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Upstart | Eric Kuhn, FoundersCard

Upstart | Eric Kuhn, FoundersCard

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Sure, the exclusive entrepreneur network offers great perks. But there's also another reason to join: the chance to share ideas and war stories with other business founders and innovators.

FoundersCard CEO Eric Kuhn slides the sleek metallic calling card across the café table slowly, saying with a completely straight face, "Be careful of the edges. I'm told they can be sharp."

I survive the exchange without injury, but his warning invites scrutiny. With its brushed silver finish, engraved lettering and 20 rows of miniature polka dots perforating the right side, the geometry mimics FoundersCard's exclusive membership card down to the minute detail. It has a substance no paper card could ever hope to achieve, a fitting tribute to the exclusive entrepreneur network Kuhn's start-up is nurturing.

"Everything that we have is reflective of the brand, there isn't too small of a detail that should be overlooked," he says, explaining his ongoing obsession with the design, inspired by the metal tag on a friend's jeans. "We want it to represent something that is precious and valuable, the coolest thing in your wallet so far."

With this declaration, Kuhn leans back smiling for another sip of cappuccino at our SoHo café meeting place, New York casual in a blue-and-white collared shirt tucked crisply into designer denim.

And, of course it is, even though I'm not holding the real deal.

The FoundersCard identification card, held by just 8,500 entrepreneurs worldwide, opens the door to a membership network so exclusive that just 60 percent of the company founders and venture capitalists who apply will gain entrance.

Its members range in age from 18 to 80, but the majority are in their late 30s or early 40s. Most hail from the United States, but the network now has members from places as far-flung as Israel, Finland and Japan.

The business model of FoundersCard focuses on two things: providing founders and start-up CEOs with access to impressive discounts and deals typically available only to executives at big companies; and organizing events where entrepreneurs can actually meet face-to-face in places such as New York, San Francisco, Chicago, Los Angeles, Las Vegas or London.

"There is nothing better than these in-person connections. There is this yearning among entrepreneurs to help others," Kuhn says. "You want to help the first-time entrepreneur. It's in the DNA."

For these privileges, members pay $495 annually (plus a one-time $75 initiation fee). That may seem steep, but the renewal rate for both members and FoundersCard's business partners is extremely high. For members, the card usually pays for itself in just one or two trips, Kuhn says.

"If someone starts a company and doesn't succeed, do we kick them out? Of course not," he adds. "There is this camaraderie of having been an entrepreneur. It makes for a unique ecosystem. Many people are pleasantly surprised not only by the existing benefits but about what gets added over time."

FoundersCard's travel benefits are the sort coveted by every road-weary business traveler. Automatic elite status with airlines like Virgin Atlantic, Lufthansa or Cathay Pacific. Steep room discounts at the swankiest hotels, such as the W Hotel in San Francisco or the Ace Hotel in New York, along with perks like free in-room Wi-Fi. Perhaps equally important, these arrangements can be cancelled just 24 hours notice without penalty – an important consideration given the chaotic existence of many entrepreneurs.

There are non-travel perks, too, like special pricing with "local lifestyles" site Gilt City, online clothing company RentTheRunway, errand service TaskRabbit, and wine purveyor WineLibrary.com.

These are precisely the serial entrepreneur Kuhn, 42, longed for during his tenure with online textbook start-up Varsity Books in the late 1990s. When the company decided to go public, the former lawyer was shocked to hear that his investment bankers were paying just $299 for rooms that typically cost $500 to $600 per night.

"I remember thinking how wrong that was," he recalls. "Instead of the entrepreneurs, the value creators, the people that were struggling and had to come up with ideas that were the product for these investors, it was the large companies that were getting all these rates and privileges. This stuck distinctly in my mind."

Varsity was a wild ride for Kuhn. It grew quickly, raising plenty of venture capital, and went public in 2000, barely managing to make it through the dot-com bust. The company survived on its own until February 2008, when it was sold to an educational publisher in Illinois, Follett Corp, for about $3.8 million. Then, in late 2009, he started FoundersCard.

Three years later, this 10-person startup still is completely bootstrapped and already running at a profit. Kuhn finds it tough to envision accepting outside investors – which makes them try all the harder to woo him.

But Kuhn would prefer to spend his time shaping FoundersCard services, rather than preparing for board meetings and justifying his strategy for investors. "While some of that is fun and stimulating, that really isn't valuable to building and growing a company," he notes.

Instead, Kuhn's days are structured around activities focused on improving the quality of FoundersCard benefits, on pushing the meter forward in increments every day. The company's entire team works out of an open-plan office in New York's SOHO district (no remote workers!), devoting all of its energy to adding and refining services. While that may sound chaotic, it allows the company to make decisions quickly.

The FoundersCard team sees itself as curators of the relationship between the network's members and the businesses that provide benefits to them. It doesn't accept commissions from partner companies, which allows the company to negotiate better discounts. It does, however, accept money for event sponsorships.

Kuhn makes it a point to meet with at least one FoundersCard member on a daily basis, which provides a steady stream of feedback to inform team decisions.

"I think it's really important that the CEO of the company is always hands-on when it comes to shaping the product. So much of my day will be involved with tweaking things or making things better," he explains.

That sort of hands-on practicality can be traced to Kuhn's schooling as a lawyer, where he learned to be far more risk-averse than the average entrepreneur. While working as a junior associate at a big law firm, Kuhn figured out quickly that he wasn't meant for the legal profession. The dot-com startup frenzy offered the best possible exit for someone with little or no business experience, he recalls.

Kuhn's experiences with Varsity Books over the subsequent decade convinced him to run FoundersCard in a very different way than his first venture. For a start, he has no particular desire to take the company public.

"The decisions that we make are very much based on what we want this company to be long term, versus what the stock price will be," he says.

You might also hear the newlywed Kuhn chasing people out of the office at a more respectable hour than some start-ups, to get some exercise or go home to their families.

"It is important to have insane passion, insane focus when you're in a startup, but I don't think it's important to have insane hours," he says. "To the contrary, I really encourage everyone to live a healthy existence."

Kuhn credits his father, an accountant who dabbled with small business ventures in his hometown of Allentown, Pa., with nurturing his entrepreneurial drive.

"Above all, what I got from him was this very practical way of going after and solving problems and moving things forward and always shooting for the next thing," he says. "To be a successful entrepreneur, you not only have to have the risk appetite, the dream part, you also need to have a very practical way of quickly problem solving. Because every day you will be confronted with a handful, if not many handfuls, of decisions that you need to make with less than perfect information and many times, a lot less than perfect information."

It isn't a stretch to see how a resource like the FoundersCard network could make those decisions easier to face -- not just for its members but also for its founder.

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Heather Clancy

Section Editor

Heather Clancy has written for United Press International, ZDNet, Entrepreneur, Fortune Small Business, the International Herald Tribune and the New York Times. She holds a degree from McGill University. She is based in New Jersey. Follow her on Twitter. Disclosure