+ Equity for services? How much are you asking for?
For early-stage startups the baseline ask for a FKTRY CREATE engagement is generally 5% of fully diluted equity. Depending on requirements and needs, and for later stage companies, the amount may increase.
We recognise equity is precious and that your company could one day be be worth millions. The point is that it’s value we’re going to create together. In the cold light of day it’s a Mexican standoff between the business value of the collective creative expertise of proven industry leaders versus a great idea in a high-risk, highly illiquid, investment category. The deal ensures alignment of interest and outcomes as we become partners and investors in select startups.
Equity is emotional, but at the end of the day it’s a matter of logic. The deal simply has to make sense: does the exchange create more value in your remaining stake than you have given up. Or 1/(1 - n) as YC Founder, Paul Graham puts it this way in his classic ‘Equity Equation’ piece.
+ Who are these experts?
We provide the startups we partner access to an unprecedented pool of talent. FKTRY consists of full-time Creative General Partners and an extended network of Creative Limited Partners who contribute project by project. All of them are respected leaders in their field. They are people who have built a lot of the products and services you know and love, people that you would find hard to recruit. You won’t find them in a consultancy and you are generally unlikely to bring under one roof. Crucially they are all ‘expert-practitioners’ meaning they still know how to practice their craft and execute.
+ How much of their time am I buying?
Buying time is a crappy model for everyone and fundamentally misaligns incentives. With FKTRY PROJECTS you’re exchanging equity for a team’s collective expertise, not their time. That way, as investors, we’re perfectly incentivised to do the right job. Given we’re delivering in return for equity we’re going to be involved for precisely the time and depth required to make the impact and then get out of the way.
+ Why short-term and not long-term?
FKTRY CREATE is her to get you to a valuable 1.0 or 2.0 and ready for scale and investment. Ultimately YOU need to own your product and that means being self-sufficient as soon as possible. Seasoned investors aren’t going to be confident about investing in a startup whose product is outsourced. So it’s actually important for us to get out of your way. Consider us a jump start for the short to medium term, and a valuable, smart investor and partner beyond that.
+ How can you afford to do this?
Under the Creative Capital Studio model, the operations of the studio are funded. That allows us to pursue venture based deals of this nature rather than be slave to short term thinking and pressures.
+ I’ve got an idea for a startup…
That’s great! Whilst we love early stage, we are not focused on zero to one. If you’re truly dedicated to solving a problem then you’ll find a way to realize it in some way. With few exceptions we are more likely to work with startups that are under way, or with second time founders. We are of course happy to hear from you and to provide any advice that helps you along the path.