Cost of attending the UEA2017 program

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We are in the business of growing early stage companies. Our cost structure below is designed with just the same thinking in mind. Do not let the cost be a deterrent to you accessing the much needed support you need to grow your company. Reach out to our CEO Joachim Ewechu at joakim@unreasonableeastafrica.org, in case you have any questions or would like to learn more about the cost structure below.

Total program cost. A small fee upfront + the rest as you grow.

Why? We believe in the growth potential of all the companies that we select to attend our programs and work around the clock to surround them with ALL the resources that they need to grow. This year, it is costing us $33,000 to support the growth of each company. Luckily, we have a generous funding partner that is subsidising about 50% of this cost. But we still know that $16,500 is an impossible amount for any of the companies that we select to afford upfront, which is why we bet on the future of the company, so that the company pays the bulk of this cost as it’s revenues grow – leaving no liability on YOU.

Companies participating in our UEA2017 program will have three payment options to choose from with a combination of an upfront fee and a revenue share agreement. We also have a money back guarantee. See the tuition options below:

  • OPTION A: $2,000 upfront + $13,000 (2% Revenue share)
  • OPTION B: $1,500 upfront + $15,000 (2% Revenue share)
  • OPTION C: $1,000 upfront + $16,000 (3% Revenue share)

 

Here is how it works:

Upfront payment. Based on the tuition option selected, companies will pay a total of $2,000, $1,500 or $1,000 to participate in our 2017 program. Companies will have until 30th June, 2017 to fully make this payment. Unfortunately, we will not have the Unreasonable Marketplace this year(see why below). Please reach out to us if you would like to talk more about the upfront payment.

Revenue Share. Companies will then agree to a revenue share agreement with Unreasonable East Africa based on the tuition option selected where they will pay a percentage of their gross annual revenues from all sources (excluding funds raised) until they pay Unreasonable East Africa an accumulated total of the balance of the tuition.  In this case, companies will either pay:

  • 2% of gross annual revenues until an accumulated total of $13,000 for tuition option A
  • 2% of gross annual revenues until an accumulated total of $15,000 for tuition option B
  • 3% of gross annual revenues until an accumulated total of $16,000 for tuition option C

Please note that we have incentives to discount the revenue share fees if the full tuition is paid off in a short period of time. We can discuss this at a later time.

Floor based on a previous financial year’s revenues. The percent of annual revenue share will not be charged on the company’s’ annual revenue earned in the financial year preceding acceptance to Unreasonable East Africa. We will only charge the percent on the difference between the revenues after the Institute and revenues before the Institute. Please see more about the terms in the FAQs below.

Money back guarantee. We are very confident in what Unreasonable East Africa offers but if for any reason you do not feel like you gained any value from the experience after going through the program,  you have the option to renegotiate the revenue share terms in the last 3 days of the program. Read more about the guarantee below.

We do not want the cost of our program to be a deterrent to the best entrepreneurs to attend our program. As a result, we would love to hear from you especially if you have any questions and/or concerns. Just send a quick note to our CEO, Joachim Ewechu at joakim@unreasonableeastafrica.org . We are here to help you!! Read more about the tuition terms below.

FAQs

  1. How is the revenue share calculated?
  2. What are the other terms for the revenue share agreement?
  3. Why this option is beneficial to you
  4. But why charge a revenue-share agreement? Why not a flat fee? Why not equity?
  5. Why are we not having the Unreasonable marketplace this year?
  6. I’m not sure how I feel about a revenue share agreement. This is scary.
  7. What does the cost of attending the program cover?
  8. What does support after the 5-week program look like?


1. How is the revenue share calculated?

Assuming that your company generates an annual revenue of $Y in the financial year before your company is selected to the UEA2017 program and an annual revenue of $X in the financial year after the 2017 UEA 5-week program.

If you choose tuition option A

You will have to pay 2% of the positive difference between $X and $Y until an accumulated total of $13,000. In this case:

  • 2% of $(X-Y) every year until the annual payments collectively total $13,000. You will not pay any figure of the value $(X-Y) if this figure is a negative.

For example:

  • If X is $60,000 and Y is $50,000, you will have to pay 2% of ($60,000-$50,000). This amounts to $200 paid to Unreasonable East Africa that year.
  • If X is $20,000 and Y is $30,000, you will have to pay 2% of ($20,000-$30,000). This amounts to -$200. This means you will not have to make any payment to Unreasonable East Africa that year.

This arrangement continues until the positive collective payments made annually total $13,000. Meaning Rev Yr 1 + Rev Yr 2 +…=$13,000. By the time you complete making this payment, your company will have seen a total growth in revenues of at least $650,000.

If you choose tuition option B

You will have to pay 2% of the positive difference between $X and $Y. In this case:

  • 2% of $(X-Y) every year until the annual payments collectively total $15,000. You will not pay any figure of the value $(X-Y) if this figure is a negative.

For example:

  • If X is $60,000 and Y is $50,000, you will have to pay 2% of ($60,000-$50,000). This amounts to $200 paid to Unreasonable East Africa that year.
  • If X is $20,000 and Y is $30,000, you will have to pay 2% of ($20,000-$30,000). This amounts to -$200. This means you will not have to make any payments to Unreasonable East Africa that year.

This arrangement continues until the positive collective payments made annually total $15,000. Meaning Rev Yr 1+Rev Yr 2+…=$15,000. By the time you complete making this payment, your company will have seen a total growth in revenues of at least $750,000.

If you choose tuition option C

You will have to pay 3% of the positive difference between $X and $Y. In this case:

  • 3% of $(X-Y) every year until the annual payments collectively total $15,000. You will not pay any figure of the value $(X-Y) if this figure is a negative.

For example:

  • If X is $60,000 and Y is $50,000, you will have to pay 3% of ($60,000-$50,000). This amounts to $300 paid to Unreasonable East Africa that year.
  • If X is $20,000 and Y is $30,000, you will have to pay 3% of ($20,000-$30,000). This amounts to -$300. This means you will not have to make any payment to Unreasonable East Africa that year.

This arrangement continues until the positive collective payments made annually total $16,000. Meaning Rev Yr 1+Rev Yr 2+…=$16,000. By the time you complete making this payment, your company will have seen a total growth in revenues of at least $533,000.

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2. What are the other terms for the revenue share agreement?

Terms: A percent of the company’s gross revenues from all sources, excluding funds raised, loans, sales of securities, insurance claims, litigation settlements, customer refunds or reimbursements, write-off, and non-cash revenue from partners or joint ventures, delivered to Unreasonable East Africa in annual payments.

Initial Payment: Initial payment begins in the next financial year of the company. We will work with each of our companies to establish when this is.

Guarantee: The company will have 3 business days within completion of Unreasonable East Africa’s program to lower or eliminate owed royalty payments to Unreasonable East Africa, depending on satisfaction with the program. If the company exercises this option, it will be required to provide extensive feedback to Unreasonable East Africa as to why it chooses to exercise this option.

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3. Why this option is beneficial to you

  • You get to pay your full tuition over time. It is easier on your business with our flexible payment terms where you pay as you grow.
  • We are invested into your company and our support(incentives) is aligned with your success. We get paid with the more revenues you generate although this payment will be to a service already delivered. But this also means we work hard to ensure our support helps your company grow.  
  • You have a guarantee that our program will be effective. In this case, you have a guarantee where in the last 3 days of the program,  you can lower or eliminate the terms of the Revenue Share agreement depending on satisfaction with the program.  If the company exercises this option, it will be required to provide extensive feedback to Unreasonable East Africa as to why it chooses to exercise this option.

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4. But why charge a revenue-share agreement? Why not a flat fee? Why not equity?

We are doing this because:

  • Early-stage entrepreneurs do not have free cash, and charging a high upfront fee deters many applicants.
  • Some of our companies have exit potential, in which case, they tend to prefer to keep equity and ownership in their company for founders, funders, and employees.  
  • Some of our companies are not planning to exit. Equity in these companies doesn’t make a lot of sense.

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5. Why are we not having the Unreasonable Marketplace this year?

The Unreasonable Marketplace was a customised crowdfunding platform that we have to help our entrepreneurs raise a part or all of their tuition. The marketplace was open for 30 days during which time companies reached out to their network and we at Unreasonable East Africa reached out to our network to get the funds needed to attend. In the past years, we have seen lots of our companies raise a significant part of their tuition on this platform.

In the past two years though, we learned that this platform was not effective for what we had designed it for. About three quarters of our past two cohorts have struggled to raise their tuition on this platform. It was getting difficult and took these entrepreneurs too much time. This is why we are opting to discontinue its use this year, and we greatly apologise to anyone that was looking forward to using this platform.

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6. I’m not sure how I feel about a revenue share agreement. This is scary.

We don’t blame you. That’s why we have a guarantee in this agreement. Some entrepreneurs who have come through Unreasonable East Africa have been skeptical of the value of Unreasonable East Africa beforehand. We fully understand, which is why we will take the risk out of it for you. We will only receive royalties on the amount of revenue you make as your company grows. You pay only a small amount to us upfront. It’s our job to help you drive those revenues and raise the funding you need to grow the company. We become active supporters in your future. This means we only receive payments when you generate more revenues.

We have also run three programs in East Africa so far and have seen such incredible results with us and the companies we have worked with. See some of our results here including some testimonials from some of our past fellows.

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7. What does the cost of attending the program cover?

  • Our team costs throughout the 10-month program, including ongoing support after the program
  • Your food and housing (meaning you’ll have zero expenses at the 5-week institute itself)
  • Airfare, food, and housing for all visiting mentors and capital partners
  • An in-house chef and ingredients for fresh, delicious meals every day
  • Staffing our 5-week institute team  
  • Events like the Unreasonable Launchpad (where you’ll share your story in front of hundreds of people to garner even more resources!)
  • Ongoing Alumni Support and maintaining the Unreasonable Network.

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8. What does support after the 5-week program look like?

We actively continue supporting our entrepreneurs after our 5-week program. We continue matching you with mentors as the needs of your company evolve over time and funders as you keep fundraising as you grow. You also become part of a network that currently consists 29 companies, 100+ mentors, and hundreds of funders all working to grow companies in East Africa.  

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