Posted: June 11th, 2010 | Author: Robert Shedd | Filed under: posts | Tags: funding, seed stage accelerator programs, startups | 2 Comments »
The list of startup accelerators has been getting a lot of attention as of late. It was exciting to see the list recently featured on Change.org’s Social Entrepreneurship blog. This activity follows the continuing interest and growth in seed-stage startup accelerators. Below are some updates and additions to the list.
Updates from the startup accelerator world:
- TechCrunch featured a nice write-up on Stanford’s recently launched SSE Labs program. Written by Larry Chiang, one of the advisors to the new Stanford Student Startup Lab, the post touches on some of the political hurdles that the SSE Labs program ran into at Stanford in the process of launching. It is interesting (and disappointing) to read of the difficulties students had in launching an entrepreneurship support program at Stanford, typically referred to as one of the gold standards for academic institutional support of entrepreneurship. Still, it is an academic institution and many of the struggles the students ran into sound similar to roadblocks we’ve hit at Penn State and that I’ve heard about at other institutions. I’m glad to see the students are forging ahead undaunted.
- Lots of activity internationally. The next few updates all concern accelerators abroad. One new program was mentioned in the comments on the accelerator list: The first accelerator for China just opened and will be based in Dalian: China Accelerator
- XING’s founder, Lars Hinrichs, is launching HackFwd in Europe. It has some interesting twists over the conventional model. Funding will be up to â‚¬191,000, depending on the size of the team, and companies will participate in the program for up to a year. This results in HackFwd taking a more substantial equity chunk, though:
HackFwd will take 27% of a company it invests in ““ that’s a sizeable chunk. In the US, Ycombinator takes around 6% but can do anywhere from 2%-10% while TechStars take around 6-10%, whereas the London-based Seedcamp takes 8-10%. However, those latter programmes only last months, while HackFwd”s backing will be designed to last a year.
Startups will get funding for one year, with the aim of roughly matching the founder’s current yearly salary. Founders keep 70% equity, with 3% going to advisors and 27% to HackFwd. However, that said, they then take care of ‘legal and admin stuff”¦ so you can focus on your product.’
- I came across some interesting comments from Kai Fu Lee on China’s Innovation Works accelerator program. It’s an interesting model and certainly unconventional.
“To remedy the problem [of not having any early-stage funding for young entrepreneurs in China], he founded Innovation Works, a startup incubator with a twist. Instead of just doling out a million dollars here and there to promising projects, the company recruits top engineering graduates throughout the country and enlists them to help its portfolio companies get off the ground, while simultaneously grooming them to found startups of their own in 12 to 18 months.”
“‘Y Combinator would have a very hard time making it in China,’ Lee says. ‘It would have a hard time finding the startups and qualified people to fund. It could interview hundreds and find only two.’ The American incubator model only works in China if you turn it on its head, starting first with the people before generating the concept. Right now, Innovation Works is funding two external startups and working on five projects that came from the inside team.”
- TechCrunch announced the launch of accelerator programs in Singapore and Japan: Neoteny Labs and Open Network Lab. The post points out a couple of interesting details:
“Another difference to the [Y Combinator] model: If the startup chooses a designated mentor, it will have to give away another 2% of stock options. ONL”s mentor line-up, assembled via the Neoteny Labs connection (both labs are partnering), is pretty impressive though, including big names such as Reid Hoffman, Napster founder Shawn Fanning, or Tim O”Reilly.”
- Continuing the international updates, King Abdullah II Fund for Development (KAFD) in Jordan is announcing that it will launch a seed fund in August which will operate on an accelerator model. The program is called Oasis 500. From the ArabCrunch.com article:
Oasis 500 aims to push 500 startups in Jordan in 5 years and will offer several programs starting with training courses for entrepreneurs with ideas.
[T]he training program will start around August of this year and will take a quota of around 100 entrepreneurs for several rounds every year ( any one with a tech idea according to Usama.) At the end of each program Oasis 500 will choose 10 ideas to invest in with an average of 10,000 Jordanian Dinars per idea and provide incubation (offices) for a period of 2 months. If the startup is qualified there will be additional investment of an average of 50,000 USD.
- It’s trendy to have an accelerator — PayPal launched an accelerator program, PayPal Startup Accelerator a couple of months back.
Programs being added to the list:
Check out the full, newly updated list of startup accelerators!
Along with updating the main list, I have also updated the Twitter list of startup accelerators – 51 of the programs are included. If there’s a Twitter account that I missed, please let me know!
Posted: May 15th, 2010 | Author: Robert Shedd | Filed under: posts | Tags: funding, seed stage accelerator programs, startups | 1 Comment »
The comments and suggestions that my list of seed accelerator programs has drawn have been the interesting part of maintaining the dataset. One recent comment pointed out a new resource, an overlay of the seed accelerator programs on a Google Map. It’s an interesting visualization, seeing how the programs are distributed. I’ve embedded the map below, but also suggest you take a look at the full version – the author has a detailed description and related information included for each program. For those entrepreneurs looking for a program nearby, this should be a nice resource for you.
View Seed Accelerator Map in a larger map
Posted: April 30th, 2010 | Author: Robert Shedd | Filed under: posts | Tags: funding, investment, venture capital | 1 Comment »
I’ve been thinking a lot about the venture capital industry lately. Many firms lay out an investment thesis that guides their investment activities and the type of deal flow that they’re looking for. This is then distilled into how the firm positions itself with regard to entrepreneurs. Union Square Ventures has a section of their site devoted to their focus and Foundry Group talks about their thematic approach to investing. First Round also explains their focus on their site. These are just a couple of good examples.
As I was thinking about venture capital, I started to ponder what types of opportunities I would put into my own investment thesis. I divided my thinking into two categories – “focus areas”, or large opportunities that I see near to mid-term in the marketplace, and “enhancers”, simply factors that create a competitive advantage for organizations. In my view, you can have a venture that addresses any of the focus areas, but if they don’t use the enhancers to their advantage, they are at risk of organizations that do.
I expect this to evolve, but with that to set the stage, some thoughts on what my investment thesis might look like.
Data and the Cloud
Organizations have a ton of data. Having been a data warehouse and business intelligence consultant, I saw first hand the value that organizations derived from being able to understand and measure their data. However, the current state is that it’s time consuming, expensive, and difficult to effectively slice into your data. Enter the cloud with its new models for computing. I see the confluence of growing data repositories and more effective cloud computing continuing to align and changing the way organizations drill into their data without complex IT solutions or obtuse analysis platforms. And no longer will it just be large organizations that can afford the enterprise systems and consultants that get to dig into their data – these platforms will level the playing field in business intelligence.
Rapid Development/Deployment via the Cloud
Services like EngineYard Cloud (built on top of Amazon Web Services), Heroku, and AWS itself are changing the way products get developed and deployed. When I worked on startups in the past, much of the early part of the technology phase was setting up servers (remotely hosted) and installing software for version control, bug tracking, project management, etc. Then it all needs to be managed. For Three Screen Games, everything was a web service or cloud-based tool that we chained together. We used EngineYard Cloud for production and testing. Need to test a new release? Fire up a clone of the entire production environment, test the deploy and the change, and destroy it when you’re done. The end result is an extremely dynamic development team that reduces barriers to building higher quality products in less time. I see huge potential in continuing innovation in systems to ease the development and deployment of products using the cloud.
Mobile as a Content Creation Platform
Mobile has certainly changed the way that people work, but for the most part, that innovation has been focused on the consumption of data, media, documents, etc. In general, mobile platforms lack optimization to be effective content creation platforms. I believe there is a large opportunity to provide optimized mobile content creation platforms. For businesses, the key implication is greater productivity. For ventures, one of the key implications will be that as soon as mobile has a demonstrated value beyond just content consumption, the corporate spending spigots will open wider, powering an even stronger mobile-centric ecosystem. At the same time, this will align with another growing trend – that employees will be increasingly making (and supporting) their own technology choices. Lots of opportunity for mobile content creation.
I believe a sea change is underway with regards to how organizations hire effectively. In certain spaces, the venerable resume has been fully supplanted by candidates’ online personal brands for hiring purposes. In the rest of the marketplace, this shift is coming. And for good reason – resumes don’t tell the whole story – an effective online presence opens so many doors to demonstrate not only your passion and interests, but your quality of work. In all, this transition is creating an opportunity for ventures that help both candidates and organizations take advantage of the new paradigm. Much of this still remains to be defined, but I’m passionate about startups that contribute to this shift by working to define/build out new aspects of it (i.e. privacy, etc.).
The web has always about communication and is now increasingly about engaging interactions. Most of what gets branded as “social” on the web today still has a long way to go towards being truly social, though. Along with that, there are also markets that have yet to see fully baked social sites. We’ve been working on this at our startup, FanGamb, for sports fans, as an example. There’s a lot of valid concern over Facebook’s Open Graph plans, but whether it’s that particular initiative or something more evolved, companies will start to get social right. And will be rewarded for it.
- User Experience – effective UX is a competitive advantage. FanGamb was lucky to have a fantastic UX expert work with us.
- Seductive Interactions – optimizing for customer retention and engagement, not just conversions and pageviews. read this.
- Gaming Dynamics – one of the interesting things about having worked in the gaming business is how applicable the principles and dynamics of games (that work in the game’s microcosm) are to other (non-game) business models.
- Customer Development – there’s lots of talk about how important the principles of customer development are. Stellar implementation is rare.
- Agile – like the above, many claim to be agile, though effective agile isn’t as common.