How We Work

Funding with
Training

Our biscuits and butter: Identifying and growing future category-defining companies outside of the Valley.

After we make an investment in a nascent startup, we spend the next 13 weeks in-person in Austin, TX teaching the founders how to sell and gain traction in a cohort of likeminded people building future category-defining companies. This is what we call our “accelerator,” as the main goal is to accelerate a company’s growth to product-market fit.

Though participation in the accelerator is required for each company we invest in, our only economic relationship with startups is that of an investor — we charge zero fees. “Sputnik” translates to partner, and we want to be your companion for success.

All Sputnik ATX companiesin the accelerator program receive investment on our SAFE note.

The idea of a “SAFE note” comes from the YC funding model. YC is a great accelerator program, and their note was originally developed to avoid wasting time negotiating valuation when funding large groups of companies in cohorts.

Similarly, the Sputnik ATX SAFE note enables us to focus on adding real value to what you do, and we agree to figure out the value later when you raise additional funds in your next formal funding round.

Our initial investment in each company is $100,000 on the SAFE. Additionally on the SAFE are options to invest up to $100,000 more on the same terms and up to $300,000 more with no valuation cap at a 30% discount. This reflects the need to pump additional capital into our most promising alumni who need growth capital due to epic demand.

Learn more about how the SAFE note works in our General Partner Joe Merrill’s blog, “Yes, I’d Like $100,000, but What the Heck is a SAFE Note?”

Understanding the SAFE

The Discount:

The SAFE document below states that the "discount rate" is 70%. This is sometimes confusing as we state that our SAFE includes a “30% discount”.

However; please make sure to read the definition in the SAFE document of "discount price" and how it is calculated.

The discount price is: 70% X the Standard Preferred Stock sold in Equity Financing. Basically, it says 70% because that is the multiplier needed to end up with a 30% discount.

Please Note:

The SAFE includes a valuation cap as well, and our option to add additional funding. Read it. Understand it. While inspired by YC’s SAFE, our document is not identical to theirs.

We do not negotiate on these terms.

Download SAFE

Startup Tips and Templates

Sputnik-1 changed everything. It inspired humankind to look to the stars. Like Sputnik-1, Sputnik ATX is here to help makers lift-off. We are an Austin, TX based venture capital investor and accelerator that funds early stage maker-founders. We combine capital with training and experience to help startups reach their full potential. “Sputnik” translates to "partner". We want to be your partner for take off.

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