VC Lab Info Session (11 Feb 2021)

Alright, hello everybody. Welcome to this VC Lab info session. Welcome, welcome, welcome.

People are streaming in, which is great. Thanks, Mike, for setting everything up. We should have hopefully a few dozen aspiring VCs joining us tonight. The purpose of tonight is to answer your questions. So here's what we're gonna do. We're gonna go through a brief overview of the VC Lab program, which is an accelerator for venture capitalists. Then I have a half dozen common questions that we are getting asked a lot, and I'll give you answers to them. And then everyone, there's a Q&A area, you type your question in and we'll go into your specific questions one by one, and you can upvote questions of others that you think are good. So you can post your own questions, you can upvote questions from others. So we're gonna get lots and lots of questions asked and answered today. We have 1,500 applications to this cohort of VC Lab and growing. And so it's gonna be a great group of funds started in the next few months. Mike, while others are streaming in to get started, do you wanna do the presentation quickly of VC Lab?

Let's do it. So hello everybody, welcome to VC Lab. I'm gonna give you a brief 5-minute or so presentation on VC Lab this way we can cover some of the main things that we will go over in the program. So again, we're going to just do a quick overview of the program's logistics, and we're going to go over some of the results of the program as well, and then we're going to open up the rest of the session for your question and answer. So who are we? My name is Mike Supravici. I am the Managing Director of Portfolio Success at the Founder Institute. I have also helped launch 12 funds here internally at the Foundry Institute. I also manage, you know, do investor relations with over 200 LPs. In addition to that, Adeo Aresi, who's the CEO of the Foundry Institute, who you met already, who has also launched 13 funds and is a 9x entrepreneur, has generated $2 billion of value. So we are basically the two main leaders of the VC Lab program, and we're looking forward to working with you. So the VC Lab program is a program that's specifically designed to get your fund to a first close in 6 months or less. So this is not a learning program, this is a closing program. And everything that we do has, you know, no theory or anything like that. It's like very tactical, do this, this, this, and that to get you essentially to a first close. There's no theory, it's 100% execution. We will be doing lots of, you know, webinars every week. There's going to be weekly deliverables that kind of keep you on track, active Slack community. And at the end of the program, we will be doing a series of limited partner demo days so that you can— we can accelerate your first close. On average, the program itself takes a minimum of 25 hours, but then again, those aren't like program hours, those are fundraising hours, so to speak. Okay, um, the program is broken up into 4 different sections, so to speak. So the first month we're going to be working on helping you validate your thesis, and then you're going to be testing that out. Then you're going to be working on your deck, and you're going to start initial limited partner meetings. Then you're going to go over getting your data room, your financials, everything in order so that you can pass diligence with limited partners. And in month 4, you're gonna be working on basically your funnel so that you can get those limited partners to first close it. You're gonna at this point have quite a bit of the fund, let's say it's hard circled, and you're gonna be forming your fund and beginning to take wires into your fund as well. In addition, we're gonna be doing weekly mentor presentations as well as a weekly ask me anything so that we can answer any of your questions as well. In addition, the program itself, you know, has a bunch of different types of partners to help you get there faster. So we have legal partners, we have back office partners, tactical guides, various vendor discounts, as well as the various different templates and things like that so that you can, you know, do these, some of these, this work quite fast. And here are the results. So the VC Lab 2, which is our previous cohort, we looked at 967 applications. 144 funds enrolled and 42 funds graduated. So in order to graduate, essentially you have to get to a first close. The average time to first close for this last cohort was 5 months, and the average first close amount was just over $1.6 million so far for the VC Lab 2 cohort. So we are looking to essentially replicate, if not improve on those results in the next cohort.

So we already have way more applicants, right? So we're over 500 more applicants.

Exactly. So look, if you haven't applied yet, feel free to go to fi.co to put in an application. And we're looking forward to taking any questions that come up. If you open up the Q&A, please add whatever questions you may have there, and then we will be, you know, answering them for you. And there's an upvoting feature as well. As well so that we can, you know, cover anything you may have.

Okay, so to kick it off, we got one question already in the Q&A. So don't be shy, guys, add your questions down there. In the meantime, I'm just gonna go through the standard questions we get all the time. How much does the VC Lab program cost? I hear this on social media, through email, everything. It's free. Okay, so it literally costs nothing. If you then say, why do we do it? That's also a very good question that people don't generally ask, but I'll answer it anyway. Our, well, first and foremost, we believe that it's mission critical for humanity to fix the innovation cycle so that we're creating companies that matter to improve the lot of humanity living on this planet, etc. And today, a lot of the venture capitalists, a lot of the founders, and a lot of the ecosystem builders are all about essentially things that don't matter, like working on optimizations on SaaS, or— and I'm not saying that those businesses are bad. In many cases, those businesses are great, But we want to inspire venture capital firms that are gonna fund companies to fix our ecosystem, to fix our healthcare system, to fix our education system, and basically bring us to a place where we're able to be proud of the world that we live in for our children and our grandchildren. Right? And today I don't believe that's the case. So we ask that everyone that enrolls sign the Mensarius Oath. And this is our way of giving back to the world because we've become very good at raising money. And we're going to convey that skill to you. And we only want to help people that we want to be around and want to work with and like and share similar values as. Oh, we lost Mike, but— oh, he's back. Okay. Is there any required commitment to the Founder Institute during or after the program? This is another question that we get. No. Of course, if you fund our companies, we'd be really happy If we're friends and eventually can meet up for a beer, that would be great, but there is no commitment to the Founder Institute. There's no commitment, uh, before, during, after the program of any kind between us and you. We're here to help. That's it. Okay, um, does the Founder Institute provide any materials about setting up a VC to people that don't enroll? Well, yes, there's a pre-curriculum, uh, that's free, which helps you think through how to build an investment thesis. And we encourage everyone to use that whether you're in the program or not. The program is, is, is a bit more advanced than that thesis, uh, and it's certainly by the end of the program it's much more advanced. We're going into you know, structural theory, uh, on, on fund setup. But, but if you want something to get started and you want some free resources, we have that, uh, right now. Um, of course everything is free, but the program we try to keep very curated for people that we believe in and share values with, etc. Okay, how does the program work for different time zones? Okay, so we've had Europe, Asia, Latin America, and pretty much every inhabited time zone on the planet minus a few in Central Asia, everywhere enrolled in the program. And how it works is Mike and I do events like this at different times. We usually do them in the morning our time, but sometimes we do them in the evening. Tonight it's nighttime where we are. And the goal is to accommodate the time zones of as many people as possible. In addition to that, everything is recorded and the Slack group is very active and that's obviously asynchronous communication. So we've, I believe the program is very successful for all different time zones. Mike, if you wanna add anything on that, there's a couple other standard questions. I see lots of questions coming in and remember to upvote ones that you like.

And to save you time, we also transcribe a lot of the webinars so that, you know, if you are in a time zone where, you know, you might not be able to kind of meet us that day and ask questions, we transcribe everything so you have everything there as well. And we're on Slack all the time, you know, 24/7 almost, so we'll be able to give you some questions.

Mike is on Slack more than me. You know, that is literally true. Okay. Are enrolled funds— Is this going to be introduced to limited partners? Or for those of you who don't know, limited partners are the investors in venture capital funds. The answer is yes. And we do that in the following way. We do limited partner demo days, almost like startup demo days, but there are some big differences. These are very curated, private events where you, a small set of your peers, will present in front of maybe 50 or 60 limited partners. And then we have breakout rooms where you can go and actually meet and see limited partners face to face. And we've been doing these virtually and they've been I would say fairly successful. Most people can meet any, if you do it, if you present well and are prepared and thoughtful, you should be able to meet a handful of new limited partners in an event like that. Do you wanna add anything to that or I'll go to the last question I have?

[Speaker] And our limited partner database and list is growing with every single Demo Day. So by the time you get to a Demo Day, there will be even more limited partners and so on. And every cohort just keeps building on each cohort.

What are the pre— are there and what are the premium upgrades to the program? So we, okay, so the very first program was much— we're on our third cohort. The very first program was much smaller. So we did office hours for everybody and that was great. The second program, got much larger and we did office hours for a little bit for most funds, but in a group format. And now the program's really gotten very large. So, I mean, 1,500 applicants is kind of nuts and we'll probably have 200 enrolled funds. So if you want one-on-one time with Mike and I to work through issues, That's basically the premium program, and it's $3,000 for 4 months. So it's not a lot of money, and we meet, uh, one-on-one with you once a week. Now, not everyone who wants that can get it. We're going to be a bit selective, uh, because again, it's just not— in fact, we just, uh, artificially ended an office hour session early because the person wasn't closing fast enough. So we're picky about who we do office hours with, but we, you know, we're here to help. We want to help you. If you're doing well and you have a question, of course we'll try and get on a call with you. But basically, if you really want some deep diving, um, week-to-week assistance, you know, we, we ask you to pay just because it's otherwise, it's, it's too time-consuming for Mike and I. All right, there are tons of questions coming in already, which is great. Remember to upvote We're going to start turning it over to your questions. So Brian's asking, is there a cap on the number of applicants who will be taking this cohort? Well, I don't think there's a cap on the applicants. The deadline is on Monday. We've been adding, you know, a number of large number of applicants every day. We're going to be on the BBC next week, so there's no cap on the applicants. I mean, It's theoretically possible we may break 2,000 general partners applying. I mean, I wouldn't be totally surprised if that happened, which is much larger than we anticipated. We had hoped we would hit 1,000 and we're already at 1,500. So no cap on applications. I don't know, Mike, we haven't discussed this yet, but I'm thinking we cap the program size to around 200 200 funds?

Yeah, 200 is about the limit right now of what we can do. And we've experimented with this level within other accelerator programs that we've done, so that we're very comfortable at that. But anything over would just be too, too, too challenging, and that wouldn't be a great experience for the people involved as well.

For you, well, it might be— it's probably better for you than it is for us. The more funds there is, the more work it is for us. But you get this huge network. The Slack group is insanely active, guys. I have never seen a more active Slack group than the VC. Everyone's chatting about every kind of regulation, na na na na na, and it's very, very active. So more funds means a more, even more active Slack group. Okay, what's the profile of successful applicants? You look, you either have hustle or experience, okay? And, uh, you can make up for experience. You, no matter what, you're going to need some kind of hustle because raising a first-time— the, the program is targeted for new managers, and by definition, a new manager is someone who's creating a new venture capital fund. Now, you may have actually been a venture capitalist for 10, 20 years or however long, but when you start a new fund, even if you were the manager of your previous fund, you are considered a new manager. So we focus on new managers and then, whoa, I think, did I, did you archive that? [Speaker] Yeah. All right, good. So the successful ones, everyone has a certain amount of hustle because being a new manager is hard, but it's either, you know, on a high level, you've got extra hustle or extra experience. So there's a base level of hustle that's needed for anyone to raise a new fund as a new manager. And so let's assume that you have it. And then, you know, on top of that, if you don't have the experience as an angel investor, as a previous venture investor, etc., then you really are going to have to hustle a bit more. So one or the other. Do you want to add anything to that, Mike, or should we move on? There are tons of questions now.

Yeah, we have 14 questions. Let's do it.

VC Lab, will VC Lab also focus on the due diligence or identification of startups? Yes. So I think Mike did a brief outline of the 4 months of the program, and of course, I asked Mike to keep it short. So there's a whole multi-week, in fact, most of the program, which talks about what's called deal warehousing. And so what a new fund will often do is identify deals that it intends to invest in, or that intends, has invested in and will contribute to the fund as a capital contribution. And talk more about that if you're interested. So deal warehousing, I would say, is a huge consistent theme throughout the program. And as part of that, we'll be looking at diligence, et cetera. Do you wanna add anything, Mike?

[Speaker] Yeah, in addition to that, we open up opportunities for you to basically practice your diligence on various portfolio companies as well by kind of hosting office hours and things like that. That, you know, you'll get, you'll get good amount of experience with that as well.

Upvote questions you like because the questions are streaming in and we'll answer them in order of their voting. So Kevin's asking, at what stage in the process do you require legal entity formation for the fund? Um, so that's a great question. Right now it's basically— so, so it's the end of the program, the, the last month. So The way, Kevin, you wanna think about this is the following. You would never engage a lawyer unless you have certainty on commitments because setting up a fund is very expensive. It can cost $150,000, let's say. I mean, it can be less. I mean, I don't know, maybe 50 if you're doing a, plain vanilla fund with a lower cost provider. And we have some deals in that range. And $150,000 if you're using like a Cooley or a high-end law firm that does a lot of fund formation. And so you don't wanna engage your law firm until you have line of sight on the money. So the way our program works is in roughly the third and 4th month, you're gonna start to be collecting commitment letters, signed letters of intent from limited partners that they want to invest in your fund. And when your commitment letter threshold reaches 10% or greater, you will go, which is the sort of the, I don't know if it's the right way, but it's certainly the best way that I can think of. When you have that confidence in your underlying commitments, then you go to your law firm, which will again help you pick the— where the domicile and all this stuff, and you engage them to begin a closing process. And that will happen hopefully by the end of this program, and then you will close shortly thereafter, which is what we saw with the last cohort. Most of the— many of the funds are closing in roughly 5 months from the beginning of the program to when they started taking in Wires. Okay. What was the highest and lowest fundraise in the— Ah, you know, I—

So the lowest was, so again, we're talking about first closes here. It takes an average of 12 months to close an actual fund, but we're talking about first closes in the program. So the lowest first close is $300,000 and the highest first close is $15.5 million. In the last cohort.

There you go. Thank you, Mike. We know this because we've been surveying our companies specifically because we have a lot of media interest right now. So we're trying to ask the funds like what's going on. So we've been actually getting the survey results over the last few days. Chris is asking, who are the mentors/advisors during the VC Lab program? Where can I find them? So we have a number of recurring mentors and advisors such as Paul Braguil. He's a relatively well-known person who's launched, I don't know, maybe 15 funds, all 15 firms all around the world from Scandinavia, Africa, Asia, the US, et cetera. Then we have providers as well. We have limited partners that come in. So it's kind of dependent though. So we have regular people that, like Paul, that comes in every time. And then when the cohort comes in, we look at the makeup of the cohort. Maybe it's more Europe, less US. This one's looking a little more US than our last two. And so we, pick limited partners, vendors, other general partners as mentors based on the composition of the program. Mike, do you want to add anything to that?

Yeah, and, and, but the main people that will be helping you the most are going to be myself and Adeo. So we're going to be the ones that are going to be in Slack and giving you feedback and things like that. We also have some super mentors like Paul Braguil as well, who will be available to you to help you out.

Um, Hardest is asking, would the program learnings and steps be equally applicable to any cohort member from any part of the world, uh, such as legalities, um, etc.? Um, listen, this is a global fund launch program. So we've launched, helped launch funds all throughout Asia, all throughout Central Asia, all throughout Europe, all throughout Africa, all throughout South America, all throughout North, Central. Do we have Central America actually, Mike? This cohort, we have people in Central America that have applied and been accepted. All throughout North America. I'm not sure, I don't remember if we have Central America or not. This cohort we do. So literally the, I don't know if the simple answer is yes, because people are launching funds with the assistance from the program all around the world and our partners. Obviously if we're looking for legal partners, the main areas of domiciling a fund are the United States, United States, Cayman Islands, Luxembourg, and Singapore. So we have partners in all those places. There's some secondary places besides that where you might domicile a fund. Um, so we're set up global to help you, and so the resources in everything that we do should be helpful wherever you are in the world. Um, Dennis is asking, would it be correct to believe that this program has been taking place since 2012? No, we started, we, I don't know where you got 2012 from. That's a kind of arbitrary number that doesn't sync with anything we've done, Dennis, no offense. So we started the Founder Institute Startup Accelerator in 2009. We started the VC Lab Venture Capital Accelerator in Q1 of 2020. So it's been, the first graduates came in the summer of 2020 and the pandemic actually hit between the start of the program and the end of our very first VC Lab cohort. So that was a very interesting time, to say the least, and those funds still managed to close. So it's, it's a, it's a relatively new program, Dennis, um, let, uh, roughly a year, less than a year old at this moment, but by the time you start, it will be a year old. Um, okay, Krishna, what if I have not been a VC manager at all in the past? Well, uh, that's fine. Mike, what do you think the number of VC managers we have, like 20%, something like that?

Yeah, about that. So basically there's 3 types of folks that seem to be pretty successful at doing a first close. So one are what we call kind of like network leaders. These are folks with extremely great networks and are able to, as a result, have access to incredible deal flow because of, you know, maybe they run a big conference or they do something else or they're like the expert in this field. So entrepreneurs seek them out. So they're able to basically raise a fund off of that. Then there are folks that, you know, have come out of a firm and have some level of, you know, investment experience, right? And then there's the folks who are like really successful angel investors who decided to turn their angel investment practice into a firm, into a business. And so they're using VC Lab to basically launch this firm.

So, Next question, Gary. With over 1,500 applications at present and 200 available spots, give or take, what do you consider a successful application? That's a great question, Gary. And so Mike and I are working on later this year, we had hoped to do it last year, but with the pandemic and everything, it was a bit chaotic. Set up along with other people at the Founder Institute, a fund of funds. So you submit a video when you apply to the VC Lab program. Mike and I watch almost every video. We do have a— well, Mike watches every video. I watch almost every video. And basically, if we think we would invest in you potentially, 'cause we understand that you're a little rough, then we're gonna let you in. It's that simple. So we watch your video and look, so look, this is real, right? This is a real backdrop here. It's not fake. The fake is fine too, but You know, look professional, take it seriously. You're gonna be fundraising on video most likely for the next 6 months or so. So if you can't make a good video about getting in the program, then you're probably not gonna be able to pitch well on video to limited partners. And since that's the main way medium by which you're gonna raise money, then we just probably are not gonna let you in, right? I mean, Mike, would you say— and you can tell.

Yeah, pretty much.

Yeah, I mean, I, I'll give you an example, right? If you're coming in and like, I, you know, thinking of being a venture capitalist, uh, On your mobile phone, right?

On your mobile phone.

Right, at an angle with bad lighting or whatever. It's like, okay, you have no energy. And look, the pandemic sucks, okay? It sucks. Let's be clear. I've lost friends. I've lost, you know, loved ones. I've lost a lot. And I get it. I'm not trying to sugarcoat anything here, but you're starting a fund to make the world a better place. Find a way to get over that and show your enthusiasm about doing that, and, and we will accept you and help you however we can, right? We're here to help. That's what— that we're here to help. Okay, anonymous attendee is asking, does the application process require any interviews? No, so the way the Founder Institute generally works is we let people in and the program's pretty hard and it filters out people that aren't serious. So we do our best in the admissions process to find people we believe in. And then if you're not serious, the simplest way is like, in order to finish the program, You must have 10% of your fund committed. So if it's looking like you're not going to get 10% of your fund completed, committed, or you don't get the commitments, you don't finish, right? This isn't fund fantasy camp. We're gonna help you create a venture fund. Right? We wanna start 1,000 new funds by 2025. That means, thank God, we created about 75 funds last year. We wanna create around 200 this year and then 400 next year. And then hopefully if we do 400 or 500 following year, we're there. right? So we're serious. Hopefully you're serious too. Okay. Olekemi, that's— I hope I probably did a terrible job with your name. Sorry about that. What could you look for in an application of a VC founder who is at the concept stage? You know, as we were— Mike, do you want to take this one? I've been over talking.

A lot of people Well, are at the concept stage, right? But again, we wanna see that, you know, you are in a position to, you know, take this concept and do a first close from limited partners. So that means that, you know, you have to obviously present well, we're gonna be looking at your background a little bit too, to ensure that you have, you know, something that you can kind of hold onto and pitch to limited partners, right? And then you have to drive in the time to the time availability, right? Fundraising is gonna take 80, 90 hours a week. And in that month 4, month 5, you're gonna be doing 80, 90 hours a week just pitching LPs, right? So, do you have the ability to dedicate the necessary amount of time to close your fund?

[Speaker] 80, 90 hours, I would say, to be fair, not everyone's doing 80, 90 hours, Mike. Now, and I'm not trying to just, Now between other things that they do and the Funding Lab, it definitely gets to 80, 90 hours a week. I would say some— remember we said before experience and hustle. If you're relying on hustle, then it's 80, 90 hours a week. But we have seen like—

Yeah, some of the folks that have experience, well, and this—

Can do it in less, right?

I'm assuming you don't have experience, but if you have experience, experience and you, you know, you invested in 5 unicorns and you're basically, you know, already raising off of that, then it's gonna be much easier for you, obviously. And you're not gonna put in that time.

[Speaker] And not 89, yeah, exactly. So, okay. And we have had a number of big unicorn investors. We've even had people put very unicorn-like companies in their deal warehouse in the fund. To attract limited partners. So, you know, we've seen a wide gamut of ability and background in the program and a wide gamut be successful. Warren, and again, remember to upvote questions you like, everyone. Warren's asking, if I don't get into the cohort, what do you think about the choice between hiring a lawyer? Yeah, I saw this question earlier. And working with a company like Assured to set up a simple SPV. Here's what I would say, like, okay, we don't have all the right answers for you, right? But we've set up a relatively large number of funds and then we've helped a large number of people, now 75 people set up funds. So we're, we kind of know a lot. This is like a dark art. No one talks about how to set up funds. Most lawyers who even claim that they know how to set up funds probably are okay, but not great. So it's really a bizarro, like not, and non-well-known, thing, right? So the good news is it's coming more and more into the light. So it's not as secretive as it once was, but it's still a pretty secretive and exclusive club. So what I would say, Warren, is the following, like, don't do an SPV for a fund. If you wanna do a fund, do a fund. And then, then you asked about a lawyer. The first thing you have to decide is where to domicile. And that's actually a pretty difficult decision to make because it really is dependent on your thesis. And so we spend a lot of time in the program and we even have this pre-curriculum dedicated to the thesis. So I, the first thing that I would say is spend more time than you think is necessary on refining your thesis, because once you have a thesis that feels right for you, resonates with limited partners, it's going to make a lot of other decisions like where to domicile, etc., much easier. The type of fund structure, etc. And then everything else will be more obvious, right? Once you have— so my, my— I'd answer your question a little bit differently, which is spend a lot of time working on your thesis, and then those other questions about where to domicile, who to work with, will be a little more obvious.

Okay. And by the way, I posted in the chat a link to the VC Lab pre-curriculum. Maybe stop start there and that'll kind of help you kind of figure out, is it, do I wanna start a fund or do I wanna just, you know, kind of invest on the side on a part-time basis, which is a whole different thing, right? So feel free to use that.

[Speaker] This is a great next question. Is there an expected fund size or less profitable fund ideas considered? Thank you anonymous attendee for that question. Great, great one. So I'm gonna, you know, most people come in, ah, I want a $50 million, $100 million fund and I'm like, I'm like whoa! Like $50 million fund is very hard to raise. $100 million obviously much harder. Here's the way we— and we have kind of an unconventional way of thinking about fund size but I actually think it opens up the realm of venture capital to a wider audience. And here's this simple rule that we tell everybody okay? If you can wake up tomorrow and make a bunch of phone calls in like a day to your friends, and they said, okay, I'll stake you, and you added that theoretical number up in your head, multiply that by 10, and that's your first fund size. So it's like, ah, wake up, I think I can call Joe and Lisa and Bob, and I think they might give me collectively a million bucks, your first fund size should be $10 million. And if you have two partners and you add it up and it's $2 million, then your first fund size should be $20 million. And the reason I say that is, you know, you probably won't get the amount you think you will, but that to think that you're gonna get 10 times more than that is actually a pretty big hill to climb. It's a lot harder than you think. It does get easier over time, but you also don't wanna be raising for 18 to 24 months. The ideal thing you wanna do is raise for 6 to 12 months, deploy the capital and work on Fund 2 and make Fund 2 a lot bigger. And I've seen that be a very successful strategy. Do you wanna add anything to that, Mike?

[Speaker] Yeah, I mean, so we, that's also dependent on the thesis, where you are, your location. So we've seen funds as small as maybe a couple million dollars in the program and we've seen funds as large as $100 million program?

I think $150 million, right?

Yeah, $150 million. So, so really, it really depends on you, really depends on your experience and what you've been able to do and your thesis. Your thesis kind of drives everything.

We're going to beat you up to make the fund smaller because you're going to find that raising it's going to be harder than you think. So if your fund gets too big, it's going to be difficult for you to raise. Okay, this is another Straightforward, easy question. How many spots have been filled already in the program? Uh, I believe last I checked we were at 74, Mike. Is that right?

74.

Okay. Uh, now we, we didn't accept anyone today. Uh, just I think Mike and I were busy and we have to watch the videos. But, uh, yeah, I, I would expect that we're going to go into the weekend with just over 100 spots filled, and then, you know, working on it Friday, and then, you know, yeah, so there'll be roughly half the program filled before the deadline. Uh, okay, next one. Do you prefer funds with multiple GPs over solo funds?

Mike, we don't have a, uh, any sort of preference there, but If you are considering or are working with somebody, you should have them apply together with you. This would be a really good stress test of your relationship. You know, we've seen some funds, you know, thrive as a result of going through this experience together. We've seen a lot of funds realize that this is not something that they want to be working together on for the next 15 or 20 years of their lives together, right? So, you know, you can use the program to kind of figure out if, if your partner is really committed.

Yes, so the, yeah, that's, that, so guys, uh, this is a stress test for your partnership, uh, that might last 15 years on the inside, okay? So if you start a fund today, most funds are minimum 10 years, but you're probably going to have some extensions so 12 years. And frankly, if you're really pre-seed or seed, you probably should be more like 15 years. So that very first batch of capital is gonna require that you and your fellow GP are gonna be working together for 10, 12, or 15 years. So we're gonna make you 2 or 3 or 4 or 5, do stuff together. And you should watch my interview with, which was admittedly, I don't know why my question and answer asking abilities were kind of limited, but I did a great discussion with Steve Jurvetson. He talked about partner dynamics over the long haul. So you want people that are gonna be similar and yet different from you. And if you want ideas about how that all works, watch the interview with Steve. And this program will test if you can work together. Okay, Gary's asking, maybe I missed it, but what's the upside for the founders at Founder Institute, not founders, but Founder Institute in running this program? Is there any commitments to Founder Institute once the fund is started? As I brought up, the answers are, there's no obligation to do anything with FI and there's no commitments to FI and there's no need to do anything with FI. What— FI being Founder Institute. We will hopefully be friends for many years to come. We'll send you some deals. And that's— I don't know, Mike, do you want anything?

No, no, that's it.

Yeah. Are less profitable fund ideas still considered? That was a part of the previous question we didn't So everyone's first fund is gonna be kinda unprofitable from an operating perspective because you have management fees and carry. In order to, you know, in the developed world, you're gonna be looking at about $20 million per partner in fund size to be, you know, a rich fund. Fund. And in the developing world, it could be $5 to $10 million depending on how developing it is. So, you know, we're not seeing many funds cross that barrier of like living the rich life on management fees. So technically most of the funds that are started in this program are gonna be, you may make a salary, but you're not getting rich off the management fees. 1. Now, if you can get some great investments and get limited partners excited in Fund 2, you can start having, you know, profitable funds from a management fee perspective. But generally speaking, for most new managers in Fund 1, it's going to be a pretty lean existence. Mike, do you want to add anything?

Yeah, and again, it's one— I think he was also— the way I interpret that question is kind of like for the application itself, you know, and again, it's, you know, does your background kind of match your fund idea and what you're doing, right? And that's some of the things we're looking at. So that, you know, that's also important.

Mike is asking, another Mike, I was accepted in the Founder Institute started last fall. Does that help with the acceptance in the VC Lab? No, uh, it might hinder it. I don't know, my, my, my— to be fair, candidly, it doesn't. They're like apples and oranges. Um, the admissions team for the accelerator is run by a woman named Megan who's amazing, uh, and the admissions team for VC Lab is run by Mike and I and And they're very different, so they won't affect one another. What's the ratio of mentors and participants in the past and current cohort? I mean, it depended because the first cohort was smaller than the second cohort, which is probably going to be smaller than this cohort. So I'd say, look, your mentorship is probably going to be— an office hour here or there, and then group meetings with myself and Mike, right? Plus a lot of peer support. If you go for the premium package, then, which is, you know, $3,000 for 4 months, then you're going to meet with mentors and Mike and I on a weekly basis. But, you know, the— so the ratio probably will be 4 months, 16. So what, what would you say, roughly 10 to 1, Mike?

Yeah, at least. So the program is designed— we bring in mentors for various talks and things like that, all right? It's— that's the point of them. They're going to come in here on a webinar like this. We're going to have this type, same type of dialogue that we have here with upvoting and things like that. And we're going to be answering as many of your questions as we possibly can in that hour.

There are a ton more questions, Mike, so let's, uh, literally, I think we have 19 more questions, 10 more minutes, right? As a cohort, are you targeting any geographic composition in accepting applicants? No, but I will say that at this point we're probably more likely to accept a female applicant because I think the ratio of women venture capitalists in this program is a little light, and we want— we'd love to see it be 50/50. Um, so geography, we don't really care that much, but gender we do because there's just not enough women in venture capital. Um, uh, could you please specify breakdown of how the 25 hours per week are allocated? So look, what we've done is the following. We've said, okay, if you want to say— so here's the Taking a step back, if you were to go start a venture capital fund today and you hadn't done one before, it's like, what do I do now? Like, do I pitch? Do I do this? You don't know. So you end up doing things out of order and that ends up wasting time because you might talk with a lawyer and then realize, ooh, it's too early for me to talk to a lawyer now. And I probably talked to the wrong lawyer because I didn't have my thesis down. So you waste tons of time, okay? So what we do is we say, look, we've started a lot of funds. You gotta do this first, this second, this third, right? So the 25 hours a week are the things that you need to do to close in 5 or 6 months the first investment into your fund, okay? Most people, we had a thesis when we started and it proved to be true. It takes most people 9 to 12 months to get to a first close. It's taking our funds 5 or 6 months. Because you do stupid things like talk to the lawyer too early or pitch LPs too early. So we sequence it all out and allow you to consolidate your time. So the 25 hours a week is like working on closing your fund. Okay, what's the gender split in the previous cohort of 75? I would say what? 30% women?

Around, I don't know off the top of my head, but it's around that. You know, again, it comes down to like the how many applicants we get.

No, well, previously I think it's around 30%. Right now we're actually below that. I think it's around 10 or 15%. Now we haven't accepted everybody that we plan to. I'd like to see this cohort get 30 or 40%, so hopefully we can, we can get More women applicants, more women enrolled. Is there a list of previous fund alumni for reference? Sort of. So we're profiling— not— so raising a fund is not something that you can do publicly because in most jurisdictions around the world that's illegal. So we've profiled about, I don't know, 10 or 15 of the graduates that have given us consent to do so at our position where it's legal, blah, blah, blah, blah, blah. And you can find that at our blog. Maybe, Mike, if you could put a link to that, that would be great. Um, will we get a list of LPs? No, but you will pitch at events where LPs are at, and then we'll help facilitate, um, Introductions. Would references from potential LPs, accelerators help in your selection? No, not really. We're watching your video, we're reading your answers to the questions. Of course, like if there was an LP in the video that said they're gonna invest in you, that would help. But, you know, we don't need that, right? That would be going above and beyond. Unnecessary. Do you have any experience launching a fund in the Middle East? Uh, so would there be high value in mentorship in this specific region? Yeah, I mean, Mike and I have not launched a fund in the Middle East, but I pitched tons of Middle Eastern, uh, LPs, and we have funds that have launched in the Middle East that we've helped. In fact, we have, uh, what, probably 10% of the current cohort are launching in the Middle East all sorts of different kinds of funds. So we would— we have a big Middle Eastern contingent. What's in today's world average GP commitment for this size of fund under $15 million? You know, average GP commitment, that really is all over the map. So we see—

I would—

you know, you have to think of it like you're probably going to have somewhere between 40 and 100 LPs in your fund. So at $15 million at 100 LPs or less, with 99 is the legal limit in America, you're probably looking at $150,000, but you're probably under that. So your average would be about $250,000 average LP size in a $15 million fund. Okay, can I update my pitch video for the VC Lab application? Yeah, you might need to email us and just let us know, then my team can go in and edit it. I've been talking so fast, Mike, why don't you take one out of a sip of water?

Am I able to update my application, my hours committed, estimate did not reflect. We look, whenever we see that somebody did not commit for the number of hours, we actually send you an email saying, hey, are you sure, you know, you sure you can only commit that? So we should have already sent you one if you haven't gotten one. But yeah, you can change that. Can you connect us to alumni to help us learn more about their—

they're, they're saying nice things about us on social media. So just if you want to go to LinkedIn, Search VC Lab, you're gonna see all sorts of people talking about it. I mean, I haven't had, I don't think there's anyone who's had a negative experience, but feel free to find them on LinkedIn, very easy, and chat away. So look, it's a structured program and that's not gonna be a fit for everybody, okay? I'm just gonna throw that out there. And that's okay, it didn't cost you any money, it doesn't cost you, you know, I just felt a little, eh, I don't like it, okay, you leave, right? So if it's, if, but I think most people really enjoyed the program and so hopefully you'll get a lot of positive feedback, which is why we have, you know.

Look, we're evaluating 1,500 applications and it's probably gonna be 2,000 by the end of this week, right? So the, we're not gonna be able to broker or do anything before that to try to do this for, especially for a free program, right? So it's just time-wise, we just don't have the ability to do it. So just think, right?

Do you have any experience? Uh, okay, this is another Middle East one. We answered that. Are you, uh, launching impact and opportunity zone funds? Okay, so yes, I mean, you gotta sign something— well, not sign, but you gotta agree to something called the mensaria. So to get into the program. So that means that we care about impact funds, and then we've actually launched Opportunity Zone funds.

Half of the funds that have graduated VC Lab have some sort of an impact angle so far.

If the average first close is $1.5 million, then I suspect the most of the investments that the fund are going to be at the seed or pre-seed level. Yes. So I would say we do up to the Series A. So there's some Series A funds, but the majority of funds are seed or pre-seed. Not a question, but thank you. Okay, thank you. How many graduates from your last cohort met LPs through VC Lab who ended up writing checks for their first close? I don't know.

I would say— We don't really track that, to be honest with you, right? Like we provide opportunities for that, but we don't really track.

We haven't even asked. I mean, it's not zero for sure. It's like quite a few.

But at the same time, I wanna be very clear. If you're joining this program because you think you're gonna get introductions to LPs, then you'll probably fail, right? Like you need to actually drum up your own network, do really well with that, and hopefully we can accelerate some of that for you, right?

Yeah, our goal is to accelerate. And I know that we have caused LP-GP relationships, but A, we don't track it. And B, as Mike said, if you're not able to get your own LPs, in the very best case, we might be able to generate 10% interest, which means you need 90%. Okay, how many cohorts do you enroll per year? Hopefully 2. That's the goal. Do you need to have a fund already before joining? Absolutely not. In fact, that would probably be a bad idea because you start the fund during the program. Are there LPs from specific communities that are looking to invest in their community? Absolutely. In fact, I would argue most of the LPs that we engage with have a thesis of their own that they're interested in pursuing by engaging in VC Lab. Do you have any— do you have to have a fund before joining? We answered that, no. Okay, need a video. So we like to have a video from all the partners in the fund because— so you can do that with Zoom. This is being recorded. We're gonna share it out. You can see Mike and I. So just get on a Zoom with your partners, hit the record button, and then it sends you a link and submit that link as your video. It couldn't be easier. I do, you know, you don't have like— thankfully in 2021, recording a multi-party video is possibly the easiest thing you can do. Because the pandemic has forced us all into video. Is there an age requirement? Interestingly enough, we have a 19-year-old female, but did she do a first close? Do you know, Mike?

I'd have to double-check.

I think she has. We have a 19-year-old female fund manager from Indonesia that graduated. She's the daughter of a friend of ours, and I think she did her first close. I think it's what, a $10 million fund for Asia?

I think so.

Yeah, yeah.

But so, you know, is a GP commitment mandatory? So there's a couple ways to do this. We'll cover this in the program. You might be able to overcome that with a warehouse deal that you have invested in. So that's another way to kind of manage through that. But in some form Yes, you need to show some level of skin in the game in your fund, right? I mean, you know, otherwise you're trying to get other people to invest in you, like, they're gonna be like, why aren't you investing? So you gotta have some, some kind of skin in the game.

All right, so let's wrap this up, guys. We got lots of questions coming in. Thank you so much. And we're gonna send the video out, and there's some questions about process, so let me leave it at that. If you have a question that we didn't get to here and it's like something that you can't find on the website, because I'm going to try and produce an FAQ, you can email in to any of the emails you receive. And then we have a small team of people that are reading all the emails and we'll get back to you with an answer via email. Okay. But, you know, I think we covered almost every big question on the call today. Next, we, we have 1,500 applicants. We probably processed under 500. So, you know, if we haven't gotten to you yet, be patient. We, we're gonna send you some reminder emails if you're missing something. If your time commitment's too low or your video's not done, we're gonna send you remind her about that. And then you're going to hear essentially between now and March 1st, either, you know, you're accepted, uh, which will come— we ask, we'll send you an acceptance email. If you're accepted, we want to know that you agree with the Mensarius Oath, so we want you to share that you agree with the Mensarius Oath. Right? We used to ask people, do you agree? And everyone's like, yeah, yeah. And I believe that they do, but we've gotten so much larger now. I want you to show me that you agree with the Mensarius Oath by sharing it on social media. And then, you know, thumbs up after you're accepted, you share on social media, you agree with the oath. You're in, okay? That's the process. Now, if we don't accept you for one reason or another, don't take it personally. We'll invite you to apply to the next cohort. And, you know, if there's— people drop out in the first week, they, for whatever reason. So there's even a chance we do let people in. So don't fret. There'll be opportunities even to get into this cohort with some early dropouts, and we'll invite you to the next cohort later this year. Mike, do you want to add any other closing thoughts?

Yeah, so the application deadline is on the 15th, so that's this Monday. So if you're thinking about applying, make sure that you get that in before then, or on, on Monday at the very, very latest. And we're looking forward to reviewing your applications, and hopefully we get to to work together soon. Would be really excited to work with you.

Yeah. All right, dinner time, and thank you so much, everyone.

Bye, everybody.