

Kima15: $150K for 15% in 15 days - jber
http://www.kima15.com
New offer from KimaVentures: Kima15<p>Raise $150,000 for your startup in 15 days for 15% equity
======
grellas
While there is a pithy debate going on about Kima and how it fares in an
economic comparison to YC, I will throw in my more technical assessment of
what founders should consider in deciding whether the sort of up-front equity
funding offered by Kima is right for them in the first place.

Seed funding can be a tricky proposition for startups.

The broad choices in dealing with the early expenses are: (1) self-fund by
making founder loans/advances to the company, whether for demand or
convertible notes; (2) get friends and family money, usually in the form of a
convertible note; (3) go to institutional investors and either argue for an
acceptable valuation as part of a seed equity funding or bypass that issue and
hope to get bridge money via convertible notes. Of course, in the right cases,
founders can also sell products and far-more-typically services to generate
enough funds in the early going to fund development efforts tied to a longer-
term strategy.

In working with founders over many years, it has been my rule of thumb that
they should _not_ do too early of an equity round unless there was some very
special reason for doing so. Equity rounds come with strings and
complications. They require that you set a value on the venture. That in turn
means you need to negotiate the issue of price precisely when you are at your
weakest as a founder trying to build value. It also means you create tax risks
and complications: if the equity round is too near the time of formation, the
$.0001/sh pricing used by founders for their shares may look funny next to the
much higher amount per share paid by investors, raising risks that the
founders can be deemed to have received their shares at the higher valuation
as potentially taxable service income; once you do an equity round, you will
need to do 409A valuations in connection with doing option grants and that
necessitates getting outside independent appraisals; equity rounds come with
strings, including investor preferences, investor protective provisions
limiting what you can do as a founder without investor approval, co-sale and
first refusal rights favoring investors and concomitantly limiting founders,
board seats and/or observer rights for investors, and the like. Much of the
"distraction" that founders face in raising money exists precisely because a
typical equity round can be a complex process and, apart from needing to sell
the economic proposition behind their venture, founders must also make sure
that any funds they do take in are taken on reasonable terms. Sorting through
the issues of company valuation, preferences, and similar issues takes time
and can be a grueling process. What is more, when you have emerged from the
process, you will find yourself having to price your equity incentives to key
people you are trying to attract at a much higher price than you otherwise
would have if you had not done the equity round.

So, in the early stage, it is usually best to defer all this and focus on
building value with funds made available through some sort of bridge
instrument such as a convertible note if possible. In such cases, with
institutional investors, you may still find yourself arguing about valuation
in negotiating caps but the process is nowhere near as involved as it is with
a typical equity round and founders with leverage can usually dispense with
caps as well. Apart from the cap issue, most of the other complications simply
go away. You retain substantially complete founder independence with almost no
strings on what you can do going forward (subject to normal legal rules
involving fiduciary duty, of course). You retain virtually complete control of
the timing and terms of your future funding choices without needing investor
approval to make the choices as you like. And you basically eliminate the tax
risks altogether. Finally, because you have not had to price your stock, you
retain flexibility to continue offering very cheap equity incentives to
others, including those who may become potential co-founders, without creating
tax problems for them or for your company.

There are cases where founders prefer to do an equity round in spite of the
complications. Maybe they can get the equity on good terms with a favorable
valuation and even without the complications of doing it as preferred stock
(e.g., in some friends and family situations). Maybe they prefer not to have
debt on their balance sheet, with the legal obligation to pay it back in case
they can't do a qualified funding round. Maybe they just need cash fast and
the people they are dealing with it are ready to do it on oppressive terms
that are easier swallowed than would be shuttering the venture. Or, on the
positive side, maybe it means taking funds on less than ideal terms but from
an investor who will add large value to the venture apart from the cash
element. Who knows? It is a big world and people have all sorts of reasons for
choosing one way or the other. The point is that they need to think through
the pros and cons carefully and make a wise choice for their circumstances.

The Kima offering offers fast cash to qualified ventures. This has an obvious
advantage of being simple and fast for those who qualify. Whether it is the
best choice for a given venture turns on how the founders in that venture see
the trade-offs. If you take the Kima offer, you will wind up doing an equity
round. It will be for preferred stock. It is for cash only, with no value-add.
Thus, you will have the tax complications that attend an equity funding,
including needing to price your stock and option grants based on the $1
million company valuation and the need to do 409A valuations. Moreover, the
strings that appear in Kima's term sheet are not trivial: the valuation is
based on no larger than a 5% equity pool; you give up a board seat; you give
Kima a broad veto power on many of your future actions relating to fundraising
and other important company matters; you agree to restrictions on how the
value is shared in case you are acquired. If the answer to this is that it is
worth it for many startups to make such tradeoffs in exchange for fast cash, I
would add that these funds are not being offered to just any startup. Kima
reserves the right to cull through the submissions and pick from the best
only. While that is fine, of course, it does mean that the value of the
offering must be weighed against other choices open to the same level of
quality startup that it hopes to fund and not against the more limited choices
open to just any startup. The biggest question I would have for those startups
is this: fast and easy cash, yes, but are the complications worth it for $150K
if other reasonable options are open to you? While they may be for some, for a
good number the answer would very likely be no.

How does Kima compare with YC? PG has assessed the broad economic proposition
to which I would add the following: YC does take an immediate equity grant but
does so with common stock and on terms that don't affect founder stock
pricing. Thus, near-complete founder freedom is preserved and there are no
special strings that come with the investment. This stands in pretty sharp
distinction to the Kima terms, which involve preferred stock and a number of
strings. But by the far the biggest differential that I see comes with the
value-add piece: with YC, founders pay a price in terms of equity they give up
but they get huge benefits from becoming part of a network that keys them in
to relationships and solutions that can prove invaluable to an early-stage
startup. In effect, founders pay (somewhat) dearly in early equity to partner
with a powerful ally that may dramatically speed up and enhance their path to
success. This sort of trade-off is not worth it for all companies but, for
those that dream to do significant scaling and that need to have doors opened
to future VC investors, the YC stamp of approval and the YC resources offer
value that is not easily found elsewhere. Of course, no angel investor, Kima
included, can match this in any comparison, though such investors can add
value in various lesser ways from their relationships and the like.

Different founders have different needs. What Kima is doing is new and
innovative and the people behind Kima are savvy and sophisticated players in
the startup investment world. Therefore, it is very nice to see this sort of
slant on seed financing. But, again, there are always trade-offs and founders
should weigh these carefully in deciding whether the Kima way is the way they
want to choose.

~~~
sdesol
I can't begin to say how thankful I am for having you post this. I'm currently
mulling over my options about whether or not to seek funding and what you had
posted was eye opening. It truly changed my perspective on what you may have
to give up if you do go the funding route.

To a business laymen like myself, giving up 15% may not seem like much but as
you point out, the caveats can be quite extreme. So thanks again for your
post.

------
pg
I was curious how this compares to doing YC. YC usually asks for 7%, in return
for which groups get in the average case $18k. Every startup also gets an $80k
note that converts in the next equity round. In the last batch the median
startup raised $795k after Demo Day. We'll conservatively assume a $5m
valuation cap, and (very) conservatively assume the next round valuation (when
the $80k note converts) is also $5m. So if you can get into YC, in the average
case you'll end up afterward having sold 22% of the company for $813k.

We do a lot more than help people raise money, of course, but financially that
is what the median trajectory looks like.

~~~
jber
Hello Paul

Great numbers, we really admire a lot what you're doing at YC but not all
companies want to join an accelerator or relocate and not all companies are
accepted by YC ;-)

We see Kima15 as a different offer for different founders all over the world
who want to raise funding quickly and when they need it.

~~~
pg
A startup has to be in the same place as its investors if they want to talk
face to face, and empirically we've found this to be a necessity when talking
about the subtle and complicated problems startups face. Email and Skype are
such poor substitutes that they're a qualitatively different thing. Which
means if a startup wants advice from its investors as well as money, they
either have to raise money from local investors or one of them has to go to
where the other is, at least temporarily.

~~~
jber
Agree with you, it's __certainly better __to be at the same place, but there
are hundreds of counterexamples of huge successes with VCs not living near the
companies. In Europe, Israel, Russia, we have plenty of them.

We are also investing with a lot of local investors and they are sometimes
managing the local relationship (or mostly making things worse :-()

Last but not least, many of our companies are targeting a local market (China,
India, Pakistan, Switzerland, France, Argentina, UK, Germany...). They have
nothing to do in the Silicon Valley.

The YC model is awesome. No doubt on that. but there is room for many other
models. (and thanks God, we invested in Rapportive before they went to YC
;-)).

Check also what my partner is building : 1000Startups, the biggest incubator
in the world in the center of Paris
[http://1000startups.fr/en/](http://1000startups.fr/en/)

~~~
kops
As far as I can tell, YC isn't much of an option if you aren't located in US.
Besides most of the start-ups go down the drain not because they lacked advice
but because they ran out of money. So congratulations for creating an option
that can be considered by those who have no intention/ability of moving to US.

------
clarky07
Seems lots of people are calling the terms terrible, but for an early stage
investment it seems pretty reasonable to me. Plenty of things are in the 1M
valuation and under range. If you are shooting for something 8 figures or
higher, in the long run this won't kill you, and in the short run it lets you
get started and gives you a good bit of runway for say 2 founders.

I'm not looking for funding at the moment, but the speed would be a huge bonus
for me. There is a huge amount of value in being able to focus on making your
business succeed instead of focusing on getting funding so that you can
continue trying.

~~~
gizmo
It's pretty good for two founders in the earliest stages (e.g. only a rough
idea of what they want to build). It's not so attractive for startups that
already have a prototype and a couple of customers.

~~~
alasdair_
We have a prototype and a couple of customers and still think this is a good
deal. It would let us go from pure bootstrap mode (chasing money in any form)
to longer-term thinking.

------
liamgooding
Awesome, as a Kima company who took investment before this "Kima15" offer had
been announced, I can say the biggest thing that attracted us over the other
firm offers we had at the time was Kima's commitment to moving fast with the
cash.

We'd maxed out personal credit cards and we were literally on a ~2 month
timebomb of personal runway.

So yeah, awesome to see they've now put this "move fast" promise into a
transparent offer. Sure there's limits on the cash and valuation but, I guess
better to see it upfront.

In our case, the fees were £1,800 (incl 20% VAT) for our lawyer, and €1,136
(inc 19% VAT) for Kima's lawyer.

------
Matt_Mickiewicz
The partners are based in Israel + Paris (no one in the US), which makes
things complicated with time zones of they are investing in North American
companies.

A request for "weekly updates" is also quite burdensome on founders, and they
also have the optionality of a board seat (also unusual for investments at
this stage).

~~~
midnitewarrior
I would think anybody who hands over $150k gets the courtesy of an hour phone
call a week. Considering that you wouldn't have to spend weeks / months doing
the show-and-tell to dozens of potential investors, I think that's a small
price to pay.

------
robterrell
I wish this had existed years ago. To raise a $150k round from an angel group,
it took me 10x the time (150 days). I spent countless hours on dog-and-pony
shows, negotiations, documents, contracts, lawyers, and ended up with
ridiculous amounts of drama around the board composition, placating founders,
and literally weeks of driving around to pick up individual checks from the
angel club members... to ultimately gain investors whose interests weren't
really aligned with ours and, aside from writing a check, did nothing to help
to company.

I'm not saying we walked uphill both ways in the snow to get a round of
funding... but it's definitely easier right now. Hope YV and Kima is more
representative of a new normal than a passing fad.

------
jkaljundi
When we were looking for funding with Weekdone
([https://blog.weekdone.com/weekdone-wins-slush-
announces-200k...](https://blog.weekdone.com/weekdone-wins-slush-
announces-200k-investment/)) what attracted us to KIMA was the speed and ease
of doing business with them. Looking at my notes, 6 days from the call to
agreeing the terms, which is quite exceptional in Europe for a cross-border
transaction. Speed was my no 1 goal in fundraising to get back to product and
customers, so this was a blessing.

You can follow KIMA portfolio day live on Monday, tune in:
[http://www.dailymotion.com/kimaventures#video=x17ww6i](http://www.dailymotion.com/kimaventures#video=x17ww6i)

------
tptacek
A board seat for 150k does not sound reasonable.

~~~
jber
Check the SLA on the homepage: "-request the right to a board seat (2
founders, 1 investor) but we do not take the seat unless required to solve
founder conflicts and have no intention to tell you how to run your company."

~~~
patio11
You're free to offer any terms you desire and if people accept them than may
you find mutual success, but I've got two comments:

1) People who know what "the going rate" is will not be overwhelmingly
enthusiastic about you asking for a board seat given the package deal here. An
option on a board seat is, approximately, as expensive _or more expensive_
than a board seat. For example, it's going to cause auto-failures of
negotiations with later stage firms who would otherwise be prepared to pay
market price for board seats (my SWAG from outside the Valley is "in the
neighborhood of multiple millions currently"), because board seats have to be
static and scarce to retain value.

You also probably uniquely cause signaling risk because at least some actors
are going to model your decision to take or not take board seats like they
would themselves choose to take or not take board seats, and come to the
conclusion "A prior investor has _a free option on a board seat_ and has
declined to exercise it, despite having had full knowledge of the business'
deepest secrets for the last year? Wow, that makes my investing decision a lot
easier: PASS!"

2) It seems to me that your strategic reason for asking for the option to a
board seat is that you desire to take a personal hand in managing downside
risk when some startups you fund implode. This implies that you both believe
your contribution will help to manage downside risk when startups implode, and
that rescuing imploding startups is a great use of your time. Many people in
the community would advise that a startup which is imploding is almost immune
to correctional action and accordingly valued at approximately zero, and that
startups imploding is sort of the model and that your main source of risk
reduction is having 7.5% invested in Google 2020 rather than tweaking twenty
imploded companies to slightly-north-of-imploded.

Or, to rephrase, if the successful outcome is "We do not get a board seat"
then do not ask for a board seat.

~~~
jber
1/ For next rounds, we are almost all the time leaving our seat to the new
investor (if it's a good/great one. Not if it's a shark VC) More than 50% of
our 2010/ 2011/2012 investments raised a Series A, Series B and more. So nope,
you're not right. We have excellent reputation in the ecosystem.

We invested in 220 startups. Had this right to join board everywhere and never
used it until now but I still prefer to keep this right.

2/ Discordance between cofounders (in case they are not sharing the same
strategy) is not always a startup implosion. Sometimes we just need to come
and become the 3rd vote who can decide which founder strategy we will choose.

~~~
tptacek
Have 50% of YC investments raised a series A?

------
ajju
The 5% premoney pool is another thing that will dilute founders (unless I am
reading this wrong). YC doesn't require a premoney option pool for employees.

------
tinbad
From the term cheat:

"The Investor will invest up to US$150,000 and would hold no less than 15% of
the Company on a fully diluted basis."

I'm not a lawyer, but doesn't this say that their 15% never dilutes? If so,
that would be a horrible scenario in case of future fund raising.

~~~
kenrikm
Doing some research I found this:
[http://www.andrew.cmu.edu/user/fd0n/55%20Anti-
dilution%20Pro...](http://www.andrew.cmu.edu/user/fd0n/55%20Anti-
dilution%20Protection%20Postscripts.htm)

------
jtchang
It's surprising how transparent Kima is. The terms are reasonable and it's not
like you have to take the money. Speed is a huge deal as well...knowing
whether you can close or not can mean spending another 1-2 months working on
your product and not have to worry about taking meetings from various
VCs/angels.

------
zhuzhuor
off-topic: the red background seriously hurts my eyes

~~~
jber
Thanks for your feedback. Better now?

~~~
rpedela
The darker red is definitely better, but generally red is a bad color to use
excessively. Plenty of studies have shown that red can invoke the fight or
flight response and increase stress.

~~~
loceng
Maybe that's what they're going for. :P

~~~
jber
Not at all ;-) What color do you suggest ? ;-)

~~~
johnnyo
Even the new red is painful on my eyes. I navigated away before I finished
reading, and when coming back here, it still created an afterimage on my
retina.

I recommend a much more muted background, especially for the textual portion
of the site. Run red banners down the side if you must, but change the text
section to a more readable contrast.

------
yonim78
Kima Ventures is probably the fastest and most efficient VC I had the pleasure
working with. I recommend all companies pre-seed to try simply try it out.
Jonathan Messika www.Vodio.com

------
matponta
Love the "fast" approach!

Now, it only it was a convertible note, possibly discounted but a convertible
note...

~~~
jber
Why?

~~~
matponta
Variability on the initial maturity of the startup, mostly.

Reduction of adverse selection on your side, also.

Based on your historic numbers, would it be a significant cap on your upside?

------
sylvinus
I'll admit being skeptic at first but every time we asked @jberrebi for help
in my previous Kima-backed company, he was both smart and fast. Impressive
feat with so many startups in the portfolio+pipeline.

------
yurisagalov
I like the approach, but I don't understand why an investment that's so well
defined ("based on the standard Seedsummit documents") requires legal fees at
all.

~~~
jber
If you can find us a lawyer working for free, would love an intro ;-)

~~~
yurisagalov
Having standard terms should mean lawyers are only needed the very first time
(to set up the standard terms).

The rest should be 'fill in the blanks', and since valuations/dollar amounts
are not negotiated here, the only blank each investment should have to fill in
is the company information (name, incorporation location, address, etc.)

Maybe I'm missing some steps in my mental model?

~~~
jber
Unfortunately, lawyers have to check that the company exists, request info
from founders, check that the IP is owned by the company etc...So cost is 2.5K
to $4K (and it's not expensive)

We HATE paying lawyers... :-( We are not investing in a company for that. So
we will try to work with all good lawyers with great prices. As you said, it's
not so difficult.

~~~
adambenayoun
Jeremie, I don't know if that is part of an agreement you have with your LPs
that you need to have a lawyer doing due diligence for you and that require
you to spend 2.5k-4k but allow me to propose a perspective of a founder who
finished fundraising and one of the thing that I did was to ensure to keep my
lawyer out of the equation when it was not needed.

1\. Checking if the company exists - meaning looking over incorporation
documents, validating the bank details and other information to make sure
you're funding who you think you're funding - could be done with someone with
some common sense and not a lawyer - probably hiring a person who does
administration and work full time for you (the high volume of seed deals
you're making make me think you already have that person).

2\. Checking that the IP is owned by the company is usually done by doing a
TAA (Technology assignment agreement) and in that case this could be a
standard doc that you let the founders sign on. I would believe that someone
on your behalf could also check that the validity of the signatures.

3\. Use a service like RightSignature to collect signature, IPs, timestamps
and even Identification cards picture or something of the sort in order to
check the legitimacy of the person signing on the docs - this will allow you
to remove the lawyer from the equation as well.

4\. Last but not least - try documenting the things you need from the company
beforehand and post it somewhere on the site - knowing in advance what are the
things you are requesting usually eliminate the unneeded ping-ping with
lawyer.

On a personal note - I streamlined the fundraising process by creating a few
templates (with wire details) and having forms on Rightsignature. I had all of
my investors go through that process and closed very fast - including
countersigning and dating the documents once the wire reach our account. I
think every process could and should be streamlined especially if you deal
with 200 companies. Lawyer like to interject in between deals because they can
bill and in our case we were able to save around ~$10k in legal fees because
we didn't let our lawyers talk with our investors and negotiate for us - and
we used a standard note provided by our lawyers.

I'm not saying you could do that but if there's room to reduce the $4k to
something like $500 or even nothing - that mean an extra $400k that can be re-
invested into ~3 companies - imagine that!

EDIT: I know you have way more experience closing deals than me - I just
wanted to offer a founder experience and perspective on that process.

~~~
jber
Thanks a lot for your feedback but here we are talking about an equity deal
not convertible notes... Did you really issued new shares without a lawyer ?

~~~
maaku
Why do you need a lawyer, if you have standard documents already? Maybe this
is something with the Europe / Israel legal framework that I'm not familiar
with?

~~~
jber
Nope, we need a lawyer everywhere to issue shares certificate and doing many
other things.

~~~
maaku
Ok, that's interesting, but doesn't really answer the question. You don't
_need_ a lawyer in the U.S. for example. (You may _want_ one, to make sure
you're not shooting yourself in the foot, but that's what the standard docs
are for. Never in these sorts of things is it actually required that you have
someone with a law degree sign off on it in every instance.)

------
avifreedman
Very interesting. Looks like a great option for those who understand and need
it. For the founders 85% of something is better than 100% of nothing... Or,
85% * some risk of Kima behaving 'badly' (from the founders' perspective).

Having read the term sheet, I'll say that the desire to get for Kima the post-
acquisition excess benefit of any acq-huire exit seems a reasonable request in
concept ("Equalization of financial terms") but it does make the 15% more
expensive if there are others who would invest similarly without it and figure
that N % will acq-huire instead of failing, stalling, or growing. And it
potentially goes a bit too far if one of the founders grows to be a business
unit head at a large company. Would need to see the actual document language
that addresses that though. Also, sorry to be OCD - to be consistent,
"financial terms" should be capitalized in the section title.

The biggest issue I'd have is the "Important Decisions" clause. Incubators and
many (but not all) angels don't typically look for this level of _ability_ to
control that can block the company from growing.

There is some evidence that Kima doesn't use their rights maliciously but
that's the clause to think carefully about - if there is any disagreement, the
IP is in the company and you can't raise money, give distributions, or sell
the company (among other things) without consent.

However, they invite you to talk to other Kima family companies, so I'd
definitely do that and talk about business operations and decision making in
the context of those Kima rights with them.

------
valvoja
Nice and simple. Now who are Kima 15?

Sounds like a Japanese girl band...

~~~
tbassetto
That's a project by Kima Ventures:
[http://www.kimaventures.com/team/](http://www.kimaventures.com/team/)

------
harichinnan
Getting 150K and a company board with qualified people on day1 would be very
attractive for an H1B engineer like me. So I could bootstrap a startup while
having a paid job in a company and if Kima15 invests, this would qualify for
an H1B transfer to my own company(Having a board to supervise your company
would qualify for H1B transfer).

------
gizmo
From the FAQ:

> [We] will continue to make investments via Kima Ventures at earlier/later
> stages or lower/higher valuations. Projects looking for funding outside
> Kima15 can be submitted via the Kima Ventures website.

From the frontpage:

> We will not invest in future funding rounds of your company to avoid
> signalling issues.

That's not good communication. Otherwise, looks very good.

~~~
jber
What do you mean? You're talking about 2 differents things.

~~~
gizmo
When you say that you offer an investment based on default terms and in the
next paragraph you say you also continue to make investments at later stages
and at different valuations then people have no reason to assume that those
investments are mutually exclusive.

~~~
jber
We are investing only once in startup or via Kima15 or via many type of deals
through Kima Ventures

We are never reinvesting in one of this deals.

~~~
gizmo
Argh...

I'm saying the _phrasing_ is unclear. Bad communication. If you don't reinvest
in any deals then that should be mentioned clearly in the FAQ. Right now it
isn't.

Second example:

> Will you consider my business if we are later stage (higher valuation)?

Answer:

> Kima15’s standard offer allows us to make decisions and close investments
> very quickly but we realise [sic] that not all companies will be at this
> specific stage so we also continue to accept submissions via Kima Ventures

This implies that yes, you do invest at a later stage. But the next sentence
goes:

> We do still only invest at the earliest stages...

Which implies the opposite: that only early stage investments are an option.

So although I like the idea of Kima15, some extra proofreading wouldn't hurt.

~~~
jber
Ok. Thanks a lot. We are trying to make it clearer

------
amolsarva
@Kima testimonial -- these guys took a look at my recent venture very fast,
very authoritative, read the docs and sent the money, and have been completely
hands-off. Kima is not a startup school for "teach me" founders. It is a the
model of a quick-decisions seed fund. In my case they followed a co-investor
who they knew well. "He's in? We're in. Done." People say this but I rarely
see it.

As for what else they add -- I'll find out next week in Paris at their summit
next to Le Web. I suspect the 100s of CEOs they have backed and big european
network will be things I value. They are relevant for the company I'm
building.

I think the Kima pitch has a lot in common with the PG worldview -- founders
want fast decisions, money, network. Maybe they want a school or maybe they
can run a school; founders vary.

------
loceng
If you're this ready for funding, you should probably shop around.

~~~
carlosrt
500 Startups offers $100,000 at a $2M valuation (i.e. 5%). Cheaper than
$150,000 at $1M (i.e. 15%).

~~~
jber
As far as I know, it's $50K for 5% not $100K

So exactly the same postmoney valuation.

~~~
carlosrt
500 offers $50k at $1M or $100k at $2M (~5% regardless of check size).

Source: [http://readwrite.com/2011/02/10/dave-
mcclures-500-startups-a...](http://readwrite.com/2011/02/10/dave-
mcclures-500-startups-ann#awesm=~opmYJqlHFthX3q)

I added Kima15 to this investor database:
[https://docs.google.com/spreadsheet/ccc?key=0AszA0J0G-ptCdG1...](https://docs.google.com/spreadsheet/ccc?key=0AszA0J0G-ptCdG1HRXNVS3dQMkhGaWZqaEJEU0dfSEE&usp=sharing)

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soneca
As this is looking like a AMA for jber, I will ask:

How many brazilian startups have you funded? I understand that you are
investing everywhere, but the country counts? I mean, bigger markets = better
chances?

Also, just to reassure me, can you completely guarantee that if I don't have
an answer in 5 five workdays is because I didn't pass? Just to control my
expectations and illusions here if that happens.

~~~
jber
No investment in Brazil yet but some in Argentina. The country can count but
we are investing everywhere and Brazil is an enormous market.

About the 5 days, we will do our best to give an answer in 5 days. If not, it
means that we are not doing our job well ;-)

~~~
soneca
thanks, and good luck!

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deathflute
A naive question to founders who have taken such seed funding before - can you
directly take money out of a investment like this to pay for your living costs
or you have to go through the headache of establishing payroll and a small
salary for the founders?

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jber
Payroll is obligatory for tax reasons...

~~~
deathflute
I see. Any pointers to a cheap payroll processing company?

~~~
jber
Nope . It depends where you are. but really, it's very easy to find online.

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conductr
I don't see it being specifically limited to software startups. Some startup
with a physical product/service might find this useful to finance
inventory/growth. The terms don't sound so bad when you look at it from that
perspective

~~~
jber
Yep and we love IOT startups! Check some of our investments
[http://petnet.io](http://petnet.io) http//www.greenboxhq.com

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staunch
This could be just as important as YC if it works. This is closer to what many
people really want. It's enough money enough to seriously test an idea, but
not enough that you could waste a lot of time going down a bad path.

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bsiddiqui
Giving up 15% of your company for $150k? That's the amount you'd expect to
give up, roughly, in your seed round. It's hardly worth considering if you
think your company has any value.

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miamidesign
I'm blind, it's too red, what does the page say?

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jber
We just changed it. Better now?

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salimmadjd
I didn't see the before one. But there is a strange delay to render time. Not
sure if there is some heavy library or something is being loaded.

Also impressed that Jeremie himself replied to this thread and not some
intern.

~~~
jber
Thanks Salim ;-) We don't have any interns ;-) That's why ;-)

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neurotech1
Do you require startups to be legally incorporated, or can that be done during
the funding process?

Also, Is your preferred US Entity a Delaware C Corp?

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kiwup
Great!

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ye
I never understood why people bother with such tiny amounts of money.

1) It's the amount you can borrow from your family most of the time. Or just
make it working in IT and saving like mad.

2) It's barely useful. $150K is not enough to hire even one great developer
for a year.

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newsum
My thoughts exactly. Just save, bootstrap, launch and raise a large Series-A
round. $150K for most companies is still not enough.

~~~
midnitewarrior
I wonder if Amazon would have existed today if Bezos had waited another 2
years while he worked a day job to scrape together $150k.

Time = Money

~~~
newsum
Time = Money only for ideas that are easily reproducible. if you truly found a
niche it's nearly impossible for another business to execute it the same way.

~~~
marcamillion
Except that most of the "best investments" that VCs make are not in companies
in a niche that are not hard to reproduce.

Twitter & FB are easily reproducible, and they provided awesome returns for
their investors.

