Microsoft to Provide Backing for Gener8tor’s Detroit Programs
Microsoft has expanded its partnership with Gener8tor, an organization that holds training programs for entrepreneurs in several Midwestern states, to support startups with connections to the Detroit area.
Wisconsin-based Gener8tor said that with support from Microsoft (NASDAQ: MSFT), it will enroll up to 15 companies in free, seed-stage accelerator programs each year. Startups selected to participate in the seven-week accelerator, known as gBETA, must have roots in Michigan, Gener8tor said.
“Emerging companies need more than just a great idea to take off. They need great coaching, a strong network of partners, and financial investors,” said Brad Smith, president of Microsoft, in a prepared statement. “gBETA will help Detroit entrepreneurs accelerate their growth, ultimately creating regional economic opportunity.”
Seven startups have already gone through gBETA Detroit. The inaugural class ran from Oct. 19 to Dec. 7 and took place at TechTown Detroit, which brands itself as the city’s entrepreneurship hub and hosts programs for startups focused on industries like healthcare and retail.
Stella Safari joined Gener8tor in August and serves as the director of gBETA Detroit. Previously, she held a variety of leadership positions within Detroit’s early stage business community, including with the startup collective Ponyride.
gBETA is separate from Gener8tor’s core accelerator program, which spans a 12-week period. Gener8tor and its backers provide participating companies with $20,000 in cash at the start of the program, in exchange for an equity stake of 6 to 7 percent. Participants are guaranteed a follow-on investment of at least $70,000 in the form of an uncapped convertible note.
Startups chosen for gBETA do not get money from Gener8tor, nor do they surrender any ownership of their companies. Founders get help from Gener8tor’s team and mentor network as they work to expand their user and customer bases, and ask investors to open their checkbooks.
While gBETA Detroit’s first class had seven startups, future cohorts will be capped at five companies each, Gener8tor said. gBETA Detroit will take place up to three times a year.
In November, Gener8tor announced plans to hold multiple gBETA programs each year in Northeastern Wisconsin after receiving funding commitments from a handful of large corporations, including Microsoft. Gener8tor has not disclosed specific financial terms of the two series of gBETA programs Microsoft is helping support.
gBETA, which Gener8tor launched in 2015, has also been held in three other Wisconsin cities (Milwaukee, Madison, and Beloit), as well as in the Minneapolis/St. Paul area.
Minnesota was the second state in which Gener8tor ran accelerator programs, beginning in 2016. The organization first held a gBETA program in the Twin Cities, then last year graduated five startups from Gener8tor’s core accelerator.
Maggie Brickerman, managing director of gBETA, said that when Gener8tor decides to expand into a new state, it tends to make sense to start with the shorter gBETA program, which is supported by sponsors like Microsoft. One reason Gener8tor favors this approach is that financing for the core, for-equity accelerator comes from funds that Gener8tor creates, supported by money raised from investors. That process tends to take longer than it does to secure one or two sponsorship agreements to fund gBETA programs, Brickerman said.
gBETA Detroit’s spring 2018 program will run from Feb. 22 to April 13. The deadline to apply is Friday, Feb. 2.