Frequently Asked Questions

For Entrepreneurs

What are the benefits compared to doing the business on my own?

A separate section covers the benefits of participating in the Openfund.

Where do I apply?

The applications page provides information about the current call for proposals status and important dates.

What are the criteria for accepting a proposal?

Out of the many factors that we will be looking into the following three are perhaps the most important:

1. Team

   We consider the team as one of the most important factors for the success of a startup. We are looking for committed founders with excellent technical background and a good sense of what it takes to run a real business.

2. Innovation

   We aim to fund disruptive technologies that bring a new and innovative element to the market they target. That does not mean that your ideas will have to be new in their entirety but they will need to have a healthy amount of innovation.

3. Market

   We are a fund focusing on high-tech. Our primary focus are investments on Internet and mobile related startups. Proposals for other markets will also be considered but are less likely to be selected. In order to leverage on this fact, we would like to fund ideas that are not limited to a particular geographical market but have a global appeal.

What stake do you require for the said investment?

The Openfund executive board participates with 5% in the new startup. The investors also take another 10%, totaling a 15% per company.

The 5% stake for the Executive Board is way too much. Why?

We want to be your partners, in every way. If all members of the Executive Board hold a (small) stake in every startup the Openfund invests on, they will be more committed to see the startup evolve and develop compared to the scenario where members will get paid regardless of how well the companies do.

I see 7 people in the Executive Board. Aren't they too many?

The Executive Board structure is such to ensure the Openfund work load is spread evenly and flexibly. Furthermore, the diverse Executive Board ensures a wide range of expertise and resources that can be used to support the startups. Including members resident in the US and the UK further enhances the Openfund support capabilities and its networking reach.

Why do you make a valuation of the company in advance?

This isn't about what your company is worth in day 0. It's about the things we'll be doing together to build your dream. Don't look at this as a valuation. It's enough money to get you started (although we'll guide you into getting further funding in various ways), and getting the Openfund's Executive Board as your partners. And that means partners in every way.

Isn't four months a bit too quick even for an internet startup?

We believe four months of full time work should be enough to get a prototype product out. Once this period ends a search for a further round of investment will begin.

Why would I entrust you with my idea?

There's a number of reasons really to back this:

1. We are participating in this with our names, not a faceless construct. Even if we had the intention of stealing your idea and adopting it as our own - or even leaking them to third parties - it would be impossible to do without it becoming known and irrevocably destroying our reputations.
2. Even if someone decides to copy an idea you have been working on or thinking about, he will be at least a few steps behind me.
3. If you came up with the idea, then you are capable with coming up with more of the same quality. Most companies that get funding later realize that they have to change many parts of their business plan along the way.
4. Your team is most likely the best team out there to flesh out your idea. We'd be stupid to pick another team to do what you're already great at doing.
5. The internet is choke of full ideas. In fact, the same idea is very easy to be had by more than two people. The whole value lies in the implementation, not the initial idea, and this is exactly where we will help you excel at.

Do you provide incubation facilities?

With respect to space, Microsoft Hellas is donating a generous amount of working space for limited spans of time. We'll also hook you up with other office hosting deals and so on, but seriously that's not a difficult thing to handle.

With respect to other things such as helping you with legal, accounting and other details, the answer is definitely yes. We will do whatever it takes to get you to work exclusively at what your main skill is. Beyond that however we're not a flower garden and we won't be mass producing pansies. We will guide you into acquiring the skills and solving your problems, but you will have to take the decisions and do the phonecalls.

Do you throw more weight in innovation or profitability?

In an ideal world these should be intertwined, but they're not. While we believe that innovation is core to making profit on the web, but we will not be funding research either. Depending on the availability of ideas we reserve the right to foster the ones we believe are the best for all involved parties.

Do you accept groups of 1 member?

Absolutely not. This is too risky for both you and us. Find people that you trust and that complement or support your skills. Well rounded groups will be given a better chance for both qualities.

Do you take in applications of already incorporated ideas?

This is complicated but solutions do exist. It depends on the maturity of your effort and the status of your intellectual property. We don't want to get in IP battles and we don't want to undermine the value of existing work either. Get in touch with us and we'll work out something.

Will you be pursuing public funding through state or EU?

Yes, and we have made some choices regarding the fund's structure so that getting such support will be easier. We will guide and prepare each company to acquire as much public funding as possible. However we would like the entrepreneurs participating to avoid handling this themselves. Public funding can be toxic, and we have seen many times companies loosing their competitive edge, as devolve into entities that "crunch" public funding.

When and how do you plan to exit your investment?

It would be irresponsible to answer this in advance. We will remain with the company as long as the company requires our presence. Exiting the investment too early would reduce our vestment towards it and send a wrong message to the investors of the next round. Exiting too late would potentially create conflicts with other investors. We want you to succeed and take our decisions based on making that happen.

Exits on our part are most likely to happen by selling our stake either to your company's management, or to the next round's investors.

What happens if you find less appropriate-quality ideas than five per round? Do you fund less than five per round?

We will not fund anyone just to fill our slots. We don't have any such obligation towards our investors, and you shouldn't file an application for funding based on any such hopes.

What are eligible expenses for the company to spend the 30-50K they will be receiving from the Openfund?

We generally encourage cutting costs as much as possible, and we will provide guidance and free resources from our network of partners and advisors whenever possible. Here are some indications on things that you should be able to buy using the investment money:

1. Hardware
2. Software and software licenses (Although even commercial software can be free using the right deals)
3. Bandwidth, hosting and computing resources costs.
4. Living expenses (a small amount)
5. Outsourcing services for specific exotic or specifi needs, such as web designers or eye tracking etc.
6. Promotion and marketing (to some extent - see below too)

What we can't allow:

1. Hiring contractors to do the job for you.
2. We are reluctant for office space and equipment. If such resources are required we will seek to cover them by other means (via our partners, sponsors, advisors, etc)
3. Promotion and marketing. We expect entrepreneurs to be creative in finding ways to promote their products and company - saving money to be spent on other issues which cannot be circumvented. Again our partners will help with getting you coverage too.

Should I fill in the application form in English?

By all means yes. We will be calling in advisors and investors to review them, and the common denominator is indeed English.

For Investors

How can I invest through the Openfund?

The fundraising process is expected to remain open during the lifetime of the fund and we especially welcome investors with an entrepreneurial background willing to participate with very small amounts.

Why would I want to invest through the Openfund?

The construct provides numerous services for all the involved parties. Two are of great importance to potential investors:

1. We provide management and extensive services to all the companies that will be created on a very broad set of fields
2. Investors will receive a smaller stake in 5 companies instead of one. This spread is essential to amortize the investment against the inevitable statistical failures of some of the start-ups.

Whom are you expecting investments from?

Anyone can invest with the only restriction being in the minimum amount (30K euros). Anyone means individuals, corporate entities, VCs, banking institutions, to name a few. The Openfund will also pursue options of matching private investment with state or EU money.

What happens to the investors' money in the 'less than five ideas per round' scenario? Is it returned to them?

During the beginning of each call for applications, we activate several pledges after negotiating with our investors. This means that we get to pool a fraction of what the investor has pledged in total. This way we can begin funding companies as soon as they are selected. Once the companies are selected, the remaining money is returned to the investors depending on what they initially contributed in this round. We may call again in future rounds for the remaining of the total amount that was pledged.

Will the investors know the startups they will be investing on before they commit their funds?

Unfortunately this is not possible. We may have data from previous calls for applications, but we can't share such sensitive data before an investor is entitled to it, by commiting their funds.

Is it possible that an investor's money will be used to fund a company they do not endorse?

The selection process is very rigorous, open and very strict. Investors are given many chances to push out ideas they do not endorse. First a voting including the executive board. Then the majority of the investors get to veto out proposals they don't like. If after that a proposal survives, then their money will be used to fund it.