Frequently Asked Questions
WHERE IS BETABLOX LOCATED?
BetaBlox was founded in 2012 in Kansas City, and then expanded to its second location in Tulsa, Oklahoma during the summer of 2016. The location in Kansas City is in Overland Park, essentially off Metcalf and 119th; the location in Tulsa is off Cameron and Main in The Brady Arts District. We have a team of people that reside in Kansas City, a team of people that reside in Tulsa, and a single person who goes back and forth with the sole job of connecting the two networks.
WHAT IS THE FORMAT, AND WHEN IS IT PROVIDED?
*Note that these are educated approximations after doing this for the better part of a decade. BUT, things like inclement weather, holidays, and upgraded or extra demo days have the potential to elongate or spread these assets out.
**Note that mentors/workshops appear to “stop” after one year, and classes appear “stop” after nine months; they don’t actually stop – they just start to repeat themselves. Awarded entrepreneurs are still allowed to come to these things forever, in fact you’re encouraged to do so. Especially if you happen to miss a particular speaker or class throughout your program – jot down which one you missed and attend it when we do it again. Same thing with the bootcamp – come to it as many times as you want! You’ll find that taking the same courses/workshops at different stages in your company’s development will be highly educational. And after the six months of consultations, you’ll still have access to our team – it’s just that we’ll stop proactively booking them months ahead of time and will instead wait until you have important milestones and opportunities to discuss. We have to put metrics such as ‘number of consults’ and ‘months of office space’ in the contract because our lawyers told us we had to – but the truth is when you get into BetaBlox, you’re kinda in it for life. With the exception of the free office space, seemingly nothing stops.
***Most all of this stuff will take place in the very late afternoon, or most likely at 6PM. This allows for people that haven’t quite gotten out of their day job yet, or are hustling their startup during normal business hours, to attend.
WHAT IS THE COST?
The 10-ish chosen companies provide 5% equity ownership. They aren’t charged for rent, utilities, class fees, special event costs, or anything else we tout on the “About Our Program” page. Our goal is that the BetaBlox platform will increase the likelihood that you grow big and fast – and then one of three things will happen. Either (a) you’ll be acquired by a larger company for hopefully a large amount of money, (b) you’ll go public, (c) you’ll start paying dividends. Only once any of these three things happen will we take our 5%. In other words, we won’t ever charge you a dollar until you become successful; if you are unsuccessful at accomplishing any of these feats we won’t charge anything. We’ve been referred to as “success insurance”.
A quick note on these three hopeful options: we don’t require any sort of power or voting rights. This means it’s your decision when/if you are acquired; when/if you go public; when/if you distribute dividends. We want you to grow a healthy and happy business. We’re patient, and we know that the chips will fall into place if we help you build a great company. A note on dividends: they’re only paid if you stop wanting to grow. Out of our 100+ companies, we’ve proudly never accepted a dollar in dividends. Our best companies choose to reinvest this money into becoming larger entities.
It mutually aligns both sides of the partnership towards long-term success and allows start-ups to acquire expensive services with no capital. If you fail, we fail. When you succeed, our percentage is far smaller than what an angel or venture capitalist typically seeks. We promise that our motivation is exponentially higher than anyone else in the city that charges by the hour. We will literally go out of business if you don’t succeed.
WHAT IF I DON'T WANT TO PAY EQUITY?
Great! We understand. We’ll take cash. In fact, we prefer cash. We’ll work with you to customize a package between $25,000 and $75,000, dependent upon what you need the most help with.
WHAT IF BETABLOX CAN’T PROVIDE ITS PROMISED VALUE?
We did something completely and utterly unheard of in the world of business services. Not only do we not charge cash for our time, but we also have a guarantee that if you don’t think we’re worth the 5% within the first month, you can have your equity back. In technical terms, that means our equity “vests” in thirty days. That is how confident we are that you found your new home.
WHAT EXACTLY DO YOU MEAN BY EQUITY?
Equity refers to the true, all-encompassing ownership of your business and its assets. This does not mean salary, revenue, or profit. We want to help businesses that reinvest the revenue they generate towards further growth. When this occurs, the equity partners’ share of profits is continually reinvested into the growth and proportionate value of the business itself. The end result is that equity partners (like ourselves) will traditionally only take a share of your incoming cash flow at liquidation periods. The average successfully liquidated business won’t reach this point until after year six and a half. Examples of liquidation events would be an IPO or acquisition (such as AT&T purchasing your business outright). To sum all of this up, we won’t collect a single cent until you reach extremely rare, long-term milestones, at which point we only take 5%. If for some reason you don’t understand that this is one of the best offers in the world, once again – feel free to pay us instead.
HOW CAN YOU AFFORD TO DO THIS, AND WHAT IS THE POINT?
We raised money from private investors in 2011, and then again in 2016 from more private investors and financiers (namely, The Oklahoma Innovation Institute), that allows us to hemorrhage cash while we help startups get to the next level. Eventually, a handful of these startups will liquidate – and we’ll be compensated. When we get compensated, our founders and investors will divide up the earnings. Until that time, the main point is to have a lot of fun making a huge dent in Kansas City and Tulsa entrepreneurship.
According to the National Business Incubation Association: 87% of incubated companies are still in business. So the idea is not to simply acquire equity like an angel investment group would, but to put those entrepreneurs through a program that’s been proven to increase their likelihood of success – and the speed at which it takes to get there. There are countless examples of risky startups entering programs similar to ours all over the world, raising capital, acquiring massive amounts of paying customers, and successfully liquidating. Here are a couple examples from a single incubator located in California:
WHAT STAGE OF BUSINESS SHOULD I BE IN?
There is no stage that you are required to be in. Diversifying the businesses that we choose (through industry and stage) is in our best interest. We target “start-up” companies, which traditionally means companies within their first year or two—perhaps even pre-revenue. In other words, we actively take on companies that see themselves fitting into our environment during any stage of their business. BetaBlox is designed to serve true start-ups, as well as high-growth oriented private businesses. As an example, in our last batch (at the time of this writing) we took on a company that was nothing but an idea – as well as a company that is making over $400K in annual revenue.
DO YOU HAVE ANY SUCCESS STORIES?
We’ve successfully raised capital, had acquisition offers, created many jobs, liquidated out of more than a handful of companies, and most importantly watched some of our startups turn into the fastest growing (by revenue) startups in the Midwest. We’re mostly concerned with building financially sustainable businesses that provide real value to their customers. It’s up to our entrepreneurs when – and if – they sell. Click here to read up on some of our success stories and testimonials from some of our entrepreneurs. Don’t believe us? Ask them yourselves.
DO I HAVE TO LIVE IN KANSAS CITY OR TULSA?
You must be willing to relocate to Kansas City or Tulsa – or spend the majority of your time there during the six month period where we’re adding the most value. Many people commute to us from cities that are 30, 45, even 90 minutes away. But anything further than those types of drives will require you to move here – or at least provide a comprehensive plan that assures us how you’ll stay engaged throughout your time with us. Simply getting into BetaBlox won’t get you to the next level. You have to be here and work the program for that to happen. It’d be like buying a gym membership, not working out, and wondering why you’re not getting in better shape.
I AM A MENTOR. HOW DO I GET INVOLVED?
We’re always welcoming new mentors who share our passion for entrepreneurship. Go to our Contact Us page. Tell us youʼre interested in becoming a mentor for our program. Send us a resume or LinkedIn link, and we’ll set up a meeting. We look for a lot of things in our mentors, but mostly it’s relevance. This means either (a) relevance to the early stages of starting a company (as in you’re some sort of entrepreneur yourself), or (b) you are an expert at something that early stage entrepreneurs should know more about (like inbound marketing, legal deal structures, Kanban prioritization, pay-per-click advertising, etc.).
DO MENTORS GET PAID?
No, mentors donʼt get paid. We are proudly located in Kansas City and Tulsa, where countless smart and successful people are willing to give back to their entrepreneurial proteges. Mentors are paid by promoting their own companies, strengthening their storytelling abilities, having fun, and giving back.
BUT, our consultants do get paid. They’re usually part of our investment team. So unless you want to pay us to work for us, please don’t ask us about that position. “Mentors” do a once-a-year speech to the group, “consultants” do bi-weekly one-on-ones with the selected teams for the first six months.
WHAT ARE THE IMPORTANT DATES?
Our next batch starts soon…
*These days may be slightly tweaked as things progress. That being said, this is a fairly accurate schedule.
*Please don’t let the inability to make one-or-two of the followings days due to travel, or something along those lines, prevent you from applying. We understand you’re humans, and thus our side of the table needs to be flexible. We greatly prefer that you make these dates happen, but if you can’t – at least reach out and ask. We will do our best to accommodate.
Final day to apply via application page (1-minute process)- June 1st, 2017
Sometime between late May and June 3rd, we’ll reach out to schedule a 30-minute meeting to discuss your opportunity. You will not receive any notice that we received your application; and you will not receive early feedback. As much as we’d like to do these things, we’re time and resource constrained due to the radical demand and attention we provide to our current entrepreneurs. Because we can’t get to all of these requests, we will get to none of them.
If you’ve applied to Tulsa BetaBlox, your first 30 minute interview will be on either June 12th, 13th, or 14th. If you’ve applied to Kansas City BetaBlox, your first 30 minute interview will be on either June 8th, 9th, or 10th. Both cities will have a combination of late afternoon and early evening time slots to accommodate people that still have other full-time jobs. It is greatly preferred we hit these dates, but if you can’t we’ll shoot for a phone call. Roughly 40% of the people that go through this step will be invited to the final interview. Put the final interview date in your calendar NOW. We move fast and require your flexibility on this date for this to happen smoothly.
Final interviews (pitch to BetaBlox investors, attorneys, alumni, etc. – roughly 5 people). This will only take 30 minutes. Remember, put this date in your calendar now. Exceptions will be made for people who can’t make this date, but only if we’re told at the time of your first meeting. The finals for Tulsa applicants will take place on Saturday, June 24th; the finals for Kansas City applicants will take place on Saturday, June 17th.
The contract phase will last for approximately two weeks, starting from the time of your acceptance. Contracts will need to have been signed and turned in before, or on the day of, bootcamp. Please let this be a friendly reminder that we are not a school, government, or non-profit. We are angel investors, and capitalists. It’s because of those last two sentences that we strongly believe we can add more value to your company than anyone in Kansas City or Tulsa. If you make it to this step, a contract will need to be signed that grants BetaBlox a stake in your venture. If you’re not prepared to do this, please do not apply. If you have advisors telling you that sharing equity has risks, tell them that we’d be more than happy to take cash – but you’re not going to like the number. We do not ask for voting rights, or board seats, or anything else that forces you to make particular decisions. This is your company, and we trust you with the power. This type of compensation is what motivates us to add the most value to your venture. This also means that if you fail, we make nothing; if you succeed, we succeed with you.
Start of Tulsa program – July 15th
Start of Kansas City program – July 8th
HAVE ANY OF YOUR COMPANIES GONE OUT OF BUSINESS?
Of course! We’re one of the largest incubators in the country – if we didn’t have companies go out of business we’d either be Gods or we’d be lying. And guess how much money we charged those people? Not one penny. We put our money where our mouth is; day-in, and day-out; and hope to do so for the next decade.
WHAT CRITERIA DO YOU CONSIDER WHEN DECIDING WHICH COMPANIES TO ACCEPT?
- Management team strength (60%)
- Scalability and potential ease of growth (30%)
- Quality and feasibility of idea (10%)
WHAT IS THE APPLICATION PROCESS LIKE?
- Go to the Apply page, fill out the form, and press the send button.
- Dependent upon when in the application process we are, we will email you questions. This might be within the hour, or it might be a month later. The intent is to start a light email conversation and learn more about you and your opportunity before the next step. We also might skip emailing and go straight to an in-person meeting.
- If we are interested in learning more about your idea, you will be invited to our facility for a private discussion with a BetaBlox representative. Approximately 40 people are chosen for this stage. It essentially acts as a free consultation so even if you’re not sure if you can get in to the program, learning why could be very valuable to your business at this stage. Dependent upon when you apply is how long you will have to wait to get a meeting. First come, first serve – so apply now.
- Within the following 1-3 weeks our team will decide whether you will be invited to pitch to our investment committee. Approximately 16 teams will be chosen for this step. This will be a formal presentation, “Shark Tank” style: 3 minute presentation, 17 minute Q & A. There will be about 5 people (some combination of alumni, investors, lawyers) there to grade you on a scale of one-to-one hundred. The top 6-to-10 point scorers will be invited to join the incubator. We’re not required to take any particular amount of companies – so we choose the startups solely based on how great of a fit they are, not arbitrary numbers. We’ve had 14-company batches, and 6-company batches.
- Within a week of the “Shark Tank” day, you find out if you got in or not. If it’s a ‘no’, we’ll provide feedback and more than likely encouragement to apply again. If it’s a ‘yes’, you’ll receive an operating agreement that protects our 5%. You’ll have approximately a week to look at the operating agreement and make sure everything looks on the up-and-up. As long as our 5% is protected, virtually 99% of the document can be edited to fit your individual needs.