FounderFuel, who started a program to send several graduated start-ups to Silicon Valley in association with the Canadian Technology Accelerator (CTA), has announced a significant change in their spring 2013 enrollment program on Wednesday. According to this latest update, each candidate in this program will now get $50,000 instead of the $25,000 that FounderFuel had announced earlier. However, in exchange for the increased funding, the Montreal based start-up accelerator will demand 9 percent equity instead of its current 6 percent stake.
Apart from this important change, the rest of the benefits and advantages of the program will remain the same, including meeting with the mentors, work space in Silicon Valley, an additional $150,000 from the Business Development Bank of Canada (BDC) at the end of the term for venture-ready start-ups and much more.
Talking about this significant change in the program General Manager of FounderFuel, Ian Jeffrey said during an interview, “We just announced that FounderFuel teams will now receive a $50K investment on Day 1 of the program (vs. $25K in the past) in exchange for 9% of equity (vs. 6% in the past). Although the value of the mentorship provided by FounderFuel far outweighs the capital investment and the valuation, this places the company valuations north of $550K (vs. just over $400K in the past). That’s a giant leap!”
When Jeffrey was asked whether FounderFuel has increased the amount from $25k to $50k because they thought it was not enough for the graduated start-ups, his reply was, “not at all”. This means that FounderFuel has taken this step themselves rather than after receiving any complains about it, which is a fine move.
To update, the overall package that FounderFuel and its associate CTA are offering to future teams is as:
$50,000 against 9 percent equity right on first day of the program.
$150,000 in convertible debt on demonstration day after finishing program.
Exclusive perks and discounts of $150,000.
Demonstration will be made in front of 800 people, biggest event of its kind in Northern America.
Free workplace in Plug And Play or RocketSpace (Silicon Valley) after demonstration day.
Meetings with experienced mentors, including entrepreneurs, senior executives and VCs.
Source: FounderFuel, MontrealTechWatch, TechVibes
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