From Application to Investment: How LongJump Decides

💙 Note from the team: LongJump invests on an application basis. If you’re currently fundraising, check to see if our application is currently open/sign-up to learn about future application announcements here.

Why Apply to LongJump?

LongJump provides seed capital to founders working on big ideas. We invest up to $100k at the earliest stages, providing the necessary capital to turn ideas into fast-growing businesses. We may be one of your first investors and we want to be the most transparent. Our hope is that this article pulls back the curtain on our process to save you time and help you put the strongest case for investment as possible. If you still have questions after reviewing, send them our way - a team member will try to respond in 24-48 hours.

LongJump is a fund built and run by founders. Our investment team is entirely comprised of active or former founders and the majority of our LPs are founders or operators. As founders, we set out to build a VC that leans heavily on founder empathy, something we hope you’ll notice differentiates us from application to how we treat you in the portfolio.

Being a part of the LongJump portfolio means our team will be responsive, there to bounce ideas around, open our networks to you, and be available for the “Hey, is this normal?” questions we all have.

What We’re Looking For

We invest across industries at the earliest stages. We don’t wait for signals from other investors and may be the first check in your business - our hope is we can be a catalytic investment in your growth.

LongJump requires companies to have some tie to the greater Chicago area. This typically means at least one founder lives in the Chicago area

We have an emphasis on founders, industries, and ideas that may have been traditionally overlooked by venture capital. This means we invest in populations that may have been historically excluded from access to capital and products that other VCs may not consider.

Most importantly, we are looking for founders we want to work with for the long haul. We know building a company is hard and we want to help you whether things are going well or in the times when you are going through it. We love founders who are vulnerable, problem-obsessed, and are eager to be a part of the larger LongJump community.

Application

LongJump considers startups for investment through an application process. This means you don’t need a warm intro or initial meeting with a member of the team (in fact, we try to avoid this to ensure fairness) to get in the door with us. Applications are reviewed on a quarterly basis and we guarantee every application is read by the entire team.

You can review our application in full and save a template to work off of here.

End-to-end, from application deadline to decision, we aim to wrap up the entire process within 2.5 months.

In reviewing applications, our team likes to see the following:

• Large Market Opportunity: Help us understand how your business can grow to be a large, category-defining company that either creates new markets or overtakes incumbents to become a leader in an existing market.

• Progress: Even if you’re pre-product, there are indicators of your velocity of progress that can help us understand what you’re capable of, even absent capital or ideal resources. Talk to us about your last 90 days - what have you done and what milestones have you hit? BE SPECIFIC! Milestones can be things like customer discovery insights, product development, pre-orders, MOUs, waitlists, etc.
  It can also be user growth, engagement depth, and sales if you’re at that point! If you’re going to give us data on user growth or sales traction, try and show us the trend in this data over time if possible. For example, the past three months of sales are more valuable data to us than just telling us aggregate lifetime sales.

• Team: We love founding teams who have a unique insight about a market, often honed from experience with the problem space or in the vertical you’re operating in. We also want to know your “why.” Tell us what makes you the team that’s going to win and what drives you as founders.

• Transparency and Specificity: If we haven’t said it enough, we deeply value founders who can shoot straight with us, avoid overselling, and are as specific as possible in answering our application questions. Remember - we’re founders too, so we review applications from a place of understanding and empathy.

Things that may commonly lead to a “no”:

• You’re outside our geography. If you have questions on what qualifies as Chicago, send us an email at hello@longjump.com. We’d rather clarify in advance before you invest time on the application.

• You’ve been working on this idea for years with no progress.

• Our terms don’t work for you/fit for your business

• You’ve already raised a significant amount/have a crowded cap table. The majority of our portfolio received their investment from LongJump at or before raising ~$1M.

Also, it goes without saying - if you phone-in the application, we’re likely to discount it. So don’t do that 😉.

We may not provide substantial feedback at the application stage, but you will hear from us, regardless of our decision.

The Conversation (1 hour interview with partners)

We want to get to know you and the business - this should be more of a conversation than a formal pitch. We’re not going to ask you to do a deep dive into financials or run through a pitch deck (unless you have a slide you’d like to show that helps illustrate a point).

You can expect to be asked about your business, why you/your team are the ones to work on this, and may be asked to demo. We’ll want to get a feel for who your customer is and how you’re solving their problems, how big the market could be, and the progress you’ve made so far. Finally, we’ll want to understand why now is the time for our investment and what the immediate future looks like for your company.

If you reach the interview stage, we will provide feedback if we do not decide to invest in your company. If we do decide to move forward, you’ll enter Partner Diligence before a final decision.

Diligence (4-8 weeks after interview)

After your interview, the partnership will discuss if we want to proceed further, and if so, one partner (sometimes two) will be designated as your deal lead.

This partner will then work directly with you to answer any additional questions we have before making an investment decision. This process sometimes involves members of the LongJump network with specific domain expertise in your market. This helps in our diligence and also gives you the opportunity to get to know the fund LPs who may be strong advisors for you post-investment.

Diligence can take some time and we know this can be an anxiety-inducing time for founders. We promise we’ll be in touch and our silence doesn’t mean we’re leaning one way or another, this is just an intensive part of the process. Don’t be afraid to check in with your deal lead here if it’s been a while since you’ve heard from us - we’re happy to give an update.

If we decide not to invest at this point, you will hear from us and we will provide feedback on the decision.

Final Decision

If your deal lead(s) would like to move forward, they will put together a deal memo recommending your company for investment. This is presented to the partnership in order to address final questions and build alignment on a decision.

We do not require partner consensus to invest. Assuming the deal lead is a strong yes and has at least one other partner with a similar commitment to the deal, we’ll make an offer.

After our final “yes”, typically move through administrative diligence (i.e. getting proof of incorporation, cap table review, etc) within a week of our offer, at which point we execute docs and wire.

Want to hear more about applying to LongJump, straight from our founders?

➡️ Tips for Applying to LongJump from Luis Suarez, Founder of Sanarai

➡️ Tips for Applying to LongJump from Andy Freivogel and Luisa Castellanos of Science on Call