500 startup fee vs initial investment, when it happens?
when do you get charged for the 15k fee and when you receive the initial investment, it could be the case to get charged with the 15k without getting money?
1 Answer
no, we debit the $15K out of the initial investment capital. (sometimes we do it in 2 pieces, but we've never billed program fees to anyone *before* sending them capital).
to further clarify:
- 500 Startups charges a program fee to cover a number of costs, not just rent, but also overhead for 500 staff, legal & accounting costs, food, etc. (note: we aren't going to Tahiti on the program fees ;)
- for tax purposes, the program fee is charged by a separate incubator entity, not our investment fund... we can't mix services revenue and investment returns.
- on a net basis, the amount of capital provided to accelerator companies (usually $50K investment - $15K program fees = $35K remaining) is still more than most other programs provide. however, your mileage ma vary.
in summary: we feel quite confident there is a ton of value in joining the 500 Startups accelerator program, and the ongoing benefit for 500 alumni is similar or greater to that of top ivy league schools or business schools which charge far more (and, who don't invest any capital).
then again, for folks who don't see the value in our program, or are comparing it against rent or co-working fees, you are always free to stay home ;)
to further clarify:
- 500 Startups charges a program fee to cover a number of costs, not just rent, but also overhead for 500 staff, legal & accounting costs, food, etc. (note: we aren't going to Tahiti on the program fees ;)
- for tax purposes, the program fee is charged by a separate incubator entity, not our investment fund... we can't mix services revenue and investment returns.
- on a net basis, the amount of capital provided to accelerator companies (usually $50K investment - $15K program fees = $35K remaining) is still more than most other programs provide. however, your mileage ma vary.
in summary: we feel quite confident there is a ton of value in joining the 500 Startups accelerator program, and the ongoing benefit for 500 alumni is similar or greater to that of top ivy league schools or business schools which charge far more (and, who don't invest any capital).
then again, for folks who don't see the value in our program, or are comparing it against rent or co-working fees, you are always free to stay home ;)
