reach these Founders during this difficult season? Assuming Founders are sharing non-disclosable(NDA) details within communications with the equity pool do you see security is in great question given the failures of newer softwares like zZoom, are you looking at something more like Jitsi(https://www.producthunt.com/post...) to deliver to Founders this equity pool over the wire?
@mrdignitty Well said! We build communities for the rest of the world but there isn't a great community for founders. We hope to fix that.
?makers
Startups, 70% won’t live to see their 10th birthday.
Should show how the 70% is decreasing towards success because of FounderPool investment, how many pivot based on FounderPool invest, and how many acquisitions happen tracing back to FounderPool invest
If 70% of startups invest in FounderPool how many of them live past 10yr ROI?
Only time will tell
@mrdignitty Great questions all. We will get the data as the process goes on
Fascinating concept, and one I've actually looked at implementing several times at firms where we had a large network of portfolio companies who worked closely together. Interested to see if this takes off!
@melt_dem Thank you Meltem. Our goal is to reduce friction in this process of pooling while maintaining the quality of founders participating in pools.
Very cool! This seems pretty useful! I have some questions:
1. Do you plan to have a demo day and help connect startups in pools to investors?
2. What is the minimum amount a company needs to raise to be considered?
3. How many companies per pool?
4. How much equity do companies typically give into a pool?
@brandon_goldman 1. Great question. We are not an incubator or a fund and we don't do demo days. We will help all founders with connections and investor intros as much as we can, if needed. But the bigger network is the investors in other founders in the pool. We make it easy to share investor pipelines. 2. There is no minimum, but so far, companies have at least raised a seed round from notable investors 3. Depends on the pool composition. Early stage pools will have more, we are targeting ~30-40/peool. Later stage ones have less per pool. There is a crossover as well. 4. We target 5% of Founders' vested equity, so that it provides a meaningful diversification and moves the needle for them when an exit happens in their pool
@brandon_goldman @chandraduggirala regarding 2., what if the startup is self-funded?
Perhaps traction can justify a plunge in the pool?
@brandon_goldman @hurty_ That is a great question. We are working on pooling equity for self funded startups based on metrics other than funding rounds. More to come soon...
Congrats on launching a new type of launchpad for founders! Diversification and derisking are important parts of investing + entrepreneurship, I’m glad FounderPool creates this superset PLUS the potential social outlet for those who lack it from being overworked.
Some pondering questions:
- What are the plans for scaling when there are hundreds of applicants?
- How would founders be matched?
- Who will lead the cohort pools and how are the numbers/terms determined for each cohort?
- Is there a governance structure for each cohort?
@rightlung Thank you Victor.
- We are creating a self serve platform, that makes it super fast and easy to form self selecting founders to join pools on their own.
- Matching is based on preferences, stage and other factors, but each founder makes the decision to partner or not with companies.
- Terms are standardized and we take care of pool formation when a minimum threshold is reached
- Currently we manage each pool (fund), to take away burden from busy founders
Many people have talked about exploring this but it hasn't taken off (yet!). I'm curious if something's changed that makes this more likely to succeed now, @george_burke, @chandraduggirala, @manoj_duggirala?
@george_burke @manoj_duggirala @rrhoover Great question. 1. The density of the network. More startups now than 10 years ago, but also much more deeply connected. 2. Startups have become more luck dependent (wrote about it here: https://medium.com/@csentropy/2-...) 3. The perception of luck and uncertainty as factors in startup success is increasing amongst founders from our own surveys. We think together they suggest a tipping point.
More impoirtantly, these informal networks like the paypal mafia have existed before. Our goal is to build the infrastructure for that strong network formally and for everyone.
Robomart