Startup Accelerator Gener8tor Explores Possible Expansion to Indiana
Gener8tor, a Wisconsin-based group that runs training programs for early-stage companies and invests in them, is considering bringing those programs to Indianapolis.
The organization is still finalizing its decision about whether to expand into the Hoosier State. But if Gener8tor elects to do so, it will likely open an Indianapolis office by early 2018 and hold its first program there not long after, says Maggie Brickerman. She is the managing director of gBETA, one of three different accelerator programs that Gener8tor offers for entrepreneurs.
Gener8tor’s interest in potentially expanding to Indiana was first reported by the Indianapolis Business Journal.
Gener8tor has shepherded about 100 startups through its programs since launching in 2012. Its first program outside of Wisconsin took place last year, in the Minneapolis/St. Paul area.
In addition to its core 12-week accelerator program, in which participating companies are guaranteed at least $90,000 in funding in exchange for an equity stake of 6 to 7 percent, Gener8tor runs two shorter, equity-free accelerators. One is the six-week gBETA program, which launched in 2015 and is designed for seed-stage businesses. The other is gALPHA, a three-week hackathon-accelerator hybrid that will be held for the first time later this year.
Brickerman says that when Gener8tor expands to a new state, it starts off with a gBETA program. One reason for this is because gBETA is supported by sponsors, such as university tech transfer offices in Wisconsin and Minnesota. Financing for the core, for-equity accelerator comes from funds that Gener8tor creates, supported by money raised from investors. This process tends to take longer than it does to secure one or two sponsorship agreements to fund a gBETA program, Brickerman says.
One of Gener8tor’s portfolio companies, Dattus, is based in Indianapolis. The startup equips machines with sensors that can share data with Web-connected servers, and with each other. Dattus graduated from Gener8tor’s core accelerator a year ago. Brickerman says that Dattus’s connections to startup mentors and investor networks in Indiana helped Gener8tor get better acquainted with the state’s early-stage business community.
Another key connection involves Hendricks Commercial Properties, which is based in Beloit, WI, and co-sponsored the recently completed gBETA program there. Last year, Hendricks Commercial Properties’ bid to redevelop the site of a former Coca-Cola bottling plant in Indianapolis was approved by the site owner. The project is estimated to cost nearly $260 million. Brickerman says that leaders at the property development company mentioned Indianapolis as a place where Gener8tor might consider holding programs.
“You just get familiar with a city when you recruit there or invest in a company there,” Brickerman says. “And then you have somebody else that you work closely with saying, ‘Hey, we’re also seeing really cool stuff in this ecosystem. We won the bid to do this project, and we want it to have a startup hub feel to it.’”
Brickerman mentions Salesforce (NYSE: CRM) as one example of an organization with a major presence in Indianapolis that contributes to the city’s growing tech sector. The customer relationship management software giant is now one of Indiana’s largest tech employers, founder and CEO Marc Benioff wrote in an opinion piece published by the Indianapolis Star on Saturday. Salesforce’s presence in Indy stems from the company’s purchase of ExactTarget for $2.5 billion in 2013.
Gener8tor’s future expansion plans could involve running programs in Michigan and northeastern Wisconsin, she says.
Brickerman says that Gener8tor’s inception involved an “initial thesis” that all of the pieces were there to build a high-growth startup ecosystem in Wisconsin—they just hadn’t been properly put together up to that point.
“[Company] founders were kind of just on their own to navigate a pretty fragmented ecosystem and figure out, ‘Who is a good mentor?’” and find answers to similar questions, she says.
As Gener8tor holds programs in more cities, it expects the early-stage networks there to mature. And there can be significant benefits that come with scale, Brickerman says.
“If you’re just by yourself, it’s really hard to convince someone to be your first customer,” she says. “But if you can be surrounded with resources and social proof, a lot of the things that you need in the beginning can come a lot quicker. And so the vision as we are putting these nodes in other places is that we can then level-up that type of efficiency across a much broader region.”