Meet New York's first enterprise-focused accelerator, backed by the governor
NYC SeedStart has been operating an accelerator since 2010, graduating two classes. But but over the last year the program has been dormant, until now. With the help of $550,000 grant from the office of New York Governor Andrew Cuomo and The New York City Regional Economic Development Council, the SeedStart accelerator has been revived with a focus on enterprise. Because, even a full year after Facebook's faceplant of an IPO and the ensuing negative sentiment around consumer Internet companies, it's not too late to jump on the enterprise bandwagon.
SeedStart's first class was general in nature and the second focused on media companies. The most notable successes include IT monitoring startup DataDog, which went on to raise a $6.2 million Series A from IA Ventures, Amplify Partners, Contour Ventures, and NYCSeed. Singly, a startup focused on personal data (and preventing the abuse of it) raised a $7 million Series A last year led by Foundry Group. Crowdsourced photosharing platform Olapic raised $1 million from Great Oaks Venture Capital after scoring partnerships with brands like Conde Nast, Pepsi, and several professional sports teams.
The program unveiled its new plan last night at the New York Tech Meetup, where it announced it will be accepting applications for the next week and beginning in July. Several VC firms have signed on board to participate as mentors: RRE Ventures, NYC Seed, Starvest Partners, Contour Venture Partners, and Safeguard Scientifics. Each company will be paired from reps with a corporate player in their industry, too, including SAP, Deutsche Telekom and Amazon.
If any industry needs guidance from industry old-timers, it's enterprise. The newly trendy consumeriaation of the enterprise grew out of the backlash to consumer Web startups that don't make money. But the problems enterprise companies solve are more critical, and solving them is much harder than iterating your way to success with, say, a photo sharing app. The learning curve to starting an enterprise company is much higher, making good mentorship even more important in SeedStart's program. Even if the companies involved want to disrupt Deutsche, SAP, or Amazon, they'll want to understand those business as best as they can before doing so.
Each participant gets $20,000 from SeedStart and access to the mentors and reps from the program's corporate partners in exchange for 5 percent of the business. Up to 10 companies will participate.
There is plenty of debate over the value of vertically focused accelerators. Some argue that competitiveness among portfolio companies will generate tension within the program. Others argue that the deeper the industry expertise can be offered, the better positioned the companies will be for success. Accelerators focused on industries ranging from health care to education, real estate, and finance have flourished in recent years, although "enterprise" is a much broader categorization which has lately been applied to any B2B business. Managing Director Owen Davis said the program is applying a "broad definition" of the term to its selection process. Big themes to focus on will include realtime data, social capabilities within products, and lightweight, flexible enterprise products.
"This is an extremely important area for NYC, and because of the nature of who we are, we play a role in both trying to find great companies and encourage areas of the NYC eco-system that have potential," Davis says. The program will skew to young companies, some of which may not even be companies. The goal is to attract founders and hackers, according to NYC SeedStart's website. The idea is to help the companies learn whatever industry they're trying to serve under the umbrella of NYC Seed before introducing them to people who could potentially help them. The opposite of the lean startup method, which, as I've noted before, we seem to be burning out on.
Applications are due May 13.