Frequently Asked Questions
What is LongJump?
Simply put, LongJump is an investment fund, run by founders and operators. We invest in high potential founders and help them turn their ideas into fast-growing businesses. In addition to capital, we also provide connections and community to our portfolio, helping to connect you with other investors, employees, and advisors.
How much do you invest?
Generally, we write $100k checks.
Is LongJump an accelerator or incubator?
No. There is no content or programming associated with LongJump right now. We make investment decisions once per quarter, but after we invest we help you when you need it and stay out of your way when you don’t.
Do you lead rounds?
It depends. We like to be the first outside investor in your company. If that’s the case, and we can be a catalyst for other investors to invest, then yes we will “lead”. But in many cases, we don’t expect or require you to want to raise additional capital — our goal is to help you move quickly, de-risk your business, and achieve the milestones you need to raise additional capital or reach profitability down the road.
What do you invest in?
We are focused on business that:
Are headquartered in the Chicagoland area or within a few hours drive
Haven’t yet raised significant outside capital
Are technology-focused or tech-enabled and can scale rapidly
Are in industries and utilize business models where our investment can help them make meaningful progress.
Further, we look for businesses that have at least one of the following:
A member of their founding team from an underrepresented group, or
That the business concept, customers, or market be focused on serving underrepresented groups, or
That the business concept, customers. or market be something that wouldn’t normally be funded in Chicago / the midwest.
Outside of those guidelines, we will focus on the quality of the founding team and their unique insights on their market and will be open-minded about the markets they serve.
What makes you different?
Today, there are (unfortunately) very few funds like LongJump:
We believe you’re going to build a great business. We aren’t providing grants or treating this as a charity. We think you’ll build the next Grubhub, Sprout Social, Cleversafe, and Cameo - and enable us to fund the next generation of great entrepreneurs like you.
We’re fellow founders. We know the pain of fundraising and company building firsthand because we’re doing it in our own companies, right now. We’ll do everything we can to help you learn from what we’ve experienced (and are experiencing).
We invest earlier than others will. You don’t need revenue, traction, or a lead investor in your round for us to invest in you.
We’re focused on overlooked founders. We have firsthand experience with problems most investors don’t - we’re excited to work with founders and industries others don’t understand the potential of.
We don’t need warm introductions. We believe great founders are everywhere, including outside of the existing LongJump network. All potential investments go through the same application and decision-making process.
We put Chicago tech behind you. Many of Chicago’s best founders and operators (across every function and industry you can think of) are investors in LongJump and a part of the LongJump network. They invested because they believe in you - and are excited to roll up their sleeves to help you succeed. And as our portfolio grows, you’ll learn from each other.
Which investment option, SAFE or common, is best for me?
We invest in companies that have different capital needs, timelines, and plans for the future.
Some companies view us like part-time co-founders and want to align us perfectly with them, so they choose the common option.
Other companies want to generate some early fundraising momentum, so they choose the SAFE option.
When we make an offer, we typically have a detailed discussion with founders about which structure we think will benefit their company the most, but always leave it to them to make a final decision.
I’ve already raised on different terms than your standard options. Will you take my existing terms?
Generally speaking, no.
We generally invest at a much earlier stage than other investors, before you have a full team, a launched product/service, revenue, or other investors. This is the reason we exist, but it also carries significant risk. That risk requires us to stay within some clear boundaries for terms we invest on.
That said, we’ve had portfolio companies who previously raised capital on different terms than ours accept our offer. They placed significant value in the role our partnership & network could play in their future growth.
How are the SAFE and common terms you offer different?
The primary difference between the two is that a SAFE generally converts into preferred shares (at a priced round), which comes with some advantages:
A liquidation preference over common shares. Tactically, this means that when your company exits, preferred shareholders have the option of getting their investment back first before common shareholders see any returns. Put another way, most investors get their money back first before the founders and team get anything.
Preferred class rights. While this is usually negotiated during each subsequent fundraise, some typical rights include:
The ability to block meaningful transactions (acquisitions, fundraises, taking on debt)
Anti-dilution - meaning that if your company ever experiences a down round, preferred shareholders get more shares in the company so their ownership is less affected (out of your ownership)
The ability to appoint a director (or directors) to the board
Depending on the fundraise process, some companies have each round of investment as its own separate preferred 'class', who may each have independent abilities to do the above, as well as creating a 'stack' of different investors with different liquidation preferences that have to be cleared before you see any return.
As a result, common shares are seen as a less valuable security than preferred shares. By investing in common, we also align ourselves directly with you - when you choose that option, we only make money when you do. This is different from essentially every other investment fund - who exclusively invest to get preferred shares.
I want to get involved & help LongJump. How can I do that?
Awesome. Just contact us hello@longjump.vc.