“An accelerator takes single-digit chunks of equity in externally developed ideas in return for small amounts of capital and mentorship. They’re generally truncated into a three to four month program at the end of which the startups ‘graduate’”
I've had accelerators on the mind for several reasons lately and that had me thinking about the Iowa-based startups that have participated in these programs. Our state's first accelerator program, the Iowa Startup Accelerator (Cedar Rapids), will launch it's first class this Fall and is accepting applications now.
For the purposes of this post, I'm defining "accelerator" in the way Paul Bricault, co-founder of Los Angeles-based Amplify does in this Inc.com article: externally developed, capital/equity exchanged, mentor program and time-boxed. I'm not referring to the many incubator and advisement programs across the state.
The following is a quick run down of the startups who have participated (and one who will participate this summer), the relevant details and a few thoughts from the founders on their experience:
NextStep.io (Cedar Rapids)
- Nike+ Accelerator powered by TechStars in Portland, Oregon (March-June 2013)
- Accelerator Funding: $20,000 for 6%
- Follow on Funding: This program did not provide its startups with follow on funding but NextStep.io has raised an undisclosed amount from private investors
- Note: NextStep.io entered the program as "RecBob" a company that was born at Startup Weekend Iowa City in October 2011. They pivoted to NextStep.io four weeks in the program
“One benefit of the Nike+/TechStars program was having access to accelerate every part of what you’re doing. Time is the enemy of a startup - the longer you take to figure something out the closer you get to allowing other pressures (personal, financial, timing in the market, etc) to invade. The discovery process at the accelerator really positions you for success.”
Men's Style Lab (Des Moines)
- gener8tor Accelerator in Madison, Wisc. (January-April 2014)
- Accelerator Funding: $20,000 for 6-9%
- Follow on Funding: $50,000 as part of a larger seed round.
“In addition to capital, it allowed us to really vet through customer acquisition process and prove that we have product market fit at a large scale. It allowed us to tap into resources that go beyond the three month window of the program and set the stage for raising our seed round of funding.”
Turnstile Cards (Cedar Rapids)
- NMotion Accelerator in Lincoln, Neb. (June-September 2014)
- Accelerator Funding: $15,000 for 6%
- Follow on Funding: Unknown. The program won't start until June and no follow on funding is guaranteed.
- Note: Turnstile Cards was originally named Major Trading Cards and was a product of Startup Weekend Cedar Rapids in February 2014.
“Going full steam ahead was very important to us. The accelerator is a great model for us because, beyond the initial financial support, there’s the structure, system and, quite frankly, pressure to move forward with something in the customers’ hands. It will be a great test to see if our belief, that we are creating a product that sports teams will find extremely useful, is true.”
GotIt! formerly Tutor Universe (Iowa City)
- 9+ Incubator in Menlo Park, Cali. (October 2013-June 2014)
- Accelerator Funding: $110,000 for 18%
- Follow on Funding: unknown (program is in progress)
- Note: 9+ is a bit of a different organization than the others in this list but shares enough characteristics to warrant inclusion. It is 9 months rather than 3 and the funding/equity amounts are each considerably higher.
Geoff Wood has been helping tell the story of the Iowa startup community since 2009. In addition to writing here daily, he hosts a weekly podcast, speaks at conferences and organizes several events in the community.
Photo Credit: screencap from gener8tor Premiere Night intro video