Accelerator 9Mile Labs Raises Fund to Back Next Class at $35k Each
9Mile Labs, the Seattle-area business-to-business startup accelerator, has raised a $900,000 fund from local angel investors to back companies in its upcoming second class and pay for professional resources in areas such as design, marketing and finance.
The nine companies chosen for 9Mile’s second cohort, which begins January 15, will each receive a $35,000 investment in exchange for 8 percent equity, a significant boost from the $20,000 for the first group. The program will also last four months instead of three, giving the companies more time to do customer validation.
9Mile venture partner Enrique Godreau III says that the limited partners—fewer than 20 individuals, some of whom are also mentors participating in the accelerator—in this new seed fund represent another layer of resources surrounding the companies picked for the program. Angel investor Rudy Gadre is one of the investors in the fund.
The increased investment amount does not represent any sort of inflation in the local startup accelerator market, he says. (Techstars, for one comparison, invests $18,000 in its companies plus a $100,000 optional convertible debt note.)
“This is less about, let’s say, keeping up with the Joneses from an investment perspective, but more about resources coming together,” Godreau says.
Like other accelerators, 9Mile, which began early this year, prides itself on the network of mentors and other resources it offers startups. Part of the new fund will support on-demand professional resources that can help startups move quickly on things like user experience, legal, and accounting.
“Urgency is one of the most important things that accelerators, especially 9Mile Labs, bring to entrepreneurs,” says partner Sanjay Puri.
Capital is obviously important to the startups, too. In the first cohort, the funding allowed companies to recruit additional employees while they were still in the accelerator, helping bring in revenue that in turn could support full-time hires, Godreau says.
Since 9Mile’s first group of companies pitched investors at a demo day in early September, one, Comr.se, has raised a significant financing round from local and Bay Area investors. Another company is nearing close of a financing round, Godreau says.
A couple of others are working on business deals with customers. “Revenue is an incredibly low-cost source of capital,” Godreau quips.