We want to reiterate that Indie.vc is not a back up school for failed attempts at getting into other incubators, accelerators or a grander catapult to launch you into the world or traditional VC funding. This is intended to be something different.
The heart of the indie.vc model is cash distributions vs. subsequent rounds of financing which point to a future exit event. Within the indie.vc model cash distributions can be paid out to investors vs. a lump some return at the time of an exit.
Payouts will be considered a distribution once the founders salaries have increased 150%. If founders are paying themselves below market, we can work with them to determine what a market salary is for their area in order to set the baseline. Increases above amount will be considered distributions. At the time distributions begin to get made we, as investors, will share in those distributions. Initially, we will take 80% of distributions and the founders will take 20% until our initial investment has been returned 2x. Once 2x has been achieved, the schedule flips to 80% of distributions going to the founders and 20% going back to us. We will cap all distributions at 5x the initial investment. On an investment of $100k, our return would be capped at $500k.