Zypsy, a design firm with a proven track record of supporting early-stage startups, has launched a new and somewhat unique venture investment program.
We will provide up to $100,000 in brand and product design services to 10 startups over an 8-10 week engagement period with no cash payment. Instead, the startup will pay by issuing 1% of its shares to his Zypsy through a SAFE (Simple Agreement for Future Equity). There is one potential pitfall. That means if a startup needs work beyond that cap, it has to pay for it. “After the initial 8-10 week program, we will commit to a cash retainer as needed for further projects,” Zypsy co-founder and CEO Kaz Tamai told TechCrunch. .
This kind of work-and-capital arrangement is not unheard of, especially in the design world, but Zypsy has special legitimacy. The company's founding team hails from global design and technology companies such as IDEO, Fantasy, Meta, and Saatchi & Saatchi. The company is profitable, with an annual revenue run rate of his $3.2 million and annual net cash flow of his $250,000, the company says.
Zypsy helps startups with brand strategy, logos, websites, product design, app interfaces, and marketing content. The organization believes that by combining design expertise with investment support, nascent startups can scale and rise from obscurity.
Tamai said the company plans to work with 10 startups in the upcoming Design Capital cohort, primarily working with early-stage startups through carefully selected introductions from founders and venture capitalists. added. We focus on industries such as computing infrastructure, machine learning, AI, data analytics, cyber security, and the creator economy.
“Fundamentally, all startups are measured on four things: market, team, product, and traction. And founders stand tall, wear many hats, and make decisions to drive these four factors forward. We are looking for capital,” Tamai said.
Zypsy has already added five startups to the first group of the Design Capital program (in alphabetical order).
Copilot Travel: A Tennessee-based B2B2C travel cloud platform that connects travel companies and consumers through travel infrastructure. CrystalDB: Lead Hoffman-backed startup that provides a serverless, cloud-based database service. Formless: A Boston-based blockchain startup that helps creators with revenue sharing and control over their digital products.It was raised in December last year. Obtained $2.2 million in pre-seed funding From investors including a16z. Noxx: San Francisco-based AI-powered platform for hiring remote engineers. Zylon: A generative AI startup with a chatbot for small businesses built on a popular open source model called PrivateGPT. Zylon raised $3.2 million in a pre-seed funding round in February.
3-year pilot project with over 25 startups
The six-year-old design firm has worked with more than 25 startups. The organization initially started a design project for Web3 founders. Given the interest from initial customers, Zypsy has expanded the program to a broader range of technology companies, Tamai told his TechCrunch.
Previous clients we pilot tested before launching our official Design Capital program include Cortex, a startup building an in-house developer portal that enables engineering teams to build better software at scale; was included. Captions is an AI-powered video editing startup. Robust Intelligence is an AI startup that helps enterprises protect their AI models from security and operational risks, and Anyplace is a hospitality startup.
Gypsy does not own any customer stock through the pilot project, Tamai noted. He said they are “cash-based customers and not “equity-based portfolios'' like the five companies we mentioned in our original Design Capital program.''
Tamai pointed out that Zypsy currently has no plans to grow into an accelerator or investment company. “Our mission is to partner with great founders and work together towards the next billion dollar delta value, or valuation, growth through creative excellence,” Tamai told TechCrunch. Ta.
In 2023, Zypsy raised $3 million to form Design Capital. Investors include angel investors such as 1kx, Lattice, the founder of Japanese e-commerce company Mercari and his Web3 company Cega, his CDO of Rakuten, and the investment director of SoftBank Vision Fund. included.