our focus lies in the realm of small business, but we stay connected to the “big-market” world of venture capital and their “sexy” startups because 1) there’s a lot of talented folks who hang out in that neighborhood, and 2) more →
a wide variety. what matters most is your organizaton’s age and size, because our process creates the greatest impact for organizations between 1-5 years old with annual revenues ranging between $150,000 – $1,500,000.
for lack of a better label, the next most important factor is “attitude.” we only want to work with business owners who are serious about investing in their own business and are willing to commit to our process. because “attitude” is a huge factor, we do consider working with the right kind of small business start-up.
the industry you’re in, and even whether your profit vs. non-profit, is pretty much irrelevant to our process.
ZENCubate was launched in January 2012 as a “beta program.” this means we’re limiting our initial efforts to 20 organizations.
interested companies will complete an application that will allow us to evaluate the business and its owner(s) across 4 key criteria :: opportunity, passion, commitment and integrity. how we measure these is our little secret.
here’s a rough outline ::
during the active phase of our work (approximately 18 months), companies pay a nominal monthly fee plus a specified percentage of any increase in revenues. to assure affordability, total fees are always capped at a specific percentage of total revenues.
upon completion of project initiatives, companies start paying a higher percentage of their increase in top-line revenues (typically between 15 – 25% of the increase and never more than 5-10% of gross revenue). payments are calculated and debited monthly. if there’s no increase in top-line revenues (measured from the start of the program), then no payments are triggered.
because payment amounts are always tied to revenues, companies are assured a comfortable level of affordability with our financing. we may ask for other considerations depending upon the level of risk involved, but this is generally what most companies can expect.
no. when we structure each agreement, we set a cap on the total amount of payments, total time period for payments, and / or some other option (including early buy-outs).
yes and no.
first and foremost, portfolio companies are paying for much more than the cost of financing certain services — they’re buying into a process designed to minimize risk and maximize results.
second, a large number of portfolio companies (and their owners) are unlikely to qualify for standard financing. and if they do, you can bet your @$$ there will be an absolute obligation to repay the full amount of funds borrowed regardless of how well their business performs. and don’t forget about the personal guarantee that also will have to be made. a business gets none of these strings with ZENCubate.
finally, our expert investors are assuming a lot of risk under this model. commanding a potentially higher rate of return in exchange is simply fair.
at the end of the day, nobody’s arm is twisted under this program — if a company doesn’t like the arrangement or thinks they can do better independently, then more power to them.
yes. businesses may qualify for ZENCubate “lite” — essentially the framework under which main street ventures has been operating for several years. you don’t get the same scope of services or financing, but you still get simplicity and affordability through our performance-based fee structure.