Gener8tor Opening Minnesota Office, First Class to Start in Fall
Gener8tor’s westward march along Interstate 94 continues.
The startup accelerator, which launched in Milwaukee in 2012 before adding programs in Madison, WI, said on Thursday that it plans to open an office in the Minneapolis/St. Paul area and enroll its first class of early-stage companies there later this year.
“We see a really robust market of startups and investors in Minnesota,” says Gener8tor co-founder Joe Kirgues. “We think it’s one of the leading markets, in the Midwest and beyond, for high-tech entrepreneurs to build a company. We’re anxious to be a part of that story.”
Mark McGuire, a Madison-based entrepreneur who holds a law degree from the University of Minnesota, has been named managing director of Gener8tor’s Minnesota programs, according to a news release.
Gener8tor runs two types of programs in Wisconsin, both of which will be introduced in the Gopher State, Kirgues says. Startups participating in Gener8tor’s core, 12-week accelerator initially receive $20,000 in exchange for Gener8tor taking an equity stake of 6 to 7 percent, and $70,000 in follow-on investment in the form of an uncapped convertible note. Kirgues says he anticipates those terms will remain when the accelerator holds its first core program in Minnesota, which is likely to be in the first half of 2017.
gBETA is Gene8tor’s other program. Like the core accelerator, it typically has five startups per class. However, it lasts six weeks and is only open to companies affiliated with colleges and universities in the state where the program is taking place. gBETA participants do not get money from Gener8tor, nor do they surrender any ownership of their companies. Kirgues says the plan is to enroll and graduate two gBETA classes in Minnesota—the first this fall, the second early next year—before the core program kicks off there.
“We’ll be coming online and opening up the application window for gBETA in the coming weeks,” Kirgues says. “What we’re trying to do is introduce ourselves to the community, via gBETA, and build relationships with startups and investors to facilitate the accelerator’s success when we do get it going over the next six to nine months.”
The 42 startups that have graduated from Gener8tor’s core accelerator have raised more than $75 million from investors and created more than 400 jobs, according to the news release. At least three of its portfolio companies—Docalytics, Driblet Labs, and Optyn—have gone on to be acquired.
Gener8tor has numerous connections to Minnesota. For starters, some of its portfolio companies are headquartered there: Docalytics, which was acquired by Contently earlier this year; Player’s Health, which last month beat out 10 other startups to capture the top prize at Google Demo Day; and Prescribe Nutrition, which like Player’s Health graduated from Gener8tor in late 2015.
Kiruges says Gener8tor has also gotten to know many Twin Cities investors over the past few years from funds like Gopher Angels and Arthur Ventures, which is based in Fargo, ND, but has a Minneapolis office. The accelerator has also forged relationships with Minnesota-based angel investors, such as John Lilly, Kirgues says. Lilly, a member of Twin Cities Angels, previously served as president and CEO at Pillsbury, and has been a repeat investor in the funds Gener8tor raises to finance its programs, Kirgues says.
Another accelerator that has expanded into additional states is Techstars, which started in Boulder, CO, and later added programs in Boston, Seattle, New York, and, just last year, Minneapolis. However, that Twin Cities accelerator, which Techstars has partnered with Target (NYSE: TGT) to run, is for retail-focused startups. McGuire says that leaves room for an industry-agnostic accelerator like Gener8tor to make inroads.
Most recently, McGuire was an entrepreneur in residence at American Family Ventures, the venture capital arm of Madison, WI-based American Family Insurance. Before that, he co-founded companies such as NameProtect.com (sold to Corporation Services Company), Jellyfish.com (sold to Microsoft), and Alice.com (went out of business).
McGuire says he sees parallels between starting a company and helping Gener8tor open its first office outside of Wisconsin.
“One of the things I love about being an entrepreneur is starting things from scratch—watching something shape and form, and take on its own life,” he says.
McGuire’s last venture, social planning app Nextt, shut down in 2014, and he took a year off before jumping back into the startup world with American Family Ventures, according to his LinkedIn profile.
He says that living in Madison from the time Gener8tor launched until now has given him an appreciation of the accelerator and the two people who lead its day-to-day operations, Kirgues and Troy Vosseller. “They’re scrappy, capital-efficient executors,” he says.
McGuire is the only Gener8tor employee hired so far who will be Minnesota-based, but he says he plans on “adding at least a couple of heads this year.” He expects to relocate to the Twin Cities in August.
Ultimately, his hope is that Gener8tor can function as a catalyst for regional unity.
“There’s an opportunity for the big Midwestern cities to band together more,” he says. “I see connections between Madison, Milwaukee, Chicago, Minneapolis, even into Ann Arbor, MI. But I think there’s a lot more we can do to self-identify as an important region for startup activity.”