Tumml Accelerator Evolving Formula For Urban Venture Financing
Call it social entrepreneurship, impact investing, or urban ventures—Clara Brenner and her friend Julie Lein were sold on the idea after they each did a summer stint with a community-based enterprise before earning their MBAs in 2012.
“We were just really impressed by the ability of these startups to have a huge positive impact on their communities,” says Brenner. One of those growing ventures was Oakland, CA-based Revolution Foods, a provider of healthy meals to schoolchildren. Brenner and Lein were so sold on local businesses with a public mission that they did a quantitative research study on such enterprises. They found a big need to fill.
“These companies are less than one-half as likely to secure seed funding as more traditional entrepreneurs,” Brenner says. To try to change that, the two friends founded the non-profit San Francisco, CA-based incubator Tumml right after they graduated from MIT’s Sloan School of Management. They describe Tumml as a venture accelerator for startup founders who want to solve urban problems that local officials often can’t address themselves.
Since the summer of 2013, Tumml has run three sessions of its four-month-long incubator program, including a winter session. Tumml provides the young companies with $20,000 in seed money in exchange for a 5 percent equity stake. It also provides desk space at its SOMA headquarters on Harrison Street; volunteer mentors from successful urban impact companies; and introductions to regional civic leaders who can help startups take root in a community.
Early graduates of the program are gaining some traction, while Tumml has been learning how to steer them toward willing investors.
Tejal Shah, a participant in Tumml’s first session, co-founded her company KidAdmit in 2012 to spare other parents the time-consuming ordeal she went through to find the right San Francisco pre-school for her son. She could find no adequate central listing place for the more than 200 preschool options in the city. Also, parents applying to multiple private schools had to fill out different application forms for each one. Shah’s company created an inclusive listings website and a standard, digitized application form that parents only need to fill out once when they apply to one or more preschools participating in the KidAdmit program.
“By the time we finished the Tumml program, we had launched the portal and had signed up 20 percent of the schools in San Francisco,” Shah says. Now, a year after her Tumml session, nearly 35 percent of the city’s private preschools use the KidAdmit application process, and the company has also enrolled schools in all nine Bay area counties, she says. Parents pay KidAdmit a $10 fee for each school they apply to, in addition to the schools’ own separate application fees.
KidAdmit raised a $500,000 seed round this year from investors including San Francisco, CA-based SV Angel and K9 Ventures, a Palo Alto, CA-based micro VC fund.
Tumml has nurtured 17 startups so far, and the third class of participants is about to finish up the summer 2014 session. Anyone can check out what these seven companies are up to—members of the public can buy tickets to Tumml’s Sept. 15 exhibition day, which will be held at the offices of the non-profit urban planning organization SPUR in downtown San Francisco.
But a sneak preview of some of the current Tumml participants illustrates the reasons why … Next Page »