Yesterday at the Sorenson Innovation Summit we had the opportunity to announce a collaboration with the Kauffman and Rockefeller Foundations designed to catalyze a new initiative within our current Scout Program pilot.
But first, a little context.
At the beginning of November, we announced plans for a Scout program as part of Indie.vc 2020. The response was immediate and somewhat overwhelming.
In December, we kicked off a pilot of the program with around 200 participants. That left a waiting list of nearly 3,000 people patiently awaiting our learnings from the pilot and anticipating our opening the program more broadly. We’re not quite ready to share the final impact that the Scouts had on our Jan 1 application window but we can say their influence was immediate and outsized beyond even our wildest expectations.
The initial goal of our Scout program was a pretty simple one. We believe the scale of the Indie.vc opportunity is as large, or larger, than when we helped to kick off the Seed investing surge back in 2005. That said when we tested the waters with our Indie.vc strategy 5 years ago it was clear we were missing one critical component that helped Seed scale; namely, a thriving ecosystem of angels, advisors, investors, lenders and legal structures that Seed reaped the outsized benefits of in those early days.
Given this unique opportunity to write the rules for an entirely new ecosystem, we’ve been very intentional with both the companies we’ve backed and the Scouts we selected for the pilot program. We aren’t trying to fix anything we see broken in venture capital; rather, our interest is setting the table for something entirely new. A different table filled with voices and networks and opportunities who could all benefit from a different path that valued, even celebrated, those differences as superpowers for scale and impact.
The Scout program is our attempt to seed this nascent Indie.vc ecosystem by putting our own money in the pockets of Scouts who refer companies that we fund, $10k per funded referral, with an option to join us as a co-investor. This gives them an opportunity to have skin in the game with us and experience first hand the difference between traditional VC investing and how we work with companies through Indie.vc. It allows those interested in building an Indie.vc aligned track record the opportunity to do that. And, it creates a curated group of Indie-curious founders, investors, and executives an opportunity to come up the Indie.vc learning curve alongside us.
But the cash payments were always a starting point. Early on we asked our pilot participants to be patient with us as we have a much longer-term vision for how we would like the program and its participants to evolve.
Through this collaboration with Kauffman and Rockefeller, we’ll be rolling out an expansion of our core Scout program that we call Cub Scouts*. The Cubs will have the capacity to make investments in companies that might not quite be ready for a core Indie.vc investment. This can often mean they are pre-revenue, have lumpy or unpredictable revenue or are coming off a pivot into a new product or market. These investments will be structured using Indie.vc terms with an eye towards nurturing these companies in preparation for a future Indie.vc application window.
Unlike our core Scout program, we will only be playing a guiding role in these investments, not the role of ultimate decision-maker. The goal is to allow Cubs to flex their investment decision making muscle, dive deeper into the mechanics of the Indie.vc terms and community as well as develop an even more distinct investment track record of their own.
Compensation on these investments will not be based on a referral; rather, Cubs will receive the full 20% of profits (carry) on each investment they make.
Our first cohort of Cubs will be selected from current participants in our Scout pilot. For this cohort, we’ll be focusing on those voices and backgrounds so often overlooked and undervalued in more traditional investment ecosystems. We’ve noted that founders who come from these networks tend to thrive within the Indie.vc model. Our hope is that by selecting Cubs that are endemic to those networks, we can deepen access and trust within those communities signaling that they are not only welcome but wanted, as we work to model what a thriving Indie.vc ecosystem can become.
Once we have data on how the Cub Scout program has performed through our June application round, we’ll consider expanding its footprint within the broader Scout network.
A huge thank you to Kauffman and Rockefeller for seeing the same potential we see within this program and the Indie.vc investment model as a whole. Their support will allow us to accelerate our iteration on these initiatives and catalyze capital allocation and access to many more founders and aspiring investors.
When we announced the Scout program in November, we asked those participating and those on the waiting list to be patient with us while we build out a program we can all be proud to be a part of. Today peels back one more layer on where we’re headed with this.
But it’s just one step.
We have A WHOLE LOT more up our sleeves.
*Bonus points for anyone who has picked up on the less obvious inspiration behind this name choice…