- What are the benefits compared to doing the business on my own?
covers the benefits of participating in the Openfund.
- What are the criteria for choosing to invest in a proposal?
Some important criteria are the following:
The founders team is the most valuable asset of a startup company. The Openfund is looking for committed founders with excellent technical background and deep knowledge of the market they focus on.
International, sufficiently big and fast growing markets are required to serve as the canvas on which a team will deliver a product. Anything else is doing a disservice to entrepreneurs and investors alike, so the above are considered hard requirements.
The Openfund selects teams pursuing innovative products within the triangle of software, mobile and the web. Technology is not considered an end in itself, but an enabler for problems to be solved in a fundamentally different and more efficient thus valuable way.
- What valuation do you offer?
In the pre-seed stage, the Openfund typically offers a €500k valuation, thus taking a 10% stake for its initial €50k investment and another 5% for the next 50k investment. In the seed stage, this is defined after evaluating the past performance and the potential of the business.
- Why do you provide a fixed valuation for the company?
- We consider the discussion about valuation at the pre-seed stage ill-timed. We believe entrepreneurs should focus on other most important issues instead, thus we offer a fixed valuation that we consider fit
- Can I trust you with my idea?
This question comes in two forms: "What prevents you from stealing my idea?" and "Will you sign an NDA?", but the answer is the same:
- Founders are expected to have domain specific knowledge that will keep separating them from the competition as time goes by and the business evolves. They are the ones that will drive the products in new directions that their competitors don't know about.
- If your idea is so easy to copy, someone that will see the opportunity will raise greater funds and just overwhelm the business. If this is the case, the project was not a good candidate for investment anyway.
- We do not sign NDAs except in ancillary cases of greatly advanced due diligence.
- Your greatest assurance however is that you're dealing with an institution that was built to last. Our reputation is key to our success and our role is well defined and limited.
- Do you provide incubation facilities?
We provide access to a number of providers, including space, legal, accounting and other services that should take off the basic complexities.
- Do you prefer innovation or revenues?
We require both. Revenues without any innovation (technology as well as operational excellence) do not provide for an efficient way to grow a company, while innovation without revenues is not the type of business we consider to become appealing.
- Do you accept groups of 1 member?
No. In the Openfund’s experience, the various challenges that a startup company encounters are unmanageable for a single person to handle. Entrepreneurs need to go through the exercise of finding a co-founder who complements their skills and they can trust before they apply.
- Will you help me find cofounders?
This question is mostly placed by individuals that "have a great idea" and are looking for technical co-founders, and the straightforward answer is that we cannot help you find partners.
The reason for that is that we need to see proof of your ability to source talent, vet it and find a way to work with these individuals which will be your co-founders.
We also often see that founders that come from a technical or business background discount the other side. This is a red flag and founder teams plagued by this mindset are the quickest to dissolve when the inevitable turmoil of a startup begins.
- Do you take in applications of already incorporated ideas?
Yes. Each case however requires different handling, so get in touch for more details.
- Should I fill in the application form in English?
Yes. This is a hard requirement.