VictorySpark, Revolution Labs in Holding Pattern, Seek Funding
As the leaders of Milwaukee’s Global Entrepreneurship Collective get ready to wrap up their summer accelerator for military veteran entrepreneurs this week, the program is entering a bit of a holding pattern.
The Global Entrepreneurship Collective (GEC), run by entrepreneurs Greg Meier and Nick Wichert, operates two accelerators for early-stage startups: VictorySpark (formerly known as Vetransfer), which has held four accelerator sessions for veteran-led startups since 2012, and Revolution Labs, which held a pilot program last year for inner city entrepreneurs. Unlike well-known accelerators like Y Combinator and Techstars, the GEC programs do not take equity stakes in program participants, instead doling out small grants of $5,000 to $20,000 per company.
Meier and Wichert saw that most accelerators were targeting startups that were already generating revenue, maybe had raised seed money, and were ready to rapidly expand their businesses.
“That left the rest of the universe that, in our view, could benefit from the [lean startup] methods and processes,” Meier says. “Who’s going to provide the model for folks in the earliest stages? We saw an emerging gap there.”
Both GEC programs are funded primarily by state grants, and both programs have used up virtually all of their allotted money, GEC says. Meier and Wichert intend to keep the two programs going, but that will require them to secure more financial support from the state and other potential backers, such as private foundations.
The fate of the two accelerators will be closely watched by the broader Wisconsin startup community, considering the attention they have attracted from politicians and the media—particularly when the original Vetransfer splashed onto the scene. What happens to the GEC is also important because of the increased number of grant-based, seed-stage accelerators that have popped up in Wisconsin in the past year. Those include Discovery to Product (D2P), a University of Wisconsin-Madison program aimed at shepherding campus ideas to the point of licensing the technology or incorporating a company; and the Madworks accelerator, a Madison initiative that launched this summer as a potential stepping stone to later-stage accelerators like Wisconsin-based Gener8tor. Just last week, Startup Milwaukee and Innovation in Milwaukee (MiKE) announced they’re working on a new nonprofit initiative, The Commons, that would include a seed accelerator for local university students.
While these programs have some clear metrics—such as the number of jobs created and the amount of funding companies raise post-program—those milestones can take longer to achieve because the participating companies are at an earlier stage than in a traditional accelerator. And some of the return on investment can’t be quantified because the programs’ goals include fostering a stronger entrepreneurial culture in Wisconsin. The GEC takes that objective a step further by trying to coax more entrepreneurship from veterans and residents of low-income neighborhoods, two groups that are often overlooked in the startup world.
Although it can be harder to clearly demonstrate progress on changing the local startup culture, state officials say they’re happy with the performance of the two GEC programs so far.
“The thing that I got from their work was they pretty much confirmed that innovation and creativity has no bounds,” says Wyman Winston, executive director of the Wisconsin Housing and Economic Development Authority (WHEDA), which provided $50,000 to cover Revolution Labs’ operating costs last year. “I’m really pleased with the results of the first class, and I’m looking forward to supporting the next class that Revolution Labs would bring on board.”
Winston wouldn’t commit to additional WHEDA funding for Revolution Labs, but he says the program is “absolutely” a candidate for a couple of his agency’s upcoming competitive funding programs targeting startups.
Meanwhile, Wisconsin Economic Development Corp. (WEDC) officials expressed interest in providing more funding to Revolution Labs. The agency previously awarded $50,000 for the pilot to invest $10,000 in each of five participating companies. Revolution Labs could win a piece of WEDC’s $1 million pot budgeted for seed accelerators statewide in fiscal year 2015, but the inner city accelerator would be required to secure matching funds from another entity, says Lisa Johnson, WEDC vice president of entrepreneurship and innovation.
“It is important that we’re investing in entrepreneurship in the inner city,” Johnson says. “We have to have these types of programs. We need the startup community being vibrant within our cities, especially Milwaukee.”