Startup School: The Xconomy Guide to Venture Incubators, 2009 Edition
Technology entrepreneurship can be a lonely road. Not only do you have to convince a few friends or colleagues to work hundred-hour weeks for the next several years in support of your wild idea, but you’ve got to make it past the elevator pitch with at least one funder, and then prove that your idea can gain a toehold in the marketplace.
But in the last few years, the process of launching a tech startup has become, if not easier, at least more social. That’s thanks to the flowering of a new class of startup schools that admit budding entrepreneurs, or teams of entrepreneurs, for a “semester” or more
of intense product development, collaboration, and business mentorship. Y Combinator, a Mountain View, CA, venture firm founded by software entrepreneur Paul Graham, is usually cited as running the first such operation, but groups imitating or adapting the model have sprung up in cities across the country—and they’re graduating a growing pool of successful startups.
SCVNGR, a Boston-based startup developing mobile software that lets organizations build customized scavenger-hunt events, got its start in a Philadelphia startup school called DreamIt Ventures, founded by Philadelphia entrepreneurs David Bookspan, Michael Levinson, and Steve Welch. Michael Hagan, SCVNGR’s chief operating officer, says DreamIt was the perfect setting for the company’s founding team—initially, just him and 20-year-old CEO Seth Priebatsch—to get the scavenger-hunt idea off the ground.
“The camaraderie of the teams was fantastic,” Hagan says. “We were all working really long hours, grabbing lunch, socializing, sympathizing with each other and sharing in the challenges and successes. With some of the tough decisions or the things I couldn’t figure out with Seth, I’d walk over to another team and say ‘What do you think of this, how would you approach this?’ David and Mike and Steve are all really mentor-oriented individuals, and that was a really strong, positive experience from the whole program.”
At most startup schools, participants are accepted for a limited time—typically 3 months to 2 years—and the team members receive mentorship and/or a small amount of seed funding. Often, the schools provide temporary work space as well as Internet access, office support, and legal and accounting advice, along with access to outside angel or venture investors. Some programs provide these benefits at no cost to the teams. Others require that teams sign over a small amount of equity in their companies (usually less than 15 percent).
The programs go by various names, such as “venture incubators,” “startup boot camps,” “seed programs,” and “growth accelerators.” The confusing terminology, plus the fact that most of the organizations were founded in 2008 or 2009, can make it hard to track down all the various programs accepting startups these days—hence this Xconomy Guide.
For this list, we have deliberately omitted the hundreds of “business incubators” around the country, such as the Cambridge Innovation Center in Cambridge, MA, that exist primarily to provide rental space and infrastructure for young companies. (For a list of business incubators by state, visit the National Business Incubators Association at www.nbia.org.) To meet the criteria for Xconomy’s venture incubator, startup programs have to provide their accepted entrepreneurs or teams with some benefit beyond office space and infrastructure support, and they must charge (if they charge at all) in the form of equity, not cash—the two exceptions on our list being Better Labs, which structures its deals in equity and cash, and TheFunded’s Founder Institute, which has a $450 course fee.
And speaking of fees, a much expanded version of this list, in PDF format, is available for a modest one. For $60, you’ll get information on each program’s focus, application deadlines and procedures, stipend and equity policies, notable graduates, and more. Click here to see what a full entry looks like, or click the “Add to Cart” button below to buy the PDF now using PayPal or your credit card. (If you choose to pay by credit card, first click the yellow PayPal checkout button, then look for “Don’t have a PayPal account?” on the next page and click the “continue” link beneath that.)
We intend to expand and update this list over time. Additions and corrections are welcome at firstname.lastname@example.org.
The Xconomy Guide to Venture Incubators: The List
Location: Providence, RI
Location: Philadelphia, PA
“Princeton Undergrad Brings Scavenger-Hunt Startup to Boston,” October 1, 2008
“Y Combinator Recombined: Talking with Philadelphia Startup Incubator DreamIt Ventures,” October 6, 2008
Location: San Diego, CA
“San Diego’s Wireless Industry Establishes Startup Incubator,” June 17, 2009
First Growth Venture Network
Location: New York, NY
“Boston Venture Firms Dominate New Mentoring Program for New York Startups,” June 16, 2009
Location: Philadelphia, PA
Location: Washington, DC
Location: Greenville, SC
Location: New York, NY
Location: Boonton, NJ
Location: Atlanta, GA
Location: Menlo Park, CA, and Lexington, MA
“Highland Capital Puts Out the Call for Student Entrepreneurs and Interns,” April 3, 2008
“Highland Program Offers No-Strings Stipends to Student Entrepreneurs,” March 3, 2009
“Paragon Lake Out to Dazzle Jewelry Buyers with Virtual Customization,” May 19, 2009
Location: Boulder, CO, and Boston, MA
“TechStars ‘Entrepreneurship Boot Camp’ Comes to Boston: An Interview with Co-founder David Cohen,” February 17, 2009
“Oneforty Gets Funded,” June 29, 2009
TheFunded Founder Institute
Location: San Francisco, CA
Location: Mountain View, CA
“Y Combinator Gears Up for Startup Summer,” March 10, 2008
“As Y Combinator Prepares to Open Summer Camp, Paul Graham Speaks,” May 3, 2008
“Paul Graham and Y Combinator to Leave Cambridge, Stay in Silicon Valley Year Round,” January 22, 2009