Investor Friendly Structure
Founder Equity is a non-traditional fund with no fees and other investor-friendly characteristics.
Founder Equity is a better model for everyone
Founder Equity’s structure is designed to be superior for all parties involved: fund investors, company founders, company acquirers, and the general partners of the fund.
Founder Equity takes advantage of structural dislocations by investing earlier to benefit from irrationally low valuations. We inject our large team of in-house engineers, designers, and marketers to increase velocity. Our goal is to quickly prove working business models and begin scaling in preparation for sale to strategic acquirers at a stage when valuations tend to be inflated.
No fees and a clear alignment of interest with our LPs
We charge no management fees; general partners make no returns until our investments achieve liquidity. The Founder Equity partners also have a significant portion of the capital at risk—over 30% as of Fall 2016.
A superior model for entrepreneurs, too
Entrepreneurs receive capital when they actually need it. They are not forced to spend 10 years building a high-risk business on a lottery chance to take it public or sell for a billion dollars; they can quickly make a life changing exit and go on to their next project.
Outsized potential rates of return
Because we straddle the most important delta point in terms of value creation (transitioning to certainty in the business model), we participate in the fastest rate of value creation. Because we invest heavily (and actively) so early, we maximize the impact. And injecting our team both reduces risk and increases velocity. All of this is why we predict such high IRRs (Internal Rates of Return)—typically in excess of 150% for each investment.
Discover a better way to start up
Discover a radically different approach to building and investing in early stage digital businesses
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