AppWorks is the Y-Combinator in Taiwan. Twice a year they’d recruit promising startups in Taiwan into their accelerator program. Recent years the focus has been on AI / Blockchain startups, with Southeast Asia as the main intended market.
We decided to apply for their accelerator program, and in the same spirit of sharing our “a16z Crypto School Application” and “YC 2020 Winter Application”, we share the relevant parts of our application, in hope that it’ll serve as a useful reference and record for the startup community and aspiring founders.
1–8. Who is your “CEO”? Why her/him? *
Shun-Yun conceived the concept for JCF and has been the main founder.
1–9. 1-minute CEO self-intro video
1–10. How did the founding members meet?? In what capacity have you worked with each other previously? How long have you been working on this startup? *
Michael and Shun-Yun met back in 2011 during the first Startup Weekend Taipei and were on the same team (team members included Ben Lin of POP, sleepnova 周立瑋 of 呼叫小黃). Michael moved back to Taichung (his home town) to work as a home-based freelancer a few years later, and joined Shun-Yun’s company Imonology in April 2017, as a developer/project manager. JCF was by then already in alpha mode and Michael was attracted to the vision of making wealth more equally distributed in our society, when the company was formed in July 2017, Michael joined in as a co-founder for JCF.
2. Product & Market
2–1. Please provide your startup’s product & social media URLs. (include past products if there is any) *
2–2. Who are your target users/customers? What problems do you solve for them? How did you find out about the problems?
We have two:
- Wealth individual / institutional investors seeking to bridge the wealth / income gap via impact investments, where they are seeking direct and transparent ways to effectively help people, creating social values. The problem for them is that they may want to address social challenges with their wealth and influence effectively, (impact investment or donation such as: https://www.effectivegiving.org/), yet, effective and transparent vehicles are hard to find.
- Retail investors who would like to invest the crypto/blockchain trend with a safe & accessible vehicle, and also potentially build up a financial safety net for family/friends. The problem for them is that safe blockchain investments are rare, and also out of reach/knowledge for most people (they may not be aware of it).
We discovered these problems first from personal experiences (Shun-Yun was keen of the importance of passive income sources as financial protection for his family), and had been investing in high-dividend stocks. Yet when he studied crypto and understood their potentials, there weren’t safe and easy ways to take part of the crypto trend.
2–3. Please describe your product and its key features. How do these features solve your users’ problems better than alternatives? *
We’re building an index fund that invests in the top 10 cryptos in the market, while distributing any profits gained back to all fund participants on a prolonged, monthly basis. Specifically, the fund’s main features are:
- safe: we invest in the top 10 cryptos index-style, while preserving “all” profits in a “dividend pool” as reserve against crypto volatility.
- accessible: 0% entry / manage fee with USD $10 minimal investment
- social: 7% of the dividends paid are “donation tokens” given to selected persons or organizations at the investor’s choice, so non-investors can also benefit from the fund’s operations with passive income.
Other more specific designs include:
- ¼ of the “dividend pool” is paid out as “monthly dividend”
- 45% of the monthly dividend is paid out based on holding ratio (“common dividend”)
- 45% of the monthly dividend is paid equally to all KYC-verified participants (“shared dividend”)
- 3% of the monthly dividend paid is reserved for operations (“team tokens”), of which, ⅓ (or 1% of the monthly dividend) is given back the person that has introduced the token holder to the fund (a “referral bonus”).
The the above features, JCF has 3 important “network effects”:
- the “shared dividend” creates more “social value” when retail investors join, and more “financial value” when institutions/wealthy investors join (each additional node creates more value for the collective whole).
- the required “donation mechanism” creates stickiness via participants’ social/trust network.
- the “1% referral bonus” will create additional incentives (besides social network) for people to recruit friends.
We address our target users’ problems in the following ways:
For high net-worth impact investors: They can do an investment that will generate certain RoI, but at the same time will help to bridge the wealth gap with fully transparent accountability on how those “help” are given out.
For retail investors: we simply create the safest and most accessible crypto fund out there, to help them secure a place in the upcoming crypto/blockchain opportunity. Due to the redistribution mechanism, they will also gain a better/higher RoI than alternative crypto index fund investments.
2–3–1. (Required for blockchain startups) Why does blockchain solve your targeted problems better than a centralized database, PaaS and/or other existing platforms?
Our use of blockchain is to release our own tokens and record all transactions/token transfer in a transparent way. This way all the wealth redistribution and/or donation is clearly visible and accountable. This accountability can be publicly verified by any one, which currently the closest example is “Binance Charity” donation to 3rd world country with BNB. However, the donation is simply “spending money”, but not giving out digital assets that may grow over time, and thus help the recipients to slowly exit a bad, unprotected economic situation.
2–4. When did you (do you plan to) launch your product? Any traction to prove that your product does solve the problems? What are the key growth metrics you track? *
A test fund was launched Oct. 2018, and we started monthly re-balancing since Mar. 2019, and paid out our first dividend by Oct. 2019. One interesting effect due to our dividend payout is that the topmost contributor (74.4% of the fund) got *only* 7.61% annual RoI, yet the lowest contributor (0.1% of the fund with USD $10) got 428.56% as RoI.
The fund is also well-received by BNI members. We’re tracking currently user growth, and Asset Under Management (AUM).
2–5. Please briefly describe your market, its size, dynamics, and your go-to-market strategy (e.g. ICO). Why is the market attractive?
we have two customer groups:
- retail investors looking for ways to invest in crypto safely, and may expand to people who does not yet have crypto wallets. There’s an estimated 2 billion of people still do not have any access to banks (Aug. 2017). We intend to spread first via existing business networks such as Business Network International (BNI), which globally has 260k users.
- wealthy individuals or organizations looking for ways to make a social impact. This group will need to be accessed via special channels. This is a much smaller group and people, and we expect to find contacts from founders’ friends. For example, we have been in weekly sync with a U.S. fund manager/investor that’s interested in JCF development.
The overall market is essentially those without financial saving or plans, and may not have invested before. This “unbanked” 2 B+ people represent tremendous opportunity where we may change their lives positively.
2–6. Who are your current and potential competitors? Who is the strongest? How do you plan to beat them?
There are some crypto index funds out there, Crypto 20 (C20) / C10 Hedged from Invictus arethe most related and respected. However, we don’t really consider them as competitors as we’re addressing a “social challenge” while they’re concerned with maximizing return for individual investors. We intend to maximize the overall, social benefits for all participants.
There are also other UBI projects based on blockchain (such as Mannabase), our main difference is that they expect to gain traction / usage via people adopting their cryptos for business/transactions usages. Yet that may take a much longer time to be effective, before the critical user economy scale is achieved. We provide financial / social incentives for people to take part as either investors or incubated teams.
2–7. What do you know about this opportunity (business) that others just don’t get?
- there’s actually a very safe (long-term speaking) approach to invest in cryptos
- wealth gap/job loss will become very serious before most people realize.
- there are impact investors looking for ways to give money effectively
3–1. Why do a startup? Why now? What are your short-term and long-term goals? *
JCF’s intended goal (to build passive investment vehicle that may pay out dividend monthly to bridge the wealth gap) is best executed as a startup, due to flexibility. We believe the crypto trend is at its infancy, so now is the best time to get involve before it gets too big and too late. Some milestone goals are:
- onboard people via Business Network International (BNI) local chapters
- raise USD 1M to upgrade security and complete the donation mechanism
- USD 10M Asset Under Management (AUM) by end of 2020
- 1M fund participants by 2025
- USD 1B AUM by 2030
- 1 billion+ fund participants with basic income protection by 2040
3–2. How much money have the co-founders put into this startup? What is the % of the company (/token) each co-founder owns? *
3–3. How much time do you give yourself for your current startup? What would you do if it doesn’t work out? *
JCF is designed to be a 20+ year fund, it’s addressing an important enough problem that the current plan is to stick to it until it works out. The core team does have other jobs/responsibilities that they can still fall back to (Shun-Yun has a software company, and Michael may do crypto trading).
3–4. Why AppWorks? How can we help you achieve your goals? *
We admire AppWorks for its goals and missions, and Shun-Yun knows about AppWorks since its inception. We believe AppWorks will provide guidance & feedback in market expansion, particularly in Southeast Asia.
3–5. How many of you are full-time and will be physically in Taipei during AW#20? *
JCF currently is part-time effort for all involved. Shun-Yun still needs to look after his first company Imonology 50% of the time, but he does go to Taipei 2–3 days a week.
3–6. Please check if following statements apply to your team:
(Will not affect your candidacy. But we might contact you for more details.)
 1-person team
 All students
 Most of you not moving to Taipei for AppWorks
 No developers
3–7. Incorporated? Please provide information.
JCF is registered as a Taiwanese company with reg number: 50791133 in July 2018.
3–8. Have you raised equity / coin / token rounds from investors? Please share the details.
3–9. Your current monthly cash flow? How much runway do you have?
No revenue at this stage, though the current operations can be executed with a very low cost, so we have an almost infinite runway.
3–10. Any plans to raise money in the near future? How much do you plan to raise? What is the use of proceeds?
Yes. USD 1M is our target. The additional capital will be used in 3 areas:
- marketing (onboarding social organizations and retail investors)
- security upgrade for institutional investors
- prepare for blitzscaling when the next crypto bull market arrives
3–11. Anything else we should know?
(If you are an alumni or have applied to AppWorks Accelerator before, please let us know here.)
We applied for AppWorks #18, and got to the interview stage.
We have attended WebSummit’18, Collision’19, and WebSummit’19. We got to know both Tim Draper and Yancey Stricker (cofounder and former CEO of KickStarter) as a result. We just got invited to exhibit as a Beta Startup at Collision’20 in June. 2020.