Acceleration of the accelerator
It may not come as a surprise that the popularity of business accelerator programs is increasing throughout the nation. What may be more surprising is where these accelerator “hot beds” are located. Most people think of Silicon Valley when entrepreneur networks, investors and startups are mentioned. However, never underestimate the innovative minds at work right here in Wisconsin.
“Wisconsin’s entrepreneurial ecosystem is on the rise,” said Lisa Johnson, Wisconsin Economic Development Corporation’s (WEDC) vice president of entrepreneurship and innovation.
The opportunity for entrepreneurs to begin and grow their businesses is becoming more of a reality now than it has been in the recent past in part due to the proliferation of accelerators here. Accelerator programs provide startups with the tools they need to be successful. And when such programs are effective, they benefit everyone, by leading to job creation, which ultimately reduces poverty and improves the wellbeing of communities. A recent study of the Goldwater Institute found that for every 1 percentage point increase in the rate of entrepreneurship in a state, there is a 2 percent drop in that state’s poverty rate.
Global Entrepreneurship Collective
One accelerator program, located in Milwaukee, offers innovative programs designed specifically for early-stage startups, giving grants and access to a network of mentors. The Global Entrepreneurship Collective (GEC) is a member of the world-renowned Global Accelerator Network (GAN), which means participants can tap into the expertise of a tight-knit group of accelerators and resources across the country. The GEC has developed programs specifically for veterans and central-city entrepreneurs.
“GEC, a Wisconsin-based nonprofit, is recognized globally by entrepreneurs, investors and the startup community,” said Nick Wichert, president of the organization. “We work with accelerators through the world, including those located in Cairo and throughout Europe—we are helping to connect Milwaukee to the rest of the world.” Our accelerator program is unique in that we provide startups with grants (rather than equity capital) and a network of mentors to help accelerate their business at the very earliest stage.”
Two of the GEC accelerators in Milwaukee include VictorySpark and Revolution Labs. Both programs emerged from the startup business organization known as Vetransfer. Together, VictorySpark and Revolution Labs have seeded 30 new startups since May 2012, creating almost 90 new jobs collectively. Just two months after the launch of VictorySpark, a veteran-focused accelerator, it became the first accelerator in Wisconsin to join GAN and received a $300,000 grant from the WEDC to provide startups with their initial seed funding. Revolution Labs launched this summer and received a $50,000 grant from WEDC for startup seed funding and $50,000 in programming capital from the Wisconsin Housing and Economic Development Authority (WHEDA). While not part of GEC,gener8tor, located in Madison and Milwaukee, is another vital accelerator member of the entrepreneurial ecosystem, working to create successful, scalable companies.
“We saw a tremendous amount of achievement with our veteran-focused programs, but realized there was an additional need for growing businesses with entrepreneurs in Milwaukee’s central city─that’s where the idea to create Revolution Labs came from,” Wichert said.
Revolution Labs has become part of the state’s “Transform Milwaukee” initiative. The new seed accelerator program is supporting five central city Milwaukee startups through the use of the Customer Development Methodology, mentorship and a $10,000 grant for each entrepreneur after they successfully complete the program. WEDC, WHEDA and various community organizations and minority chambers are supporting the pilot program.
“The entrepreneurs in our program learn how to test, validate and iterate their business models through direct customer contact while working with mentors and subject matter experts,” Wichert said. “We’re taking people with ideas and providing them with the skills of 21st century entrepreneurship. Our intention is to help them succeed, while bringing more jobs and economic prosperity to Wisconsin. In my opinion, there is unlimited opportunity in Milwaukee—we just need to come together as a community to recognize the importance of entrepreneurship and early-stage startups to our state.”
GEC co-founders Wichert and Greg Meier have concentrated on the needs and opportunities that exist in Wisconsin. According to them, their accelerator model requires state and community support, resources, mentors, and a cohesive effort to create sustained engagement with entrepreneurs from the early stage of discovery through customer acquisition and sales.
“We are only a piece of the entrepreneurship puzzle here in Wisconsin,” Wichert added. “Getting a new business up and running takes a lot of collaboration and hard work, not only from entrepreneurs but from the community as a whole. State government, local businesses, investors and business owners should be looking to provide a ‘soft landing’ for entrepreneurs to thrive and succeed for a sustained period of time. Then, and only then, will our state see the numerous benefits of the entrepreneurship ecosystem.”
GEC focuses on the discovery stage to help entrepreneurs find a repeatable business model. The accelerator is 12 weeks long and is designed to help align companies with the appropriate value propositions that customers will pay for. GEC teaches best practices in launching a business and emphasizes performance milestones throughout the program. Businesses also get face-time with potential investors to present their ideas. At the conclusion of the accelerator, GEC helps hand off the startups to the next stage of needed resources.
“Our state has a lot to offer, and the GEC is helping to shed light on the need for a cohesive understanding that supporting our entrepreneurial ecosystem means sustained engagement to ensure long-term success,” Wichert said. “Startups need customers to survive; therefore, our goal is to help our startups create and capture value. Without value, there is no viable business.”
Johnson agrees. “We need to invest in entrepreneurial pursuits knowing that some of the startups will fail but recognizing that a small startup today may be a company that’s growing by 20 or 25 employees per year down the road,” Johnson said. “Getting more startups in the pipeline will benefit our economy not only through business and job creation but also through wealth creation and entrepreneurial experience.”