What a horror story. What sort of program offers $100k to that many groups and doesn't follow through? "Whoops, we were $500k short."
That goes beyond just being embarrassing.
That goes beyond just being embarrassing.
Not to be facetious, but: A program which doesn't have as much money as they're offering people.
The founders of Bootup Labs put some of their own money in, but they're raising money (or trying, at least) from VCs for the rest. They're paying themselves [EDIT: or not -- see reply from dannyrobinson below] from the $50k/startup management fee, not just from expected future profits.
Are there any other startup accelerators which do things this way? I'm not aware of any.
What?!
It's a very effective way of protecting themselves from downside risk -- if all the startups bomb, the startup founder have nothing and the investors have nothing, but Bootup Labs still has their $50k/startup -- which might be part of the reason why they've had trouble convincing VCs to invest. I think many VCs would be skeptical of a startup CEO who said "we have no revenue and a completely untested business model, but we're going to pay ourselves $100k salaries with your money".
Either sell me a service or give me cash for equity. Don't do both.
It's weirder here due to the small scale of investment relative to the costs, and the non-cash services, but not totally implausible.
Now if Statusly was only in the program for 2 out of the 8 months, then it seems like the founders could be owed around $35k (50k2/8.95) for the money that they paid to be in the program for the rest of the 6 months.
My impression from reading all of this is that Bootup Labs is a scam. At best, they have a significant conflict of interest at the heart of their business model.
My apologies. I had understood that you were drawing a salary from Bootup Labs based on a conversation I had with Boris a few months ago, but I can't remember exactly what he said, and it's quite possible that I misinterpreted him.
Even if you're not personally getting paid anything, I think $50k is a rather generous fee given that other startup accelerators don't seem to need any such fee at all.
At this rate, what do you care if the startup succeeds or fails? You get $50k no matter what.
I can't fathom how you think this is a good deal for anyone but you. This kind of behavior is why vancouver will be better without you.
Good luck.
$50K for 8 months is a lot of rent and accounting services.
If the Management Fee pays for the managers' salaries, like Danny and Boris Wertz, then they are not necessarily incentivized to have quality startups in each cohort... more important to Bootup in that circumstance is having enough startups to cover their overhead in each 8 month cycle.
Should this turn out to not be the truth, even the slightest unintentional misappropriation of funds for a pizza could end up costing your company a great deal.
Maybe I've been around the gringos too long.....
The way it works is that you get 50% of your R&D expenses back from the gov't, in cash, several months later. To claim it, you have to write reports explaining the R&D value of each project. Besides the obvious bureaucratic overhead, it ends up affecting the organizational structure of the company. It distorts the way the business is run, maybe by only 20%, but that's enough to make you lose in the market in the long run.
I used to work at a startup that makes no money at all. They asked me to sign some sort of "fake" stock options as part of the SR&ED requirements. Of course the numbers were meaningless (pennies or whatnot). So I'm very interested on how this works.
What if the startup is a one-man show, making money and start to pay himself? Sort of like owner-but-paid-annually? (Or maybe a one-man consultant).
So let me get this straight, let's say a startup has 4 employees and each employee got paid $50k annually. When the SR&ED is done correctly, the owner can get at least 50% back from the salary alone?
Can rent be substituted as mortgage (say working on your own garage)?
Oh -- hardware purchases and the like don't count, and you have to be able to prove the salary was paid, so as far as I know there is no game to be played with stock options.
Odd, we got to put the entire amount of the Tesla grid that we put together towards the SRED credits. Having said that I just filled out the paper work and handed it to the lawyers and accountants, perhaps they took it off afterwords?