The Institute collects a small percentage of warrants in participating companies, and the majority of the returns generated from these warrants are distributed to the Founders and Mentors participating in the program. In other words, a participating Founder can make money from the success of his or her peers, and vice versa.
Why are we doing this?
- First, the Institute wants to see every Founder in program get financial benefit from participating. If the Institute can hit the goal of launching 50 to 75 companies in the first Semester, then the odds are quite high for a return from the pool.
- Second, the Institute wants to encourage genuine collaboration and cooperation among Founders and Mentors in a Semester. By sharing the upside generated from a Semester, the Institute hopes to create a financial incentive for constructive behavior.
- Third, the Institute wants to positively incentivize each participating Founder to contribute to the warrant pool, versus mandating a contribution and including onerous protective provisions. Founders in the program should want to issue the warrants because they get value from being in the pool.
The warrant pool is one of many attributes that makes the Founder Institute unique. You can learn about more unique traits of the Institute in the FAQ.