Global Institute: Costs

NOTE: These are costs and dates for Unreasonable Global only. Unreasonable East Africa and Unreasonable Mexico have different costs.

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What does it cost to take part in Unreasonable Institute?

We’re finalizing the details of a revenue share agreement. You can help us by providing feedback to Sean.

Here’s how it works:

 

  • Revenue Share. Ventures agree to a revenue share agreement with Unreasonable Institute, paying 4% of their gross revenues from all sources for five years after they complete Unreasonable Institute. For example, if a venture earns $100,000 in revenue in a year and raises $100,000 in outside funding (for a total income of $200,000), they would pay Unreasonable Institute $8,000 that year. You can use the calculator below to understand what you would owe Unreasonable Institute in a given year, based on your revenue and funds raised. Read more about the terms here.
    • You won’t pay a percent on any revenue earned before 2016: 

Ventures will not pay a percent on any revenue earned up to Dec 31, 2015, and after that they’ll only pay a percent of revenue beyond what was earned in 2015.

  • Money-Back Guarantee. If a venture doesn’t find Unreasonable Institute valuable, after going through the program, they can renegotiate or eliminate revenue share terms. Read more about the guarantee here.

FAQs

What are the terms of the revenue share agreement?

Royalty: 4% of venture’s gross revenues from all sources, excluding loans, sales of securities, insurance claims, litigation settlements, customer refunds or reimbursements, write-off, and non-cash revenue from partners or joint ventures, delivered to Unreasonable Institute in quarterly repayments for 5 years.

Reporting Requirements:Venture shall provide:

  • Semi-annual on impact metrics and performance
  • Semi-annual financial statements — balance sheet, income statement, and cash flow statement


Money-Back Guarantee:
Venture will have five (5) business days within completion of Unreasonable Institute’s program to lower or eliminate owed royalty payments to Unreasonable Institute, depending on satisfaction with the program. If Venture exercises this option, it will be required to provide extensive feedback to Unreasonable Institute as to why it chooses to exercise this option.

 

I’m not sure how I feel about a revenue share agreement. This is scary.

We don’t blame you. That’s why we installed a money-back guarantee in this agreement. Some entrepreneurs who have come through Unreasonable Institute have been skeptical of the value of Unreasonable Institute beforehand. We fully understand. So we’ll take the risk out of it for you. Go through Unreasonable Institute first and then decide if it’s worth it. You don’t pay us upfront. And what you do start paying after that is a percentage of the revenues you earn. It’s our job to help you drive those revenues and raise the funding you need to grow the company. We become active supporters in your future. And if we don’t deliver, you can choose to lower or eliminate the royalties you owe us.

A big reason we’re providing this guarantee is that we’re confident in our value. We’ve run these programs for five years, expanded to Mexico and Uganda, and worked with over 116 ventures. We’ve made mistakes, but we’ve learned and improved the model. That’s why we’ve had the results we’ve had.

Many thanks to TechStars for inspiring this money-back guarantee!

 

But why charge a revenue-share agreement? Why not a flat fee? Why not equity?

In past years, we used to charge a flat rate of tuition to our entrepreneurs, which led us to three problems:

  1. Early-stage entrepreneurs didn’t have free cash, and charging a high upfront fee deterred many applicants.
  2. We could not justify providing much by way of on-going support to our entrepreneurs, since our tuition of $10-$12,000 barely covered the 5-week Institute we run for entrepreneurs. A flat fee didn’t align incentives for long-term support.

Many of our ventures opted to use our crowdfunding platform, the Unreasonable Marketplace, to raise tuition. Raising on the Marketplace proved very difficult and unnecessarily distracted our entrepreneurs from their companies.

As for equity, we’ve had two observations about our companies:

  1. Some of our ventures have exit potential, in which case, they tend to prefer to keep equity and ownership in their company for founders, funders, and employees. Equity is also very hard for ventures from some countries to give to a US legal entity.
  2. Some of our ventures don’t have exit potential or alternatively are not planning to exit. Equity in these companies doesn’t make a lot of sense.

We believe that revenue share holds Unreasonable Institute accountable to delivering value to our ventures over the long-haul. Here are the ways that we plan to do that (at no additional cost beyond the revenue share):

  • Providing access to two investor gatherings per year to all of our ventures, uniting at least fifty (50) funders at each gathering
  • Privileged access to our global network, including more than 116 ventures in 45 countries, 250+ mentors, 550+ funders, and 300+ partners
  • Providing each entrepreneur attending Unreasonable Institute with a vetted, well-matched executive coach.  And if that coach doesn’t work out, we’ll match you with another one!

 

What if I already have revenue when I come into the Institute?

We will not take royalties on any revenue that is under your “benchmark,” or in other words the amount of revenue you made in the fiscal year preceding your attendance at the Unreasonable Institute. So if you made 10$ the year before attending Unreasonable, and $12 the year after, only $2 of your revenue would be subject to royalties.

 

 

What other costs are there?

If you are accepted to Unreasonable Institute, you’ll have to pay for your flight to Unreasonable Institute in Boulder, Colorado. If you can’t afford that, we can provide you a loan that we’ll expect you to repay overtime.

 

What if my venture is a non-profit? Can I still apply?

Yes! We care about impact at the end of the day, and non-profits, like any venture, need to have a financial engine to sustain their impact. Non-profits can still participate in our revenue share agreement, whether it’s through providing us a percent of earned revenue or a percent of external funds raised.

 

I’m still not convinced that Unreasonable Institute is worth it.  

That’s okay. Apply anyway. You don’t get charged up front. If you get accepted, you don’t pay anything until the end of the program, when you get to decide, after being fully-informed, if Unreasonable Institute was worth it or not.

 

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1 month

July 7 – Aug 8, 2015

The most common concern we hear from entrepreneurs thinking about attending the Institute is that 5 weeks is too long to be away from their customers, their teams, and their families. We fully understand that concern. To help you understand how you’ll spend your time, here’s what a typical day at the Institute looks like:

  • 9:30am-Noon: Optional workshop with a Visiting Mentor (examples include “How to Scale” with Paul Polak, who’s lifted 20 million farmers out of poverty and “How to have an Investor One-on-One” with Tom Suddes, who’s raised $1 billion and coached others to raise $1 billion)
  • Noon-1:30pm: Lunch prepared by the live-in chef
  • Noon-6pm: Protected Work Time. You can use this time to respond to emails, make calls, meet with Mentors, Funders, and other Fellows, exercise, explore Boulder…whatever you need to do.
  • 6-7pm: Mentor and Capital Partner Introductions. We do ask you to be present for visiting Mentors and Funders to introduce themselves to the community.
  • 7-8:30pm: Dinner prepared by the live-in chef. This is our chance to all get together as a family and spend time with Mentors and Funders in an informal setting. This is where the magic happens.
  • 8:30pm on: Free Time.

The flexible daily schedule means you aren’t required to attend anything before 6pm, giving you time to work on your venture. If you have additional concerns, don’t hesitate to write us directly at wisdom(at)unreasonableinstitute.org.

Don’t Take Our Word for It!

Check out what some of the entrepreneurs who have attended the Institute in the past have to say about their experience, and whether the cost and time are worth it:

Click hear to see our results and read testimonials

 

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