Introducing Contango
Q: Can you introduce yourself and your startup?
A: My name is Kamel, and I’m one of the co-founders at Contango, a company operating within the decentralized finance, or DeFi, space. At Contango, we specialize in offering what we call C perps, short for Contango Perpetuals. These are financial instruments designed to allow users to take a position on the market, providing not just investment opportunities but also a form of protection, similar to insurance, through what’s known in the industry as hedging.
Q: How did the idea for your startup come about?
A: The concept of Contango was sparked during the COVID-19 pandemic. We were engaged in a common financial strategy known as cash and carry, which we applied to centralized exchanges like BitMEX and Binance. This strategy involves arbitrage between the futures price and the spot price of assets. Our aim was to adapt this strategy to the decentralized finance (DeFi) space. However, we encountered a challenge: the product necessary for this strategy, specifically futures, was not available in DeFi at that time. This realization led us to the idea of developing a platform that could offer dated futures within the decentralized finance ecosystem, mirroring the functions available in centralized exchanges.
Why SOSV?
Q: What motivated you to join SOSV?
A: Interestingly, our journey to joining SOSV didn’t follow the conventional path of actively seeking out an accelerator program. Instead, it all began when we participated in a crypto hackathon called ETH Global. While we were there, several venture capitalists approached us, one of whom represented SOSV and its crypto-focused venture arm, D-Lab. It was this encounter that set everything in motion. So, in essence, we didn’t initially set out to join an accelerator; the opportunity with SOSV/D-Lab came to us as a result of our involvement in the hackathon and the interest we garnered from the venture capital community there.
SOSV Application Process
Q: Did you go through a traditional application process to join SOSV?
A: No, our experience with SOSV didn’t involve the classical application process typical of many accelerators. Initially, there wasn’t any formal procedure we followed to get in. Of course, we did have to complete some paperwork, later on, to officially join a cohort, but the process wasn’t about applying in the traditional sense, going through a selection committee, and then getting approval to join the program. It was quite the opposite for us; SOSV reached out to us directly and moved quickly to make an initial investment. The entry into SOSV’s ecosystem was more of a direct recruitment rather than us seeking them out through a formal application.
Q: What do you think caught SOSV’s attention and led them to invite you to their program?
A: I believe it was a combination of factors that drew SOSV to us. Firstly, our clear vision for the product played a crucial role. At that time, we were also engaging with another entity, Advanced Blockchain, which showed our deep involvement in the decentralized finance and crypto space. Our knowledge and understanding of DeFi and crypto were thoroughly vetted through many questions, making our expertise in these areas a significant attraction point.
Additionally, the composition and dynamics of our team were equally compelling. The co-founders had known each other for a while, bringing a solid foundation of trust and mutual understanding to the table. Our backgrounds were strong in finance and software, with a diverse set of skills among us, covering both the technical aspects like backend and frontend development and the business side, including business development.
Moreover, our ability to deliver tangible results was a key factor. By the end of the hackathon, in just three weeks, we had not only conceptualized our idea but also developed a working product complete with marketing materials, documentation, and a pitch deck. We even had a demo that allowed users to interact with our application directly. This demonstration of our capacity to deliver, even with a small team, was likely a persuasive proof of our potential. It showed that we were not just about ideas but about executing and bringing those ideas to life, which I think was instrumental in their decision to bring us into the program.
Inside SOSV’s Program
Q: After joining their cohort, what was the structure of SOSV’s program like?
A: I’d like to clarify that while SOSV is a well-known entity in the US with structured programs, our experience with them, especially in the industrialized finance and crypto sector, was a bit different. Our program was a collaborative effort between D-Lab (which is part of SOSV) and Advanced Blockchain. It wasn’t a traditional setup with a structured schedule, mandatory in-person meetings, or assigned mentors that we had to report to. It was quite distinct from other accelerators, such as Entrepreneur First.
The program was more about providing resources, support for pitching ideas, guidance on the fundraising process, and offering help on various fronts without a fixed schedule or specific mentors. Essentially, it functioned as an investment coupled with access to a vast networking community. When needed, they facilitated introductions to investors, provided legal guidance—crucial in the crypto space—and offered support in areas like hiring, though we already had our network for that. Through our partnership with Advanced Blockchain, we also gained insights from their deep expertise in decentralized finance, including support from their research team. As first-time founders in the DeFi space, having access to such a wealth of knowledge and resources was invaluable, especially receiving guidance from someone with more experience in a field as complex and nuanced as decentralized finance.
Q: How did you access mentorship within the program?
A: The approach to mentorship within the program was very casual and flexible. It was as simple as having a chat with the team, and if we needed specific advice or had questions, we could easily bring them up. Responses were quick; straightforward inquiries were answered directly in the chat.
For more complex issues, scheduling a call with the relevant expert was straightforward. This meant that if we had a technical query, we’d be directed to someone with the appropriate expertise, which differed from whom we’d talk to for advice on fundraising, for example. The structure wasn’t about having a large pool of mentors from which we could choose. Instead, our access was more focused, typically involving two to three specific individuals from the D-Lab side.
If we needed specialized knowledge, they were prepared to connect us with the right resources. This setup was particularly effective due to the partnership with Advanced Blockchain, which provided deep technical insights, especially for defining mechanics within the DeFi space. The collaboration between the two organizations offered a well-structured program that balanced broad support with access to specialized knowledge, tailored to our needs in the rapidly evolving DeFi sector.
Q: Can you share the range of funding provided by the accelerator?
A: For our case, the funding details are public. Our initial pre-seed funding amounted to $300,000, which was a joint contribution from Advanced Blockchain and SOSV, or possibly dlab as part of the collaboration. This funding played a pivotal role in getting our project off the ground and facilitating the early stages of our development in the DeFi space.
Q: What significant milestone did you achieve with their support?
A: A pivotal moment for us, which significantly impacted the development of our product, was receiving their initial investment commitment. This was a crucial validation for us. At that time, two of the co-founders were still employed elsewhere, and the investment essentially provided us with the financial security to consider working on our startup full-time.
The funding signaled that we had around six months to a year of runway, which was a green light for all of us to leave our jobs and dedicate ourselves entirely to Contango. The expectation from their side was for us to commit full-time if they invested, creating a sort of “chicken and egg” situation. We agreed to go full-time only if we received the investment, making it a mutually beneficial arrangement.
This milestone was not just about the financial investment but also about the trust and belief in our team and vision, allowing us to take that critical leap towards building our project with our complete focus and effort.
Comparing SOSV with Other Accelerators
Q: How would you compare your experience with SOSV to other accelerators you’ve been involved with?
A: Comparing our experience with SOSV to other accelerators, such as Entrepreneur First (EF), highlights distinct approaches within the accelerator ecosystem. EF is highly structured and designed to cater to individuals who may not have a fully formed idea or a co-founder. It facilitates a space where people can meet, brainstorm, and potentially form a founding team around a new idea within a few months. This structure can be incredibly beneficial for those at the earliest stages of entrepreneurship, providing a clear framework and extensive networking opportunities to catalyze idea formation and team building.
Our journey with SOSV, on the other hand, was different primarily due to our stage of development. We already had a solid idea and team in place when we engaged with SOSV. This context makes a direct comparison challenging because the value derived from an accelerator can depend significantly on what you’re bringing to the table and what you need at that moment. If you’re at the ideation phase without a co-founder, a program like EF might be more suitable, offering the structure and resources to help you get started. However, for teams with a clear idea and perhaps even initial development underway, accelerators like SOSV could provide a better fit, focusing on growth, networking, and funding without the need for the foundational elements EF targets. Ultimately, the choice between accelerators should be based on where you are in your entrepreneurial journey, what resources you need most, and which environment will best support your current stage of development and future goals.
Contango’s Current Status and Future Goals
Q: What is the current status of your company, and what are your goals for the future?
A: Since our initial pre-seed funding, our journey has accelerated significantly, particularly during the bull market peak in the crypto space around 2021. Capitalizing on this favorable timing, we managed to raise $4.5 million in a relatively short span between our pre-seed and seed funding rounds. This rapid progression has allowed us to expand our team to six members and officially launch our product. Our platform, Contango, is now live, and users can access our app to engage with our services.
Looking ahead, our primary objectives are to expand our user base and enhance our business metrics. An important milestone on our roadmap is the preparation for a token launch, which is a significant step towards further embedding our presence in the decentralized finance space. With the market showing positive signs again, we’re in an advantageous position to continue our growth and achieve our goals. Our focus remains on building and refining our offerings to meet the needs of our users and to contribute to the broader DeFi ecosystem.
Advice for Aspiring Founders Considering SOSV
Q: Do you have any advice for founders considering approaching SOSV or participating in an accelerator?
A: My foremost piece of advice, particularly for those in the crypto space, is to not underestimate the value of participating in a hackathon. This approach offers several unforeseen benefits. Firstly, it puts you in a position where venture capitalists may reach out to you directly, which flips the typical dynamic of founders needing to chase after VCs. Instead, you could find yourself in the enviable position of selecting from potential funding offers.
Additionally, the intensity and focus of a hackathon can rapidly accelerate the development of your project. By the end of a three-week hackathon, we had not only a working prototype but also all the necessary materials to start fundraising immediately. This is a significant advantage, as it can otherwise take much longer to reach a similar stage of readiness for investment pitches and demonstrations.
Lastly, hackathons are excellent venues for networking and team building. They provide a unique opportunity to meet potential team members or co-founders who share your vision and passion. Even beyond team formation, hackathons are a great way to immerse yourself in your specific community, meet like-minded individuals, and expand your professional network within the space. This combination of direct access to VCs, accelerated project development, and networking opportunities makes hackathons an invaluable resource for any founder looking to make their mark in the crypto world and beyond.