Terms & Conditions
43North LLC, a New York limited liability company (hereinafter “43North”) is undertaking a business venture competition subject to the following terms and conditions (the “Competition”). Submission of an application in the Competition constitutes a legally binding agreement between the applicant and 43North according to the terms, conditions, and covenants contained herein.
The purpose of the Competition is to be part of an overall program aimed at systematically generating more start-up enterprises in Western New York by (i) facilitating applied research and development and enhancing mentoring and other supports for aspiring entrepreneurs, (ii) supporting early-stage firm growth and (iii) attracting more venture funding. This Competition will award a total of up to $5 million in prizes, with a single top award of $1 million. It will attract entrepreneurs from around the world to compete for prizes that will turn startup companies with high growth potential into funded enterprises in our region. The campaign will have three features: the Competition (described herein), an “incubator/accelerator” facility located in Western New York, and facilitation of investment in the most promising ideas.
Nature of Businesses
The Competition focuses on applicants that intend to become operating companies. All applicants must be seeking outside equity capital in addition to the money to be awarded in the Competition. Companies that intend to license technologies from universities or research labs are encouraged.
The following businesses are not eligible for the Competition:
(1) retail businesses with brick and mortar storefronts,
(2) residential real property business,
(3) investment vehicles that invest in the securities of other entities,
(4) sports venues,
(5) gaming and gambling businesses,
(6) places of overnight accommodation,
(7) past 43North cash-prize winners ,
(8) entertainment-related establishments.,
(9) single-purpose entertainment or event productions (e.g. movies, albums, concerts)
For this purpose, “retail business” means a business that is primarily engaged in making retail sales of goods or services to customers who personally visit such facilities to obtain goods or services. In addition, generally excluded are the following: buy-outs, roll-ups, real estate syndications, tax shelters and franchise-based outlets.
Equity Investment Awards, Benefits and Conditions
Award Amounts and Additional Benefits.
43 North will make up to the following equity investment awards to the winners of the Competition:
- one award of $1 million in equity investment,
- one award of $650,000 in equity investment,
- one award of $550,000 in equity investment; and
- five awards of $500,000 in equity investment.
All award recipients will receive: (a) access to our business acceleration facility located in Western New York, (b) mentorship from experienced entrepreneurs and (c) exposure to sponsors and stakeholders.
Recipients will receive their equity investment in staged payments, payable as engagement metrics are met throughout 2018.
Equity Interest to be issued to 43North.
Recipients, as a condition of the award, must issue to 43North a purchase right or Warrant that enables 43North to purchase from the recipient a number of capital shares or membership interest equal to 5% of the fully diluted outstanding equity of the recipient at the time the Warrant is exercised. The Warrant will remain in effect for a period of ten (10) years following the date upon which the award is granted. The purchase price at the time of exercise will be the nominal amount of $100.00. For clarity, 43North would have the right to purchase a 5% interest in each recipient for $100.00 at any time during the ten (10) years following the date of an award.
43North will accept dilution of its 5% warrant coverage position only where an awardee is undertaking an equity financing based upon a valuation that exceeds the following thresholds:
|In the case of a $1 million award winner||Valuation in excess of $ 20 million|
|In the case of a $650,000 award winner||Valuation in excess of $13 million|
|In the case of a $550,000 award winner||Valuation in excess of $11 million|
|In the case of a $500,000 award winner||Valuation in excess of $10 million|
In the event that an Awardee’s equity financing meets that above criteria, 43North would reduce its percentage warrant coverage at the same rate as the percentage dilution accepted by the most senior class of shareholders, members or partners of the Awardee immediately prior to the closing of the equity financing. Each equity financing would be evaluated independently.
As a condition of the award, Recipients must materially locate and maintain a presence on an on-going basis within the “WNYEDF Region” for at least twelve (12) months, commencing with Orientation during the first week of January 2017. The “WNYEDF Region” is defined as the area within a 30-mile radius (in New York State) of the Niagara Power Project located in Lewiston, New York. For purposes of this condition, the obligation to physically locate and maintain a presence in the WNYEDF Region means that (i) at a minimum the key officers of the applicant (as determined by 43North but generally meaning the CEO, COO, CFO, and/or founders) plus a majority of other staff shall reside in WNYEDF Region, and make the WNYEDF Region their principal place of business, for at least twelve (12) months and (ii) the applicant shall identify its primary offices as being in the WNYEDF Region for such period.
Eligibility and Applications
To be eligible, applications must be submitted via 43North’s website, apply.43North.org, following all protocols described on the website. All applications must be submitted in English.
Review of Applications
Review of applications will occur in three rounds before being invited to participate in Finals during 43North Week.
Applicants must fill out, complete and submit a written application, including uploaded business documentation, via the 43North website. In the first round, 43North working in collaboration with its panels of judges (the “Committee”) will select promising applications from the pool of applicants as of May 24, 2017. Such selections shall be made in the sole and absolute discretion of 43North working with the Committee. 43North shall be entitled to begin conducting background checks during the first round on applicants who are identified as semifinalists and may request the consent of applicants for these checks.
The semifinal round will follow the first round of judging. In the semifinal round 43North, working with the Committee, will invite such applicants as it selects to engage in further conversation regarding their application, possibly including video conference pitches and interviews and provide such further information as the Committee requests. 43North shall be entitled to conduct background checks on applicants who reach this round of review and may request the consent of applicants for these checks. Competition semifinalists will be selected by 43North, in collaboration with the Committee, in its sole and absolute discretion.
All applicants selected for the semifinals will be subject to the due diligence of 43North. In order to progress through due diligence, applicants must commit: (a) to personally attend the Finals ceremonies in Buffalo, New York and (b) execute a binding agreement with 43North in which, among other things, they commit to the terms and conditions of receiving an equity investment award, regardless of the amount of the award.
Applicants will be notified by 43North if they are subject to due diligence and provided the necessary agreements to sign to progress through due diligence.
Finalists will send two members of their leadership to attend 43North Week in Buffalo, New York. Selection of the finalists will be determined and made public by mid-September.
- Finals Week will be held in the first week of October 2017.
- Up to 18 finalists will pitch before a panel of judges with an eye towards becoming one of the 8 teams to reach the Award Stage and receive an award investment.
Confidentiality and Intellectual Property
Access to the applications is granted to 43North (including its officers, managers, members, consultants and agents), the Committee (collectively, the “Reviewing Parties”). 43North offers no guarantee of confidentiality, either explicit or implicit, in connection with any data or information presented or discussed by applicants. The Reviewing Parties will not agree to or sign non-disclosure agreements in connection with any application or applicant. Applicants requiring non-disclosure agreements should not participate.
Before submitting their applications, 43North urges applicants to confirm with appropriate advisors or legal counsel that any intellectual property described therein is legally held or licensed by the applicant, is non-infringing and appropriately protected. Applicants should be prepared to provide reasonable back-up documentation for these statements, if requested by 43North.
The authors of each applicant submission will retain all copyrights to the contents of their submission, provided that the Reviewing Parties may make photocopies, photographs, and video and/or audio recordings of any data or information divulged, presented, or discussed by any applicant throughout that applicant’s participation in the Competition. By entering the Competition, applicants agree to grant a license to 43North and the Reviewing Parties to use such materials without restriction and to conduct such due diligence as the Reviewing Parties determine is necessary or desirable for purposes of evaluating the application and carrying out the Competition as described herein.
In addition, the Reviewing Parties will have the right to publicly post certain information about accepted applicants and their applications in the public areas of the Reviewing Parties’ websites, including, but not limited to, name and category of business, logo, and an abstract. The Reviewing Parties will also have the right to use the content of applicants’ applications for research and other not-for-profit purposes.
- Applications can only be submitted once. An individual who submits an application on behalf of a business entity represents and warrants he or she has requisite authority to act on behalf of such entity.
- For purposes hereof, “applicants” includes individuals and business entities. There is no limit to the number of people on an applicant’s team.
- All applications must be the original work of the applicant making the submission.
- Existing businesses may propose a new business that would have operations within the WNYEDF Region.
- Partially completed applications will not be accepted. Applications for the Competition are due by 11:59 P.M. EDT on May 24, 2017.
- Applicants risk disqualification if they or someone on their behalf communicates with principals of 43North or the Committee beyond submitting applications and providing further data or information as requested, in an attempt to influence the Competition.
- The decisions of the Committee and 43North are final, including interpretation of these Terms and Conditions.
- 43North, its members, officers and directors shall be held harmless by the applicant in the event of any legal action resulting from the participation by the applicant in the Competition.
- 43North takes no responsibility for agreements between applicants and third parties.
- Entry materials become the property of 43North.
- Applicants who engage in immoral, illegal or other activity that may adversely affect the image of 43North, its affiliates, or other applicants, are ineligible for the Competition.
- All applicants and award recipients must comply with these Terms and Conditions. Any violation of these Terms and Conditions will disqualify an applicant from the Competition, and result in forfeiture of any awards the applicant received in connection with the Competition.
- Applicants may not withdraw their applications after they are submitted.
- Requirements of award recipients includes but is not limited to:
- Provide regular monthly business reports to 43North;
- Coordinate and attend monthly meetings with 43North staff and advisors;
- Provide regular monthly reports on financial status during 2018;
- Provide quarterly reports to 43North for a five-year period following their arrival to Western New York;
- Commit each founder to make up to three appearances during 2018 to speaking to local students about the path of an entrepreneur;
- Attendance by founders at
- the finals and launch events for the 2018 competition,
- two business mentorship events every month, and
- two social mentorship events every month;
- Relocation of the CEO and key personnel to WNYEDF Region for 12 consecutive months starting with the 2018 calendar year.
- There is no limit to the number of applications for which an individual person may be a part; except that no individual person can be part of more than one applicant team that receives an award.
- Awardees will be invited to relocate to WNYEDF Region and allowed to work in the 43North incubator/accelerator as early possible, however early relocation in November of December of 2017 does not impact the relocation requirement for the entirety of 2018.
- Alternates or other high-potential startups that are not awarded prize money may be offered rent-free space in the 43North incubator/accelerator following the 2017 Competition.
- Applicants shall not publicly disparage 43North, its officers or directors, members of the Committee or public officials or agencies of the State of New York who play a role in the operation of 43North.
Applicant Representations and Covenants
By submitting an application, applicants represent and warrant that:
- The information in the application is and will be true and accurate.
- Where an applicant’s business exists in any form other than a limited liability corporation (“LLC”) or C-corporation (“C-Corp”). the applicant will take the necessary steps to convert their business to a C-Corp or LLC by January 1, 2018 should their application win an investment award.
- The ideas contained in the application will not infringe upon the rights, including privacy and intellectual property rights, of any third party.
- The applicant has a reasonable basis for holding the intellectual property that forms the basis or is integral to the applicant’s business or the proposed business submitted in the Competition.
- The applicant has and will have the right and authority to submit the content in its application to 43North.
- The applicant will obtain permission or a license, as appropriate, for any third party materials, information or other intellectual property contained in its application.
- The applicant will comply with all applicable laws and regulations in connection with its activities relating to the Competition.
- The applicant will not attempt to hold 43North responsible or liable for any third party violation of its intellectual property rights as a result of participation in the Competition.
- No member, officer, director, employee or shareholder of the applicant has a business or close family (parent, sibling, spouse, partner or significant other) relationship with any officer, member, director or senior management person of 43 North LLC, 43North BPC Inc., Empire State Development Corporation or the New York Power Authority.
- No applicant shall seek the assistance of any member, officer, director, employee or shareholder of 43North.
- The applicant consents to 43North performing a background check with respect to the applicant and its principals.
- The applicant has no reason to believe it will be prohibited or otherwise unable to comply with the requirements of an Awardee, including relocation to the WNYEDF Region and issuance of the 5% Warrant.
43North does not discriminate against any applicant on the basis of race, color, creed, ethnicity, gender, disability, age, sexual orientation, gender expression, military status or marital status.
43North reserves the right to modify these Terms and Conditions in its sole discretion. In the event of a modification, all applicants will be notified.
Domestic and Non-United States applicants are encouraged to apply. Non-United States applicants are responsible for obtaining any necessary visas and related immigration papers to attend final events of the Competition in Buffalo, New York and to satisfy the appearance requirements and the relocation requirements of an award. 43North may provide assistance with respect to United States visa requirements but cannot render legal advice to applicants and award recipients.
Waiver and Severability
43North may waive any term or condition herein at its sole discretion. Such waiver will not be deemed a waiver of any other term or condition, whether similar or different. If any term or condition herein is invalid or unenforceable, that provision will be construed, limited, modified or, if necessary, severed, to the extent necessary to eliminate its invalidity or unenforceability, and the other provisions will remain in full force and effect.
These terms and conditions shall be governed and construed in accordance with the laws of the United States of America and the State of New York, without regard to conflicts of law provisions. Exclusive venue for any litigation arising from the Competition or these Terms and Conditions shall be the State or Federal courts located in Erie County, New York.