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be done better this year. I also recently spoke in-depth with Harthorne, to go over the metrics and lessons learned from the first year—and to address some of the issues raised by the participants.
First, some overall metrics from the 2010 program that Harthorne shared with me. Out of 446 initial applications (from 26 countries and 24 states), MassChallenge selected 111 startup teams (79 percent from Massachusetts) and offered them office space and resources for the three-month accelerator program, which ran from July through October. There were 250-plus judges and mentors involved with the program; the core advisors and sponsors included Desh Deshpande, Josh Boger, and Ken Morse.
The program has led to at least 10 new companies being incorporated and hundreds of new jobs being created, Harthorne says. Since August, more than $20 million in external funding has been secured by MassChallenge teams. And according to surveys conducted by MassChallenge, the startup finalists across the board said the program had improved their access to resources such as mentors, fundraising information, startup organizations, and other entrepreneurs.
“Generally speaking, they did an amazing job last year,” says Vineet Sinha, founder and CEO of Architexa, a Boston-area software startup that made it to the final round of the competition but didn’t win money. “It’s an incubator program, and they provided guidance.”
One issue that came up after the competition was the distribution of “winners” across different sectors. For example, although life sciences startups made up 20 percent of the finalists, only one received money (Energesis Pharmaceuticals). Similarly, only one energy-related startup won (OsComp Systems). The winners were skewed towards the software/high-tech and general/social impact categories.
Harthorne thinks the reason might have to do with the inevitability of comparing apples to oranges—and having the same criteria for entry across sectors. Startup applicants were required to have received less than $500,000 in equity investment, and to have less than $1 million in annual revenue. Since you can get further along in software with $500K than you can in, say, biotech drug development or alternative energy, the funding criteria self-selects for very early-stage life sciences and cleantech companies that don’t have as much real-world testing as a comparable Internet startup.
So, how to address this point? Rather than imposing different criteria or having separate tracks for different sectors, MassChallenge is putting more resources into what Harthorne calls “focus areas” this year. That means developing a curriculum and providing more resources and mentorship in each of the five sector categories—high tech, life sciences, cleantech, social impact, and general. Plus creating a special “early-stage” focus area, specifically targeted at young companies so they get more mentoring. (There is no company age limit for applicants.)
That point ties into another issue raised by some observers: that the competition selected for more established companies that had already been on the fundraising circuit, rather than … Next Page »
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