Between 88mph Fund and Accelerator Program and Startups funded by 88mph and admitted to the Program hereinafter referred to respectively as 88mph and The Founders

In addition to the terms below, all startups must upload together with their application:

  1. a six month budget for a fictional $20k investment
  2. their cap table venturehacks.com/articles/cap-table
  3. their vesting agreement (signed by all founders). See a great description and suggestion here: www.feld.com/wp/archives/2005/05/term-sheet-vesting.html (thank you Brad Feld)

The Founders are agreeing to:

  • be committed full-time and attend the whole program
  • incorporate a company within 3 months from program start and make sure that everything you’ve agreed to here, is put in the shareholders agreement of the company
  • everything you produce as a result of 88mph program, and everything you bring into the program should be part of your incorporated company’s assets
  • keep accounts of all expenses, incl Mr. Taxman
  • report plans and progress every week through a personal update with an 88mph Program Manager and a brief write up (min 250 characters, max 500)
  • check before using 88mph brand, logo, name
  • share information with 88mph that may affect them, their reputation and their employees
  • when selling a controlling stake (above 50%), the other shareholders have the right to sell at the same price
  • declare any outstanding litigation or other legal obligations that may negatively affect the startup
  • give 88mph min. 1 seat on the board if 88mph wants one
  • the CEO appointed by the startup can’t work elsewhere or participate in any other projects during the program that may negatively affect his/her dedication or time commitment to the startup. All employees report to the CEO
  • watch Back to the Future before commencing the program and acknowledge that it is the coolest movie ever made. #greatscott

Not do these things without asking 88mph first:

  • dissolve your startup
  • strip, sell, or give away the startups assets
  • issue more shares
  • make loans (except if that is your business)
  • take loans (except if that is your business)
  • pay out dividends
  • raise your salaries

The Founders are agreeing not to:

  • be criminal or engage in any illegal activities
  • cook the books, lie, or cheat
  • have liabilities, incl. tax liabilities
  • work for others during the program
  • sell shares without first offering them to your co-founders or 88mph

The convertible loan looks like this:

Q: What is a convertible loan?

A: Its a loan that can magically disappear and then reappear as shares in your company. BOOM.

Q: And WHY does 88mph use this instead of investing like normal people?

A: Having foreign shareholders is complicated and time-consuming for The Founders everyday run of business. I.e., opening bank accounts requires information on all your companies shareholders that would take time and expenses to procure. Issuing new shares, or updating share register, costs time and money that could be saved with the use of a convertible loan. We would like The Founders to spend their time concentrating on the core business and building stuff while in the program instead of messing around with lawyers and bank regulations.

  • loan is xxx
  • no interest
  • converts to xx% of all shares
  • issues money to you in 3 installments, last 2 conditioned on full participation
  • 1, 2, and 3 payable respectively on day 1, day 30 and day 60. Unless The Founders really need it earlier
  • follow-on investment rounds under $100k will not affect share % of 88mph
  • the loan automatically becomes shares if you get follow-on over $100k
  • or can become shares whenever 88mph wants

Disclaimer: in case you’re wondering, this is not really a legal document.

@88mph.ac

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