JCF's YC Application (Summer 2021)
It’s that time for startup accelerator Y Combinator to receive applications. JCF has been applying to YC for Winter 2020 and Winter 2021 and attended its Startup School.
Although we hadn’t gotten in (yet!), and had gone through Hyper Accelerator instead (which had been a great experience and we highly recommend!) Each time we’ve found that filling out the YC Application form is a good exercise.
We’ve heard in the past that a particular startup had applied 8 times before getting in to YC, but was improving each time during the application, we’d like to see if we can break that record :)
So in the spirit of JCF’s core values: “transparency, simplicity, and trust,” we’re releasing and sharing again our application form, and hope it’ll be of help and inspirations to other founders and startups.
COMPANY
Company name:
Joint Commonwealth Inc.
Company url, if any:
If you have a demo, what’s the url? Demo can be anything that shows us how the product works. Usually that’s a video or screen recording.
option 1 (JCF User Tutorial)
https://www.youtube.com/watch?v=7EMMGnvz0UU&list=PL1Ltuy_3CNRP329LtucuVvHB-eMz-47D5&index=5
option 2 (JCF Promo Videos)
https://www.youtube.com/watch?v=Ekb5niWlEsk&list=PLt0gkyIE29_IYxTN7JGFHMSEs8l0PfvzH&index=4
Describe what your company does in 50 characters or less.
Evolving basic income with a crypto index fund
What is your company going to make? Please describe your product and what it does or will do.
(50 words)
JCF simplifies access to complex crypto social investments. The initial product is a 0% fee, top-10 crypto index fund with US$10 minimum. Profit in the “dividend pool” pays a monthly dividend, 7% of which can be a customized donation and 45% dispersed as a form of basic income.
(1-minute pitch)
Governments have been slow to act in the alarming increase in poverty and people living paycheque to paycheque in countries all over the world. New poverty segments are appearing in: pensioners, recent graduates, and newcomer immigrants in addition to a trend whereby people are spending the majority of their income on housing costs, unable to save for the future.
We are JCF inventing barrier-free access to a highly complex crypto index fund. An investment mechanism of a similar nature would be beyond comprehension or time for the average person to attempt alone. Minimum signups are only $10 USD.
With adoption at scale, we are then looking to evolve the concept of universal basic income with a crypto index fund that has a donation mechanism built into the dividend.
Where do you live now, and where would the company be based after YC?
(List as City A, Country A / City B, Country B.)
Taichung, Taiwan / Toronto, Canada
CONTACT
Personal email address of the founder who is filling out this application:
XXX@YYY.com
Phone number(s):
XXX-YYY-ZZZ
FOUNDERS
Please provide the personal email addresses of the other cofounders in the startup. No need to add yours again. Founders must have at least 10% equity in the company. We will send an email to each founder to fill out additional information about themselves.
XXX@YYY.com
Please enter the url of a 1 minute unlisted (not private) YouTube video introducing the founder(s). This video is an important part of the application. (Follow the Video Guidelines.)
https://www.youtube.com/watch?v=pB4-vT5ZuUM
Please tell us about an interesting project, preferably outside of class or work, that two or more of you created together. Include urls if possible.
Funnel marketing (advocated by Russell Brunson of ClickFunnel) is widely known in the English-speaking world, but is less known in the Chinese-speaking world (including Taiwan).
After learning about it in 2019 SY became quite interested in funnel marketing’s framework and application, and wanted to test if it can be used to promote JCF.
With the help of two other BNI members of the local chapter, one is a business coach specializing in seminar-based selling and a film director. Robert and SY tried to create a seminar-based funnel to educate and recruit BNI people to join JCF.
The result has been a few successful seminars with 25%-50%.conversion rate, and two videos, one made by Robert (English voice-over) and the film director.
Robert’s JCF for UBI video:
https://www.youtube.com/watch?v=Ekb5niWlEsk
Seminar intro video (in Chinese):
https://www.youtube.com/watch?v=al5L2tuERQA
We found that funnels indeed work for the non-English audience, though local adaptations are definitely needed. For example, culturally in-person seminars are still preferred over webinars, and manual setup by client service is very much needed for a non-tech audience.
Our final onboarding is asking a prospect to fill out a Google form in 5-minute, and using a LINE help desk to do the rest, including account setup, KYC, and even purchasing ETH for a small fee. This helps to increase conversion/onboarding rate and lower the barrier of entry.
How long have the founders known one another and how did you meet? Have any of the founders not met in person?
SY and Robert met at the local FounderSquad monthly meeting in early 2019, and after learning more of each other’s life goals and values (SY wants to be a “social entrepreneur” serving billions to create more freedom; and Robert wants to build one of the largest private equity funds in Asia), the two decided to join force on JCF.
How many founders are on the team?
(Fill out this number of founder profiles)
2
CATEGORY
Which category best applies to your company?
Fintech
PROGRESS
How far along are you?
Milestones
2018/1 project started
2018/4 alpha launched
2018/5 whitepaper first draft
2018/7 company registered in Taiwan
2018/10 JCF pilot fund launched
2018/11 exhibited as “alpha startup” @ WebSummit’18 (Lisbon)
2019/5 exhibited as “alpha startup” @ Collison’19 (Toronto)
2019/6 10-crypto rebalancing (monthly)
2019/7 redesigned for 0% fee structure
2019/9 1st dividend payment
2019/10 public service offering
2019/11 exhibited as “alpha startup” at WebSummit’19 (Lisbon)
2020/3 mechanism extracted for other tokenized assets
2020/4 AUM: ~ USD 28,000, MAU: 36
2020/6 beta startup @ Collison’20 (online)
2020/8 rollout “referral bonus”
2020/9 AUM: ~ USD 56,000, MAU: 61
2020/10 completed SUS 2020
2020/11 participated @ WebSummit’20 (online)
2021/1 AUM: ~ USD 170,000, MAU: 100
2021/2 completed VIP Fund design
2021/3 graduated from HyperAccelerator
How long have each of you been working on this? How much of that has been full-time? Please explain.
SY: since Jan. 2018, 50% — 70% time. SY still runs his first software company Imonology (a remote, agile software developer for deadline-sensitive projects).
Robert: since Oct. 2019, 30%-50% time. Robert is also founder of “Node” (a networking app for professional / entrepreneurial networking).
Are people using your product?
yes
How many active users or customers do you have? If you have some particularly valuable customers, who are they? If you’re building hardware, how many units have you shipped?
Our MAU is: 113 (as of 2021–03–15). At this time, the most valuable customers are small business owners and entrepreneurs, who are aware of the importance for investment and passive income streams, who also believe in crypto, but are uninformed; they lack the time to learn about crypto, thus do not participate in crypto investments. We are creating a “VIP” fund specifically targeted at this segment.
These VIPs are willing to put in over USD $35,000+ into JCF to earn regular dividends, and are also keen on inviting their friends and family to join. We have several cases where the parents and friends of our VIPs are invited to join (not through us).
Do you have revenue?
yes
We’re interested in your revenue over the last several months. (Not cumulative and not GMV).
Please use USD. If none, enter ‘0’
What was your revenue in March?
$0
What was your revenue in February?
$603.47
What was your revenue in January?
$273.97
What was your revenue in December?
$183.55
What was your revenue in November?
$173.38
What was your revenue in October?
$29.84
What was your revenue in September?
$40.88
Anything else you would like us to know regarding your revenue or growth rate?
The revenue above is held as JCF tokens and part of our assets and have not yet been sold to market to realized yet, as we’d like to keep them to grow continuously.
A VIP fund that returns 50% of each month’s profits to investors is expected to release in Q1, 2021. We believe our valuation at this time in the MVP stage is $250,000.
If you are applying with the same idea as last batch, did anything change? If you applied with a different idea, why did you pivot and what did you learn from the last idea?
- Yes, we created a VIP Fund that targets a segment of busy professionals that want to participate in crypto, but don’t have the time. Also, we are exploring a Toronto-subsidy for a JCF Canada. We are focusing on break-even with the VIP fund that removes the “shared dividend” design so the fund provides better return to investors (40% of profit) while also giving us a faster break-even. The “main fund” still exists and we will build different products from the core index fund. This is also due to our participation and feedback from Hyper Accelerator.
If you have already participated or committed to participate in an incubator, “accelerator” or “pre-accelerator” program, please tell us about it.
Hyper Accelerator is a virtual accelerator program offered by Ash Singh and Nilay Goyal (https://www.startupcourse.com/courses/hyperaccelerator). It runs for 100-day with weekly lessons and interactions, and a graduation pitch & call.
We have learned a lot more about company structure, the startup journey, and concepts such as fundable events. The main gains have been: 1) decision to launch a 2nd “VIP fund” to attract higher worth investors & provides faster break-even for the company; 2) fine-tuned our 1-minute pitch and core concepts; 3) discovery / realization that “dividend pool” is our core differentiating design compared with other types of funds as a “safety” mechanism to crypto investment.
IDEA
Why did you pick this idea to work on? Do you have domain expertise in this area? How do you know people need what you’re making?
We believe that crypto assets are a long-term trend that will create or shift wealth for many, if we can find a way to safely invest in this trend, while building a distribution system that could benefit society at large, blockchain will actually benefit all of us instead of a lucky few.
SY’s background has been in large-scale, peer-to-peer (P2P), distributed systems (for online games / virtual worlds), Robert’s background has been in options trading. We’re both members of the local Business Network International (BNI) chapter in Taichung.
BNI is the largest business referral network in the world with 270,000+ members since 1985, and we’ve discovered that these business owners/entrepreneurs have the sense and money for diversified investments, yet do not have the time or knowhow for crypto investments. BNI has validated the “VIP Fund.”
JCF fills in this gap by providing a safe, reliable, and trustworthy way to help BNI members (as our “initial niche”) to get involved in the crypto trend, while doing social good (regular dividend payment) easily and transparently.
50%+ of the almost 100 members in our BNI chapter already joins JCF and is growing, which shows the feasibility and demand for our approach. (JCF is now 110+ MAU with USD $140k assets under management, 40% of which is the “dividend pool”).
What’s new about what you’re making? What substitutes do people resort to because it doesn’t exist yet (or they don’t know about it)?
We combine “index investment” (from investment world) with “regular dividend” (from insurance world) using blockchain (from the tech world) to combat a serious social issue (from charity / social work world). JCF uses the combination approach to solve real problems of social issues and tech adoption issues.
For example:
For financial safety, people now rely on:
- 401k (may crash with stock market and deficit spending)
- insurance (requires long-term investment and financial discipline which most lack)
- social welfare programs (poorly and ineffectively run by governments)
For crypto investment, people now rely on:
- speculations based on all kinds of opinions, voices, and scams (will lose money)
- buy & hold (difficult to select and be disciplined about holding long-term)
- self management (difficult and inaccessible for most people)
Who are your competitors, and who might become competitors? Who do you fear most?
We frankly welcome “competitions” very much (much like the race to put men on Mars, the more the merrier and better :). As we consider this to be a “moonshot” social cause (private sector UBI that actually “works”).
We believe that the crypto-index fund can function as an ‘integrator,’ into existing platforms and funds, which is something that we are exploring with a potential JCF Canada, and may one day engage GoodDollar.
Common competitors are:
- existing cash-flow/dividend-based investment vehicles (more matured, but lower RoI)
- existing crypto investment funds (may have better RoI, but higher risks)
- other cryptoUBI projects (better funded/organized, but requires adoption at scale)
What do you understand about your business that other companies in it just don’t get?
- Most crypto companies are tailored at users familiar with tech and can onboard by themselves, there’s a greater under-served audience (the general public) that may want to get involved in crypto investment but simply have no knowledge or access.
- Very grassroots and direct approaches are required for crypto adoption (for example, we have a LINE customer service helps users to handle all manual tasks by just filling out a simple Google form in 5 minutes).
- Having a “dividend pool” that keeps all the profits and provides regular dividend, turns a “capital gain-based” investment (which is what most index funds are) into a “cash flow-based” vehicle, while greatly reducing volatility risks.
How do or will you make money? How much could you make?
(We realize you can’t know precisely, but give your best estimate.)
In 2020, JCF’s performance was 94% RoI, with the company getting 3% of the 25% monthly dividend payment (a 0.75% performance fee). Our annual earning is just over $1,300. This ratio is too small and requires a fund size of USD $5M+ to break-even.
For the upcoming VIP fund, 50% of the dividend pool is paid as monthly dividend, and 10% of which goes to the company (a 5% performance fee). Assuming the same 94% growth as 2020, we can break even sooner at USD $1M AUM with $47k annual revenue and become self-sustainable (ramen-profitable).
We thus expect to break-even in 2021.
The main and public JCF funds are designed to just cover costs. The real profits will be in the additional funds services tailored to high net-worth investors, such as investments into alternative energies, forestry, and social enterprises.
These funds could be based on other asset types and for a smaller audience such as family offices. As the social graph and investment behaviors of all participants are captured, we expect actual profit will come from these “level-up” fund services in the future.
How will you get users? If your idea is the type that faces a chicken-and-egg problem in the sense that it won’t be attractive to users till it has a lot of users (e.g. a marketplace, a dating site, an ad network), how will you overcome that?
We intend to target BNI members initially (globally there are 270k, in Taiwan alone there’s 4–5k). The user acquisition approach is organic and very much trust/direct marketing based as BNI is a very closed social network system with high degree of trust among its members.
Much like how Facebook spreads from one university fully before the next, we intend to get 70–80% of members within a local BNI chapter onboard before moving to the next. And Taiwan first before other countries. Our current conversion from seminars is 25%-50%.
There are “network effects” built into JCF as well, the goal is to allow users to grow organically by invitations.
- The “shared dividend” increases financial benefit for small participants, and social benefit for large participants, so value is increased with user size.
- 7% automatic “donation tokens” will allow “non-investors” to join JCF easily.
- 1% “referral bonus” will encourage existing users to invite friends and families to join.
EQUITY
Have you incorporated, or formed any legal entity (like an LLC) yet?
yes
What kind of entity and in what state or country was the entity formed?
an LLC in Taiwan.
Have you taken any investment yet?
No
If you have not formed the company yet, describe the planned equity ownership breakdown among the founders, employees and any other proposed stockholders. If there are multiple founders, be sure to give the proposed equity ownership of each founder.
(This question is as much for you as us.)
SY holds X% of equity ownership, and Robert Y%, the other Z% is for early investor/previous co-founder/employee.
Please provide any other relevant information about the structure or formation of the company.
Our ownership structure is designed where investors / management / employees will each hold 33% of the company. Founder SY will have 1% veto power over any decision.
LEGAL
Are any of the founders covered by noncompetes or intellectual property agreements that overlap with your project? If so, please explain.
No
Who writes code, or does other technical work on your product? Was any of it done by a non-founder? Please explain.
The main developer is from a former company Imonology working on JCF is also now a X% shareholder in JCF the company. The code is done by SY’s first company Imonology Inc., where he and his family holds 60%+ equity share.
Is there anything else we should know about your company?
(Pending lawsuits, cofounders who have left, etc.)
We have no lawsuits. According to our lawyer, JCF the company can operate fully legally in Taiwan as long as it’s crypto in and crypto out, and can serve users in the majority of countries. Right now only 3 countries are not served due to regulation requirements: U.S., China, Singapore. However, we do want to work with the government in making sure JCF is fully compliant with any future regulations (which currently do not exist).
The legal opinion can be downloaded here:
https://www.dropbox.com/s/4lj01n986dhd9iw/20191114-Advice%20Letter-%28Joint%20Commonwealth%20Inc%29_Final.pdf?dl=0
Our lawyer is:
https://www.linkedin.com/in/chia-heng-seetoo-b10a772/
OTHERS
If you had any other ideas you considered applying with, please list them. One may be something we’ve been waiting for. Often when we fund people it’s to do something they list here and not in the main application.
SY’s first company Imonology is building a “Flexform” framework that can easily build form-based IT systems. It’s intended to target fintech / document-centric clients to build IT system 2~5x times faster, moving along the “Low Code” / “No Code” trend.
https://www.npmjs.com/package/scalra-flexform
Robert is the founder of “Node”, a social network app for professionals that allows one to organize contacts much easier than Linkedin (an online resume), or FB (social interactions). The target audience is people such as BNI members, where business collaborations can be found easier.
Please tell us something surprising or amusing that one of you has discovered.
(The answer need not be related to your project.)
We “thought” our on-boarding process was alright, allowing users to register for their own accounts, confirm with email verification, then they can just login (which is pretty much all other crypto projects out there are doing).
However, after watching a few of our potential prospects painstakingly tried to upload document for the KYC and had to restart the whole process if one step wasn’t going through, we decided just to make a simple Google form for them to fill out basic income & upload ID, and our LINE customer service will do the rest for them.
This eases up a lot of the onboarding pain & frictions and we have since gotten over the 100+ user barrier with this approach.
Lesson learned: talk to the users, watch the users in actions, to get real feedback of what it’s like using your product and the user experience, instead of “imagining” how they’re using it.
CURIOUS
What convinced you to apply to Y Combinator? Did someone encourage you to apply?
YC is THE accelerator. We always strive to work with the best mentors and peers.
How did you hear about Y Combinator?
SY’s known Paul Graham’s work for decades and used to be a regular Hackers News reader.
SY Specific
SKILLS
Please tell us about the time you, shunyunhu, most successfully hacked some (non-computer) system to your advantage.
I was expelled from my university due to poor grades and faced serving military draft immediately for 2 years (required for all males 18 years of age in Taiwan unless enrolled as a student).
For personal reasons I went to extreme to avoid the situation, by first filing appeals for my expulsion (which succeeded and earned myself re-entrance to my university 1.5 years later), and also taking transfer exams to other schools (which would postpone military service).
The end result was that I successfully went back to school (to my knowledge the 1st student to succeed under Taiwanse education system) and postponed my military duties to after I finished my Ph.D many years later, and serving only 3 weeks in the military.
Please tell us in one or two sentences about the most impressive thing other than this startup that you have built or achieved.
VAST (http://vast.sourceforge.net/) is a network API / library that supports spatial publish / subscribe (spatial pub/sub) for location-based service (LBS) or virtual world / online games in a fully decentralized, peer-to-peer fashion. I did the majority of my Ph.D in 3 years, and published at top academic journals and conferences as a result of this work.
Are you a technical founder?
(You are a programmer, engineer, or scientist who can build the product without outside assistance.)
Yes.
COMMITMENT
Do you have at least 10% equity in the company you’re applying with?
Yes
Will you commit to working exclusively on this project for the next year?
(No school, no other jobs)
Yes.
Do you have any other commitments during the batch (between June through August 2021 inclusive)?
JCF is the main work priority in 2021, as getting its assets under management (AUM) to over USD $3M and become self-sustaining is the “keystone” goal. Though I do have responsibility from my first company Imonolgy and my two kids will be having summer vacation.
Do you have any commitments in the future and if so what?
(e.g. finishing college, going to grad school)
No.
CURIOUS
Have you been to any YC events? If so, which ones? (e.g. Startup School, University Tour, Office Hours, etc.)
2020 Startup School cohort.
