What is CFEA (Convertible Future Earnings Agreement)?


CFEA is a hybrid of an FEA (future earnings agreement) and a SAFE note.

A Future Earnings Agreement is an instrument where you pay back a fixed % of your earnings for a set period of time, and repayments are deferred until you are earning above a minimum income threshold.

Who is Stepex?


We've partnered with Stepex who will be servicing our Future Earnings Agreements. They will be helping us with checking your personal financial situation to determine if you're eligible for an FEA.

What are we looking for in a founder?


First and foremost, we look at perseverance, emotional intelligence, domain expertise, and a solid understanding of startup theory. Have you started other businesses before? With your business idea, how much validation have you done, and why are you the right person to bring improvements to x industry with x app? Are you building something capital efficient, scalable and innovative? From a traction standpoint, we liked to see an idea that has been pretotyped (not prototyped).

What types of businesses will you not fund?

  • Real estate investment
  • Oil/gas exploration
  • Metal/mining operations
  • Pharma drug development (eg. vaccines)

How much funding can I apply for?


£10,000 - £30,000

What are the steps of the application?


At each step, you will be notified by email if you have passed.

  • Online application
  • Due diligence and narrow down applications
  • Founder interview
  • Investment committee voting
  • Credit and income verification via Stepex
  • FEA and SAFE agreements documentation
  • Get funded and keep building!

How is the application run?


Everything will be run through our blueocean portal, which powered by our very own unique database. Everything from automated response to status updates will be streamlined and delivered to you in a timely manner.

How do you verify my income?


We share a database with Stepex that allows us to see everyone’s salary/income history, as well as credit score. In order for you to proceed with your application, you’ll need to agree to share those things with us.

Where will the money go?


To your business bank account.

Why will I get rejected?


Generally it is because:

  • You didn’t meet a lot of the eligibility criteria
  • Your debt to income ratio (DTI) was too high
  • Competition was too stiff (we can’t fund everyone)

In every rejection email, we will specify why you got rejected (instead of sending some boilerplate rejection email) so you know where you can improve.

That being said, take our advice with a grain of salt.

How many times can I apply?


If we reject you once then make sure your situation has changed before applying again.

Also keep in mind if you’ve already received a CFEA from us, it may reduce your ability to get more funding.

How does Horizan's SAFE note work?


At a future the Qualifying Round, the SAFE note gets activated and the FEA gets cancelled.

Horizan's investment into the investee company will convert at a 20% discount to the valuation at that round.

Alternatively, if the valuation of the company is greater than £5m, Horizan's investment will convert at a valuation of no more than £5m without the 20% discount.

The shares issued to Horizan upon conversion must hold the same rights and be of the same share class as all other investors in the round.

Where there are multiple share types, Horizan's shares will convert in to the same class of shares that are to be held by the primary investor in that round (i.e. the third party investors that contributed the greatest amount of funding to the funding round)

Lastly, Horizan shall have a pro rata right, but not an obligation, to participate by further investing in the company at the Qualifying Round.

Still have questions? Send us a message through the chatbot or email us at info@horizan.vc