Each eFounders project is unique and follows its own path, but let’s try to sum up the general framework:
Every month, ~100 entrepreneurs reach out to us to express their interest in working with eFounders. When we sit down with them, we want to have a real and open conversation, similar to when two people meet for a coffee for the first time. The aim is to get to know each other and assess the possibility of working together in the long run.
We have three kinds of discussions in the partnering process:
There is no typical founder profile within eFounders. Founders we have worked with in the past differ along all dimensions: previous entrepreneurial experience, age, education, knowledge of SaaS.
In our initial discussions, we try to understand the founder’s profile and skills across four key dimensions:
The founders join at the very beginning of the venture, before the first line of code is even written or the first team member is hired, so that they can build and own the full journey. Generally, the two founders' arrival is not completely synchronized: often times the technical founder will arrive first and start building the product.
eFounders isn't an agency: our core team is a full-time co-founder on each project. It takes around 18 months to build a company starting from the initial idea. During this phase, the eFounders team is fully hands-on alongside the founding team, working on product, design, strategy, go-to-market, recruiting, funding, etc. Besides being extremely hands-on, our core objective is to build a team and help them become progressively autonomous on each of these dimensions. We build independent companies.
The key difference with integrated studios (e.g., Rocket Internet) really lies in the fact we're building independent ventures from both an operational and a financial standpoints. This means eFounders does not provide shared resources in consulting mode to independent companies, eFounders does not provide funding to independent companies. Conversely, eFounders acts as a co-founder involved in every aspect of the company and covers all costs until the company becomes independent. Founders are in the driver seat, they build their own company, and eFounders is dedicated to providing as much help as it can along the way!
Twelve people work in our core team. They support each project on recruiting, product, design, marketing, sales, finance, legal and more strategic topics. Most importantly, the priority of each core team member is to help build a fully independent team for each project. It's also worth noting that we don't have software engineers in the core team working on new products. This means that each new startup's product will be built by engineers who have been recruited specifically for this company.
The project team will initially start with two co-founders, and we will together start growing the team by hiring software engineers and business developers. After 12-18 months, when the project becomes independent, the size of the team (including founders) is generally between 6 and 10 people.
The team will work every day from our office, literally sitting on the same bench alongside the eFounders' core team. This means we work together and interact on a daily basis on all topics: product, design, recruiting, go-to-market, fundraising, team management, etc.
To ensure that we keep the right pace of delivery and that everybody is on the same page, we have a weekly sprint organization that applies to all topics (product of course, but also business, go-to-market, etc). These sprints are supported by 3 short weekly meetings for each project: weekly kick offs on Mondays, go-to-market on Tuesdays, and product committees on Fridays. Besides these meetings, ad hoc meetings are setup to dig into specific questions (e.g. : content strategy for Cycle, pricing for Bonjour, etc).
Finally, we have a quarterly meeting called Demotime, where each project makes a presentation to the eFounders team and all the other startup teams to take a step back on their progress and define the 3 months roadmap.
The initial idea will in most cases come from the eFounders team. The numerous rich discussions we have through our deep exposure to entrepreneurs, companies, investors and more generally the global SaaS ecosystem are the key source of inspiration of new pain points to solve.
An idea for us generally means (1) a pain point we want to solve, and (2) a first mockup of the initial MVP - a simple solution to start solving the pain point while providing enough value to users.
It's important to understand the idea will obviously evolve as we will be working together on the venture, driven by the founding team - and that in our experience the founders very quickly become full owners of the idea.
A question we often get is around copycats. The answer here is super simple, we build software companies and not ecommerce companies. Software businesses are driven by innovation and generally have low localization specifics (i.e. in general, apart from language, SaaS companies are essentially global from day one) - which basically means copycating a software company does not really make sense. Long story short, all our ideas are original 🙂
We start around 3-4 projects each year, and the teams will stay with eFounders between 12 and 18 months, which means there are generally 4-6 ventures in the making at any given point in time in our offices.
It's rare but worth mentioning that we have partnered with founders on an existing idea (e.g., Equify, Foxintelligence).
It's a question we get a lot which is hard to answer because success is difficult to define and takes several years to assess - but so far our failure rate has been pretty low.
It's important to understand companies start as "projects" within eFounders and are generally incorporated 9-12 months after the first line of code, when we start getting the first positive signals from the market and the users.
If we don't find this initial traction, the founders and eFounders can collectively decide to stop the project before it is incorporated. It's already happened a few times, for instance with Solved, Illustrio and Chilli, but this remains fairly low in regards to the 20+ projects we started. However, none of the companies we incorporated have had to stop.
Most of the people joining eFounders will join as an early employee of one of the ventures.
Being one of the very first engineers or business developers on the team is an absolutely crucial role as you will have not only a huge impact on the product and the business but also on the company culture. Joining as an early employee when the company is still with eFounders requires a very strong entrepreneurial mindset, autonomy, and a bias towards action!
You will be fully dedicated to a single project, but you'll also share best practices with other projects and with the eFounders team.
Remember, we all sit on the same bench, have lunch every day together and have a lot of fun as a team!
Technically, you will initially be an employee of eFounders ("CDI") until the company you're working for is incorporated, and the team will then be transferred in the newly created company.
We want eFounders to be attractive for the best entrepreneurs. The core principles are the following:
Bottom line: just before the first external funding round, the founding team owns the majority of equity.
With this, entrepreneurs get the same equity ownership they would have if they were 3 co-founders and had to raise a preseed round.
Then, as the company grows and needs to raise money, eFounders and the founders get equally diluted by new investors.
Once the company raises a seed round, they become a completely "normal" startup. The founders are in the driver seat, they have a board comprised of the founders and the key investors (o/w eFounders).
As the business grows, the team will also grow. As cash burn increases, the company generally needs to raise additional funding rounds often with VCs (Series A, B, C...). In general, the startups are not profitable until a long time, as they tend to invest a lot in growing the business (e.g. by hiring engineers, sales, marketing people, etc). eFounders remains as a shareholder until an "exit", the company being sold, or listed on a public market.