JCF’s YC Application (Winter 2021)
Y Combinator (YC) is one of the most well-known and important startup accelerators that popularized the “startup class” model, where a batch of selected startups are incubated intensely for a few months and then “graduated” to take off.
Famous graduates include AirBnB, Dropbox, Stripe, which all went on to become multi-billion dollar companies.
At JCF, we recognize the problem (bridging the wealth gap and make basic income universal — Wealth for All) we’re tackling is a “grand challenge” problem, one as old as humanity itself.
So likely we won’t be able to do this alone, and we will need the best teams, best mentors, and best partners, to make this happen. That’s why we’ve applied for Taiwan’s “AppWorks #20 batch,” “a16z Crypto School,” and “YC 2020 Winter” in the past.
There’s also been a tradition that we share the relevant parts of our application, as part of our core values is “transparency” (the other two are “simplicity” and “trust”), in hope that it’ll serve as a useful reference and record for the startup community and aspiring founders. Hope you’ll enjoy!
Y Combinator Startup Application Form Winter 2021
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.
Describe what your company does in 50 characters or less.
Cryptocurrency index fund to make basic income universal.
What is your company going to make? Please describe your product and what it does or will do.
Joint Commonwealth Fund (JCF) is a social impact fund aiming to bridge the wealth gap by making basic income universally available. It’s a top 10 crypto index fund with 0% annual fee and monthly dividends, half of which is shared equally among all participants to realize basic income. All fund profits go into a “dividend pool” where 1/4 is paid out as a monthly dividend. 7% of the monthly dividend is required to be donated or given to another person or social organization, to allow non-investing parties to also participate.
Where do you live now, and where would the company be based after YC?
Taichung, Taiwan / Taichung, Taiwan
Please enter the url of a 1 minute unlisted (not private) YouTube or Youku video introducing the founder(s). This video is an important part of the application. (Follow the Video Guidelines.)
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.
As we were preparing for a seminar to explain JCF to more people, we mentioned some famous people who had supported UBI in the past. So Robert thought it’d be nice to make a video of people such as Martin Luther King Jr. and Elon Musk, both advocates of UBI. Once the concept was laid-out, Robert found some video clips, Shun-Yun did some voice recording using just the LINE instant messenger. After 5 hours of work from Robert, this was the result:
How long have the founders known one another and how did you meet? Have any of the founders not met in person?
We have known each other since 2019 through a mutual friend at the Founder’s Squad event, a monthly gathering of founders to share and support each other. After some exchange outside of the event later, we found out we shared a lot of common values and goals, and SY invited Robert to join JCF to help with sales/marketing, and later investment strategies.
Through Robert, Shun-Yun also became a member of the same local BNI community, an international network of breakfast business meeting that meet on a weekly basis. We’ve since discovered that JCF appeals to many of the BNI members (currently about 270,000 members world-wide) and may be our starting niche.
How many founders are on the team?
Which category best applies to your company?
How far along are you?
2018.01 project started
2018.04 alpha launched
2018.05 whitepaper first draft
2018.07 company registered in Taiwan
2018.10 JCF pilot fund launched
2018.11 exhibited as “alpha startup” @ WebSummit’18 (Lisbon)
2019.05 exhibited as “alpha startup” @ Collison’19 (Toronto)
2019.06 10-crypto rebalancing (monthly)
2019.07 redesigned for 0% fee structure
2019.09 1st dividend payment
2019.10 public service offering
2019.11 exhibited as “alpha startup” at WebSummit’19 (Lisbon)
2020.03 mechanism extracted for other tokenized assets
2020.04 AUM: ~ USD 28,000, MAU: 36
2020.06 “beta startup” @ Collison’20 (online)
2020.08 rollout “referral bonus”
2020.09 AUM: ~ USD 56,000, MAU: 61
How long have each of you been working on this? How much of that has been full-time? Please explain.
SY: since 2018.01 (40%) SY also still operates his first company Imonology, a software company.
Robert: since 2019.10 (30%) Robert does options trading professionally.
Are people using your product?
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?
61 active users (determined as JCF token holders who receive monthly dividends). The most valuable ones we encountered have been small business owners/founders who recognized the importance of investment, and are interested in alternative forms of investments (esp. tech trends), and who wouldn’t mind to do so some social good along the way.
Do you have revenue?
Anything else you would like us to know regarding your revenue or growth rate?
If the fund size exceeds a certain amount (USD $10M), we’ll have self-sustainable revenue through the 3% company tokens we take from monthly dividends. Our user and fund size doubled between roughly 2020.04 and 2020.09.
We don’t expect to earn much profit from operating the main JCF fund. However, the social graph and investment behaviors we captured are ideal to recommend additional “up-sell” of more sophisticated events. where actual profits will be made.
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?
- We’ve adopted a more secured mechanism (MACD in/out)
- We’ve launched a 2nd options fund in closed alpha mode, to experiment with “tokenizing” other investment vehicles.
- We’ve roll-out our referral program (you get 1% of the monthly dividend for someone you referred into JCF), so originally there’s a 3% team token taken from monthly dividend to support JCF operations, right now that is reduced to 2%.
If you have already participated or committed to participate in an incubator, “accelerator” or “pre-accelerator” program, please tell us about it.
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?
Wealth/income gap has been SY’s long-term concern, yet we’ve always felt powerless, that is until the 2017 crypto boom. After studying crypto’s nature, SY was convinced that a massive wealth creation/shift is going to take place, and it may be an opportunity for those “have nots” to become the “have”s. However, a reliable & safe investment mechanism is needed. When the idea of applying the proven “index fund” mechanism was thought up and saw demonstrated by another fund (Crypto20), it became clear that an automatic wealth creation / distribution mechanism may be built to help people through access to the cryptocurrency trend, creating wealth for people, while re-distributing the profits for social benefits. This concept was published in a blog post (http://syhu.blogspot.com/2017/12/on-basic-income-and-cryptocurrency.html), and JCF went into development in Jan. 2018.
In a way, the founders (SY & Robert) are the target audience of JCF: young entrepreneurs who are raising young families, with daily expenses to cover and looking for passive income streams, yet are also concerned with social welfare. JCF was the vehicle we created to protect our own children from the upcoming financial turmoil and inequality, and we’d like to see other families be covered as well.
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)?
None of the components are new: but the combination of crypto, index fund, and UBI concept is new.
For people with investment needs, right now they go for picking stocks on their own, or investing in index/mutual funds. Yet those vehicles often charge much higher fees and we believe as asset classes, none of the existing ones (stocks, metals, real estate) will experience a growth curve like crypto assets.
For people who want to support social welfare, right now they can donate to charitable organizations, but on average their operating efficiency is less than 70% (30% on admin expenses is considered efficient), while transparency is often questionable. However, crypto donations such as those provided by JCF could change that. Better yet, JCF donations are a crypto asset that could grow in value over time, which is also more desirable for NPOs or those interested in holding assets long-term.
Who are your competitors, and who might become competitors? Who do you fear most?
There are existing traditional funds and/or crypto funds that compete with us (such as Crypto20). But none really has a social mission as the core of their service design/philosophy.
There are also other crypto UBI projects (Mannabase, GoodDollar), but mostly they distribute their own tokens in hope that the tokens will gain value after adoption/circulation. Whereas JCF doesn’t require much circulation/adoption for it to become a useful investment/social impact vehicle.
There are UBI ideas/concepts being pushed, however, likely it’ll take a while before governments take them seriously.
We don’t really fear competition as this is a space that almost no one else is interested or bold enough to enter. Also, we can form useful collaborations with other crypto UBI projects (we’ve already talked with GoodDollar in the past and we might accept GoodDollar as a form of payment for JCF investments in the future).
What do you understand about your business that other companies in it just don’t get?
- Funds can be designed and operated ultra-efficiently with the latest technologies (such as blockchain), so a 0% fee is doable.
- There’s a demographic of young people who don’t trust existing systems enough to want to participate (or are simply being left out), but who still have investment needs, and the desire to do social good.
- When your core goal is not to make money but to have the maximum social impact, you can design a service that no one else can.
- Socially conscious small business owners like our idea a lot (like members of our local Business Network International chapter)
How do or will you make money? How much could you make?
(We realize you can’t know precisely, but give your best estimate.)
We take 2% of the monthly dividend paid to all participants to cover our expenses. If the size of our principal crypto index fund is large enough (assets under management, or AUM > USD $10M), then we should be very well equipped to sustain ourselves long-term. Our real money-making business will be to “up-sell” other financial services to existing JCF participants in more niche areas. We also intend to leverage the social network of our user, as all participants need someone else to intro them into JCF.
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 currently have found success in attracting local business professionals/owners in one of Taiwan’s Business Network International or BNI chapters. BNI, founded in 1985, is the largest business referral network in the world with 270,000 members. We’ve found that JCF is quite attractive to investment-conscious but busy business owners, who are seeking good investment opportunities, but also wouldn’t mind doing social good. Our roadmap / goal is to first close 90%+ of the members in our local BNI chapter, and then move on to other chapters in Taiwan (similar to how FB first expanded from campus to campus).
As a second strategy, we intend to utilize “funnel marketing” to host webinars that explain our concepts and demonstrate our profitability, to a wider audience, and offer different fund types in the future (for example, investing in stocks, real estate, precious metals, etc.) that may suit different investment needs.
Have you incorporated, or formed any legal entity (like an LLC) yet?
Have you taken any investment yet?
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.)
Currently SY holds 85% of equity ownership, and Robert 10%.
We expect to move in the future in a structure where invest / management / employees will each hold 33% of the company. Founder SY will have 1% veto power over any decision.
Are any of the founders covered by noncompetes or intellectual property agreements that overlap with your project? If so, please explain.
Who writes code, or does other technical work on your product? Was any of it done by a non-founder? Please explain.
JCF was built by Imonology Inc., SY’s first company where he holds majority (50%+) ownership.
JCF was built by Imonology Inc., SY’s first company where he holds majority (50%+) ownership.
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 now that can easily build form-based IT systems. The intention is to target fintech/financial companies and help them build IT systems quickly. This is in line with the “Low Code” to “No Code” trend.
Robert is also the founder of his own company, Node, a social networking app for professionals that allows you to organize your social network much easier than existing tools such as LinkedIn (which now just serves as an online resume), or FB (which is just a social feed). The target audience is people who want to easily make business connections with people locally or make connections with people who share the same interests and easily manage and organize their connections all in one place.
Please tell us something surprising or amusing that one of you has discovered.
Contrary to our previous views, people actually invest in JCF without understanding or caring too much of the product and its details. They simply join due to trust in Robert or SY.
Also only after talking with users, did we start to realize our existing ways to onboard people is a lot more difficult/challenging than we originally expected.
What convinced you to apply to Y Combinator? Did someone encourage you to apply?
How did you hear about Y Combinator?
YC is THE startup accelerator. SY’s known Paul Graham’s work for decades and used to be a regular Hackers News reader.
Winners work with winners.