The Founder Institute

History

The Founder Institute was founded in 2009 by Adeo Ressi in his garage in Palo Alto, California. It was created with his friend and business partner Jonathan Greechan as a response to the 2008 market crash and the attendant failures of numerous startups. From the outset, its primary goal was to provide a safe place for companies to materialize and entrepreneurs to hone their skills. Ressi also wanted to "globalize Silicon Valley" and make entrepreneurial training available to people around the world. One of the earliest visions of The Founder Institute was to launch 1,000 companies per year. Graduates were given access to a "shared liquidity pool," where all participants in the program share equity in the companies formed. The first class graduated in October 2009 in Silicon Valley and was composed of 66 entrepreneurs and 54 companies.

By the middle of 2010, The Founder Institute had chapters in ten cities throughout the world, including New York City, San Diego, Berlin, and Singapore. In May 2010, the chapters in New York and D.C. graduated a total of 25 new startups. By the end of 2011, it had more than 20 locations worldwide and had graduated 483 entrepreneurs with 415 total companies. It also maintained around 700 mentors. In addition, The Founder Institute announced that it had become that "largest incubator in the world." Adeo Ressi started the Female Founder Fellowship program to help address the dearth of women in the tech industry. Women founders accounted for roughly 20% of all startups and graduates at The Founder Institute in 2011. By 2012, that percentage had increased to 36%.

In September 2012, The Founder Institute achieved a milestone of 650 startups graduated. It had also expanded its operations to 32 cities in 19 countries (including Vietnam, Mexico, and Israel). In 2013, it achieved another milestone with 1,000 startups created in roughly four years. Around 89% of those companies were still operational, and 74% of those were at or ahead of their prescribed growth plans.

In 2014, The Founder Institute moved to a new headquarters in downtown Palo Alto. It commemorated the move with a unicorn-themed party. At the end of 2014, The Founder Institute was located in over 80 cities in 40 countries worldwide and had been responsible for the creation of over 1,300 companies.

In July of 2016, an arbitrator ruled that the CEO and sole shareholder of the Founder Institute, Adeo Ressi, owed $3.5 Million in damages to his former business partner for various breaches of fiduciary duty. In November of 2016, Ressi filed for Chapter 11 (personal) bankruptcy.

Program

The program offered by The Founder Institute has been considered unique by comparison to other incubator programs. It is a four-month program that recruits and accepts new and early-stage entrepreneurs who may still be full-time employed, and who don't necessarily yet have a fully formed idea or company. One of the key requirements for graduation is the incorporation of a company. Only around 40% of enrolled students end up graduating the program.

Another main feature of The Founder Institute's program is its global reach. Because of the large number of chapters throughout the world, more entrepreneurs can gain access to the training and networking. Each chapter has its own mentors, but the curriculum is similar amongst all locales. It only chooses mentors who are successful founders or CEOs in and of themselves. As of 2014, there were 3,100 CEO mentors in The Founder Institute network. Networking is another major component of the program, allowing entrepreneurs to communicate (often for the first time) with like-minded individuals in their region. The Founder has a "shared liquidity pool" that rewards graduates, mentors, and local directors for the successes of their peers.

Predictive admissions test

The Founder Institute has an application process that requires a proprietary aptitude test and personality designed to identify "entrepreneurial personality traits." In 2010 it was reported that of those accepted after testing, 57% performed as predicted with 27% performing worse and 16% performing better than predicted. By 2013, more than 15,000 applicants had taken the test which resulted in accepted applicants who created 650 companies in 39 different cities throughout five continents.

The test is reported to take approximately 1 hour, and measures aptitude, intelligence, and five psychological personality traits. All of this information is then cross-referenced with data from Institute graduates, and is used to compile a database that seeks to pinpoint the ideal score for a successful entrepreneur. The data continues being collected even after the students have graduated the program. For example, if a student's company earns a liquidity event (IPO, sale, etc.), their scores will be increased. Applicants are given a score of 0 to 5, 5 being the highest, that helps predict how well the applicant will do as an entrepreneur. Peer reviews and progress of those accepted as well as prior graduates are used to update the test, leading it to be ranked in the top 5% of social science tests. The test has been the feature of discussion in publications such as CNN Money, Tech Crunch, and Forbes.

Curriculum

The curriculum of The Founder Institute is often taught sequentially. Throughout the four-month program, students are asked to work on their ideas, research their ideas, name their company and product, seek out co-founders, and work out a business model. The curriculum is guided by The Founder Institute, but taught by mentors with experience as startup founders and/or CEOs. The curriculum also uses a hands-on approach, often exposing students to situations that an entrepreneur would find themselves in. It creates working groups that combine 4 or 5 students together. These groups meet several times each week to discuss the formation of their business plan. The curriculum is similar throughout all of the chapters, but sessions aren't universally conducted in English.

Mentors guide entrepreneurs through the program with training and feedback, and participate in the “shared equity pool”. Mentors in The Founder Institute have include Aaron Patzer and Phil Libin, both of whom have mentored at the Silicon Valley chapter. Additional mentors have included Robin Chase, Peter Vesterbacka, and Jeffrey Paine.

Locations

As of 2014, The Founder Institute has chapters in over 80 cities and more than 40 nations on 6 continents. The founding chapter is located in Silicon Valley. Each chapter has its own local directors and mentors.

The Silicon Valley chapter is the oldest chapter in The Founder Institute system. Eren Bali, who graduated from the initial class, is one of the co-founders of the online educational marketplace, Udemy. The Berlin chapter was one of the first chapters to come to Europe (behind the Paris and Brussels chapters). The current director is Didier Vermeiren, who is an alumnus of the Brussels chapter. The Berlin chapter has produced startups like Itembase, Kiddify, and Letsmake. The Singapore chapter was launched in 2010 and is one of the most successful chapters of The Founder Institute in Asia. Mikhail Choo graduated from the Singapore chapter in 2011 and sold his company, Gridblaze, for a 7 figure price in 2013. iCarsClub, which secured $60 million in funding in 2014, is also a product of the Singapore chapter.

Notable companies and graduates

As of 2014, The Founder Institute has produced around 1,300 companies and graduates throughout its existence.