(Part 5 of the Founder Briefing Series)
Let’s begin with the end in mind.
The Goal is a Successful Business
It may sound strange after all this business talk, but our ultimate duty is to society. Everything we do is in service of the customer – in aggregate, “the market”. Your business offers its customers a new, better, way of doing things, something empowering or revolutionary that satisfies unmet demands and, in so doing, changes the world. And we know that customers value your innovation because they are wiling to pay for it.
Accordingly, everything that JFDI does to serve your startup, is predicated on your startup serving the customer.
Let’s take a deep look at venture funding from first principles.
Form follows function. There exists a Platonic ideal to which your business aspires. If fed and watered appropriately, it will grow large enough to serve the biggest possible market.
Some businesses grow organically to reach that potential through bootstrapping.
Some business require venture funding. (See Spolsky.)
Most startups that come through JFDI are the latter kind.
The Path of Venture Funding
We filter for teams and ideas which are high-growth, high-impact, high-potential – which often means venture-fundable. JFDI is mini-venture-funding. After JFDI finishes, we assume that the business will be in a position to seek big-venture-funding.
The alternative to fundraising is bootstrapping. We are totally ok with that – if that alternative allows you to express the natural potential of your innovation.
But if you’re going to get on this train, you have to realize that you don’t get to steer it: your job is to build the biggest possible business that your innovation can support.
So, to a great extent, your actions are all determined by the question: does this help to express the natural potential of this business?
Venture funding implies a certain loss of control.
You’re the captain of the ship, but you won’t be the (sole) owner.
That’s not entirely a bad thing. Being a single parent is hard. JFDI tries to introduce you to venture investors who represent smart money, who know how to coach and mentor a growing startup, and ideally have useful operating experience in your domain. The relationship between an investor and a startup should be positive. After all, it takes a village to raise a child.
Ego.
Are you more interested in seeing your innovation be adopted by the largest possible market, or are you more interested in being captain of your own ship? You might as well think about this question now, because sooner or later it will come up.
You might think about it using a slightly different framework: “If i discovered a startup tomorrow that is aiming at exactly what i plan to achieve, and if it is led by a team that I respect and could see myself working with, and if it is better funded and farther along the curve than my team is, would I be willing to quit doing my startup and join forces with them, if the appropriate equity and cash compensation could be agreed?”
The only reason to say no to that question is ego. That kind of ego can make or break a company. More often it breaks.
Fundraising takes time.
You have to be prepared to spend not just 3 months at JFDI, but another 3 months subsequently, raising funds. Fintech crowdfunding innovations like Angellist and FundedByMe are now helping to shorten that time. MAS is pretty progressive about that.
Demo Day
While the focus of the JFDI bootcamp is traction, the climax is Demo Day.
We help you prepare for your six minutes onstage by focusing for an entire month on pitch mechanics. Storytelling and stagecraft help you present your startup to investors concisely and memorably. The pitchman for your startup will receive, in the last month of JFDI, four hours a week of intensive coaching from JFDI mentor Peter Browne, an ex-actor and communications expert. JFDI mentor Hugh Mason, award-winning science documentary producer, has helped hundreds of scientists and engineers tell the story of their inventions to a public of millions around the world; he focuses a lifetime of storytelling technique on your startup.
Who’s in the audience? JFDI recruits 100–200 seed-stage investors, including angels and private, corporate, and government funds. These investors come from all around Asia and the world – for instance, the 2013A Demo Day was attended by 500 Startups’s Geeks on a Plane, led by His Eminence Dave McClure Himself.
After Demo Day, JFDI alumni set up hundreds of meetings with interested investors. Most of these meetings don’t lead to investment, but all of them are useful – at worst, they’re practice!
For a snapshot of who comes to Demo Day, see Meng’s Map of the Money.
After Demo Day we continue to support you through to completion of your seed financing.
Even after that we continue to support you, through at greater reach, through to Series A. JFDI has more startups in its portfolio than most VC funds, so we ask the seed investors to work more closely with you.
Next Article: Who JFDI is For, and Who JFDI is Not For