Purpose and Progress
Entrepreneurship is a global phenomenon, with socially and environmentally conscious (a.k.a. impactful) startups launching all around the world. These mission-driven for-profit businesses are solving the important problems of the world: poverty, hunger, health, unemployment, sustainability and the environment.
Few accelerators and funds support such startups. Those that do are most commonly organized as nonprofits that do not understand the realities of starting, funding, and sustaining for-profit businesses.
In 2012 Fledge started filling this gap, raising and investing nearly $2 million in 82 fledgling companies hailing from 22 countries, providing guidance, mentorship and training along with a small amount of cash, creating an investment portfolio whose value is now being harvested, so far on track to prove doing good can not just benefit the world, but also earn a market-rate return for investors.
The Fledge accelerator is based on the best practices of the highly successful TechStars accelerator. In short, Fledge receives applications from around the world, accepting just 6-8 into each 10-week session, less than 3% of the applicant pool. Fledge makes a small investment in each fledgling, with the investment uniquely structured as revenue-based equity investment. This provides a market-rate return without waiting for or requiring a traditional “exit” by acquirer or IPO.
History and Expansion
From 2012 through 2015 Fledge operated solely in Seattle, Washington, USA, with two sessions per year, each with 6-8 participating companies.
In 2016 Fledge began expanding, first to Lima, Peru with Fledge8 (the eighth-ever session), then in 2017 with Fledge10 once again in Lima and Fledge11 in Barcelona, Catalonia/Spain. These first two cities are copies of the Seattle program, open to all entrepreneurs from around the world, working in any sector.
For 2018 two new cities are being added, and with them the first two powered by Fledge programs that are not exact replicas of Fledge Seattle. January 2018 is the first Global Impact Accelerator Program in Vancouver, BC, Canada, operated by Spring.is. This is Canada’s first accelerator tied to its Start-Up Visa program, and the only partner in that program working on impactful startups. Then June 2018 is the first ECOSTAR Nature Accelerator, operated by an EU-funded partnership between ETIFOR and the University of Padua in Padua, Veneto/Italy. This program focuses on environmentally conscious startups, primarily from Europe.
On the queue for expansion is Lisbon, Portugal, in partnership with Impact Hub Lisbon. Plus conversations are ongoing with people and organizations in New York City, Hong Kong, Nairobi, Accra, Bahrain, Dubai, Sao Paulo, Quito, and Anchorage, amongst others.
How The Accelerator Works
The modern business accelerator was invented in the “tech” sector, perfected over the last decade by Techstars, which as of mid-2016 operates 29 programs in North America and Europe. Since 2012, this model has proven to also work in the impact sector by Fledge, the conscious company accelerator.
Four key features distinguishes a modern accelerator from a more traditional incubator.
- Open applications, attracting talent through a mix of marketing and recruitment.
Fledge [CITY] will be focused on startups from [sectors and geography]. Nonetheless, applications will arrive from around the world as entrepreneurs seek quality help when offered.
- A cohort of 6-10 simultaneous participants, who through the program form a peer-network of support, and who join into a growing peer-network of fellow entrepreneurs who they can turn for support.
Fledge [CITY] will invite seven participants per session, focusing quality over quantity.
- A fast-paced, high intensity program, which forces companies to focus on improving their companies, and which attracts hundreds of outside “mentors” to provide guidance to those companies, far more help than is provided by the accelerator staff.
Each Fledge [CITY] session will last for 10 weeks, inviting the 480 existing mentors from the Fledge accelerator network to help the teams, along with funders and supporters from the [YOUR BRAND] network, and other experienced entrepreneurs from the [YOUR CITY] area.
- A cash investment into each participant, creating a long-term relationship between the graduates and the accelerator program, providing years of follow-on support for these companies beyond the limited time within the accelerator program.
Each Fledge [CITY] fledgling will receive [$15,000-$25,000] in cash. During the program and after graduation these fledglings will be promoted to local and global venture funds, foundations, and impact investors.
The first Fledge [CITY] session will take place in [20XX], repeated annually for at least five years.
[YOUR BRAND] and Fledge
Fledge [CITY] is a partnership between [YOUR BRAND] and Fledge Global. The program will operated out of [LOCATION] by a [YOUR CITY]-based team managed by [YOUR ORGANIZATION], replicating the basic structure of the Fledge accelerator, tuned to the needs of the target companies.
The program can be named Fledge [CITY|TOPIC] or it can be [YOUR BRAND], powered by Fledge. The choice is up to you, Fledge is happy either way.
Joining the Network
An accelerator is not a difficult business to launch and operate. If it were, there would not be thousands of accelerators in the world. That said, only a handful of these programs have global recognition, and few have managed to operate ten sessions or to stay in business over half a decade. The challenges for accelerators come in having a sustainable business model for the accelerator itself, and in overcoming the inevitable hurdles of learning how to successfully operate the accelerator as a business, providing a high level of quality and service to the entrepreneurs.
The shortcut between wanting to help entrepreneurs and operating an accelerator that truly helps entrepreneurs is joining an existing accelerator network, rather than starting one from scratch.
Joining the network means starting with a proven business model, a proven curriculum, a large and global mentor network, access to a collection of like-minded accelerator directors, and an established brand name.
What Fledge Doesn’t Provide
Fledge doesn’t provide everything you need to launch. You need an organization to operate the program, office space sufficient for 10-15 people to work, a local team to facilitate the program, and a set of local investors to cover the cash investments into the fledglings as well as the costs of operations.
It will also help if you have at least a few dozen volunteer mentors who can meet your fledglings face-to-face, and some local partners to help recruit local applicants.
A Partnership, not a Franchise
Joining the Fledge network means joining a global network of partners who together are building the Fledge brand. This is not a franchise agreement. Fledge Global does not envision or want dozens of copies of Fledge Seattle. The vision is instead a collection of varied accelerator programs, with the constants being a focus on mission-driven for-profits, investments into those participants, and an ethos of providing the best-possible experience to entrepreneurs.
|Branding||You choose whether to be Fledge [CITY|TOPIC] or [YOUR BRAND], powered by Fledge|
|Marketing||Fledge.co, http://fledge.co/blog, Newsletter, Facebook, Twitter, YouTube, LinkedIn||Add content to those feeds|
|Recruitment||Outreach to various global partners, Fledge profiles on multiple online lists||Outreach to local partners. Recruitment efforts directly with entrepreneurs.|
|Selection||Fledge screens the top applicants, and interviews as needed. Fledge provides a screening process and ranking ontology.||You screen all applications and interview all promising applicants. You make the final decisions.|
|Contracts||Fledge provides copies of our Participation Agreement and Stock Purchase Agreement||You edit the agreements to fit your local laws and regulations|
|Curriculum||Fledge provides a full 10 week curriculum including online through The Next Step series of books for entrepreneurs.||You add guest speakers and anything else you want to add.|
|Mentors||Fledge invites its mentor network to meet your fledglings.||You add your mentors to the network.|
|Demo Day||The Fledge curriculum includes three weeks teaching story telling aiming for the fledglings to tell a TED-like talk on-stage. Videos of those talks are posted to youtube.com/fledgellc.||You organize and video the Demo Day.|
|Alumni||All fledglings are listed on fledglings.fledge.co. Fledge tracks quarterly revenues and employment for all alumni.||You provide continued support and introduce your alumni to investors. You and your inventors are welcome to co-invest in any fledgling gradate.|
|Capital||For all of the above services, Fledge charges a license fee of $7,000 per session, plus a one-time fee of $700 per fledgling, plus 1% of the profits from your investment fund.||You raise the capital needed to invest $15,000-$20,000 per fledgling and to cover all your operational costs.|
Fledge [CITY] should be a company organized to both operate the accelerator as well as invest in the participants of that program. This can be a subsidiary of your existing organization. Funds for both of these activities come from a common pool of capital, with the operational expenses embedded within the investments.
Fledge uses a revenue-based structure for its investments. The accelerator buys shares in the company, and the company in turn uses 3%-5% of future revenues to repurchase those shares at a price which provides a [2x-3x] return on investment (inclusive of both cash and in-kind services).
This structure aligns the interests of investor and management. Both sides want to see revenue growth in the company. Both want revenues to be sufficient to be profitable. With the embedded redemption, investors get a return on investment without pushing the company to sell (or what more commonly seen in the organic and natural food market as “selling out”).
In these revenue-based investments, a small percentage of the share are no included in the revenue-based redemption. This “residual” equity is purposefully left as additional upside in case of an acquisition.
If you are interested in joining the network, we will provide you a draft financial model to help you understand the details of the capital flows, and can provide you an outline of an Executive Summary which you can fill in and share with your local investors.
To start off that process contact us.
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