Launch House Raises Millions for Startup Launchpads

The Evolution of Launch House: From Tulum Rental to Global Residency Program

The concept of Launch House originated in May 2020 when three friends secured a rental property in Tulum, Mexico. They extended an invitation to individuals they connected with online.

This initiative, quickly named The Launch House, attracted 18 entrepreneurs. Participants were required to cover rental costs, actively launch new projects, and transparently document their company-building journey publicly.

The Rise of Remote-Work Focused Residences

Concurrent with Launch House’s emergence, similar residences began appearing globally. These spaces were inspired by the traditional “hacker house” model, but specifically designed to cater to the growing remote-work trend accelerated by the coronavirus pandemic.

These new residences offered a collaborative environment for individuals working and building businesses remotely.

Expansion and Funding

More than a year following its inception, Launch House has significantly broadened its scope, extending beyond a single, experimental project.

Founders Michael Houck, Brett Goldstein, and Jacob Peters announced a successful fundraising round of $3 million. This capital will be used to scale both the physical and digital aspects of their residency program.

Future Programs and Focus Areas

Launch House plans to introduce programs tailored to Los Angeles and New York City in the coming fall.

Additionally, they will establish residencies focused on bringing together individuals specializing in key areas such as Web 3.0, fintech, B2B enterprise, and the creator economy.

Investment Details

The seed funding round was spearheaded by Flybridge Capital Partners.

Day One Ventures and Graph Ventures also participated in the investment. Notably, over 100 angel investors contributed, including a substantial number of early Launch House members.

Prominent figures in the tech industry, including Alexia Bonatsos, Balaji Srinivasan, and Mike Duboe, were also among the investors.

From Tulum Beginnings to a Global Network

Originating in Tulum, Launch House has evolved to prioritize a cohort-based model. Entrepreneurs are now invited to participate in a four-week, immersive residency program hosted at Paris Hilton’s former Beverly Hills estate, secured through a rental agreement. To this point, more than 200 individuals, spread across eight cohorts, have utilized Launch House to advance their concepts to the seed funding phase.

This approach extends beyond the conventional “hacker house” concept. The in-person residencies function as onboarding experiences into the larger Launch House ecosystem, encompassing both digital and physical events, resources for scaling startups, and dedicated social networking platforms. Houck, previously a product manager at Airbnb, is currently developing a system enabling Launch House members to extend residency invitations to fellow community members at their own residences.

The company’s subsequent phase, designated “Season 2,” will introduce new, sector-specific houses in New York and Los Angeles. However, the team emphasizes a heightened focus on digital environments. Goldstein illustrated this shift from offline to online communities with an analogy to religious practice.

“While significant religious sites like Mecca and The Wailing Wall exist, genuine participation in a faith doesn’t necessitate visiting these locations—and, in fact, most adherents do not,” he stated. The co-founder believes a similar principle applies to Launch House, where individuals can actively engage with the community without ever physically visiting a residency location.

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“We envision ourselves less as a simple hacker house and more as a venture-scale membership community,” Goldstein explained. “These physical spaces serve primarily as an initial catalyst for fostering strong connections.” The company’s strategy centers on generating enough successful startups to establish its reputation as a prestigious program, thereby attracting a growing membership base.

Although most startups are in their initial stages, several have begun to gain traction, securing funding from Y Combinator, Sequoia, Village Global, and even prominent figures like Beyonce and Jay Z. Companies originating from the house include Showtime, Compose, and Colabra, while others, such as Wombo and TagMango, achieved key milestones and fundraising objectives during their residency.

In contrast to other early-stage accelerators like Y Combinator, Launch House refrains from taking equity stakes in the startups that emerge from its community.

“Exceptional founders have numerous options, and we believe attracting individuals to your community shouldn’t involve demanding equity upfront,” Goldstein asserted. “This is a rather outdated practice.” Launch House generates revenue through a membership-fee structure. Residents receive a one-year complimentary membership alongside residency costs, followed by an annual subscription fee.

A Model “10x Better” Than WeWork

The startup’s expansion could be limited if it relies solely on physical locations, which is influencing its increasing focus on the digital realm. WeWork provides valuable lessons, notably highlighting the inherent challenges of operating a flexible office space business.

Regarding potential investor hesitancy stemming from WeWork’s experiences, Peters highlighted Launch House’s lead investor in the current funding round: Jesse Middleton of Flybridge Ventures. Middleton previously spearheaded WeWork Labs, providing the co-founders with direct insights into building a business that is “10x better” than the nearly public company.

Another key challenge for Launch House lies in cultivating a diverse and actively engaged community, a common struggle for all online platforms.

The residency application process currently assesses candidates based on three criteria: the founder’s potential, the company’s promise, and the prospective benefit of joining the community at that specific time, considering factors like the company’s stage and the cohort’s composition. After the Launch House team’s initial review, a group of 50 community volunteers conduct interviews with potential members. Finally, the co-founders conduct a final evaluation before extending offers.

This rigorous process, if not carefully managed, could inadvertently restrict access to Launch House by favoring those who reinforce existing biases. Launch House acknowledges having previously hosted cohorts with up to 40% representation from underrepresented founders, while the current cohort stands at approximately 25% POC.

As the company expands its membership, it will face increasing pressure to address diversity and ensure representation within its community. Houck explained that the company recently established a Diversity Council, convening every few months to discuss new initiatives, including a scholarship program designed to assist candidates from underrepresented backgrounds with program costs. This program has already distributed $20,000 in two months. The company has also appointed a dedicated individual to forge partnerships with communities of underrepresented founders.

Launch House is securing funding during a period where many potential customers are re-evaluating their work-life balance. With ambitious expansion plans, the startup has the opportunity to intentionally construct a network that would not have been feasible in Silicon Valley prior to the pandemic—and will continue to have a lasting impact.