Cohort Meeting Recap: Finding Your Way Out of the Jungle and Securing the Founders Agreement
Halfway through the second phase of the 50:50 accelerator program, the cohort had the pleasure to engage with Ben Wiener and Ariella Dreyfuss.
Entrepreneur Ben Wiener is the managing partner and founder of Jumpspeed Venture Capitals. Wiener presented on the “product to market” process, guiding the cohort in their journey of how they can transform their startup into a real company. He explains that even if they are a registered company, they have not earned the right to call themselves a company until they have achieved a scaleable business model.
Wiener uses the jungle as a metaphor to describe the startup environment: a temporary organization is conceived in the jungle as you begin to look for a way to “get out of the jungle.” Once you do, you step into the off-road, then onto the highway, where you finally discover a scalable business model. He emphasizes that every decision you make concerning the people on the startup team, investors and such, has to be in service of “the god of product market fit.” In Wiener’s experience, everything leads back to the product-market fit. To have a successful startup, one must understand what that looks like. Mark Henderson in a 2007 article affirms that “the only thing that matters in the lifetime of a startup is product market fit.”
Who determines the product-market fit? Wiener contends that it is not the investors, but rather the market and the consumers. Until you introduce your product, you will never know if it is “fit” for the market -- even after receiving results from your survey or other forms of market analysis.
Ariella Dreyfuss is a partner of Barnea Jaffa Lande & Co. in their Corporate and Commercial Departments. Given her field of expertise, she carried out her presentation on the legal dimensions of launching a startup.
She begins by discussing the issues related to “Founders’ Relationship and Founders Agreement'' between the partners of a startup. Dreyfuss recommends finding a suitable and qualified partner, someone whose own goals align with yours. She notes that investors in Israel typically gravitate towards a standard package: if what they see ticks the box in their mind, they will invest. Having 3 founders for a startup is usually ideal.
The goals of a “Founders Agreement” is to ensure that the roles of the respective founders align with what is on paper and to outline each partner’s commitment, in terms of time and money; investors typically expect full-time commitment. In essence, the idea of drafting a “Founders Agreement” and making sure that everything is discussed and settled in the early stages of the startup is to have all the documentation and expectations wrapped tidy and neat for investors when they approach you and decide to put money into your project.
Dreyfuss suggests that there are various types of investors: Friends, Family and Fools (FFF), Angels, VCs, and IIA. Startup founders should choose the “right fit” and secure “smart money.” They might also consider bringing an investor on-board, as the added value of such a move includes receiving additional benefits from the investor such as continuous fund, industry expertise and input, connections, and being in loop with their manufacturing-distribution-marketing networks.
Written by: Adi Nassar & Salina Kuo