Cleo Capital’s Sarah Kunst launches a fellowship for laid-off workers

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Sarah Kunst graduated from college in 2008 and went straight into the luxury marketing world with a job at Chanel.

Then, the stock market collapsed and Kunst was laid off. It was that layoff, Kunst says, that brought her to the world of startups and eventually to founding her own firm, Cleo Capital, to invest in diverse founders.

“Without the recession, I would probably still be at Chanel,” Kunst said. “Cleo wouldn’t exist.”

Silver linings amid a layoff is exactly the thesis of Kunst’s newest effort: a six-week fellowship, called Chrysalis, for anyone who has faced job cuts as a result of COVID-19. Kunst wants to bring together smart people that have been laid off from top companies.

The program will include a speaker series on topics like how to pitch, structure a cap table and plan for a fundraise. Participants will be put into a Slack group to communicate between each other across disciplines, there will be video chat sessions and the program will end with a peer presentation day.

And maybe by the end, the next big recession-born company will be born as a result.

“It’s time to build [but] you’re not giving me tools to build,” Kunst said, referring to famed investor Marc Andressen’s recent blog post. So, she started brainstorming the ways she could keep the scrappy spirit of Silicon Valley alive right now.

She landed on creating a startup program similar to OnDeck, which runs a fellowship for early founders at $1,290 a head. Chrysalis is free, and is tailored to people at an even earlier point in their entrepreneurial journey: the first few weeks are just for idea generation and by the third week team formation. Additionally, Cleo is hunting for both technical and non-technical individuals and you must be unemployed to join.

The Cleo Capital fellowship will cap at 100 people and is only available in the United States for now due to bandwidth constraints, Kunst said.

There are three buckets of people the fellowship is aimed at:

  1. People who were at a startup who have been laid off
  2. People who were planning to get a job in Q2 and now will not be able to.
  3. Soon to graduate MBA students who have had their MBA or internship offers get pulled due to the pandemic.

“They’re on the market; they just aren’t physically on the market,” Kunst said. “You can’t go to a coffee shop and think with friends how to start a company.”

Through private outreach, Kunst claims that a number of people have shown interest, from the chief of staff at a gig economy startup to a VP of engineering at a tech unicorn to 27-year-old designers.

Cleo is also working with SVB, AWS and Clarky to procure free resources for participants.

Last week, NextView Ventures launched an accelerator program for startups as a way to show that they are open for business. Cleo Capital is taking a different approach by launching a free fellowship without equity or any promises for capital. It’s for good reason: Cleo Capital is significantly smaller than NextView with a $3.5 million fund, and it is newer to the investment scene.

Lowering the barrier to entry by making the program free might mean Cleo gets a more diverse bunch, which is a key focus of the firm. Of course, Kunst noted, she hopes some future deal flow comes out of it.

So Cleo’s new initiative isn’t a mimic of NextView or YC or Techstars. Instead, the firm is trying to create a welcoming environment for people before they have an idea, let alone have a need for capital.

“In my own self interest candidly, I need startups to exist,” she said.