A new accelerator program is forming in the District for companies that sell technology to large business and other organizations.
The founders—three partners with local investment and entrepreneurship ties—hope to draw startups from around the country that want to tap the bevy of federal agencies, associations and big corporations in the Washington region.
Accelerators have become more popular in recent years, particularly in technology hubs like Silicon Valley and New York, as short-term programs for young firms to receive seed-stage investments and mentorship as they look to mature.
Called Acceleprise, the program will provide $30,000 and four months of mentorship to firms that sell software and other technology to large organizations. It aims to attract companies that solve an unmet need or can compete in price with existing technology.
That marks a departure of sorts from several of the country’s well-known accelerators, such as Y Combinator, 500 Startups and TechStars, which typically attract Web companies that build products for the general public.
“The area that’s ripe for a lot of successful companies to come out of, and at the same time it’s been kind of overlooked, is enterprise technology,” said Sean Glass, a District-based investor and serial entrepreneur who co-founded and is managing partner for the accelerator.
“People like these stories of get-rich-quick,”Glass continued. “The reason I think you hear more about consumer Web [companies] is people have this fascination where if you experiment and get it right, you can get big very quickly.”
But it’s not just the media or tech enthusiasts who become enthralled with the likes of Facebook and Groupon, Glass said. Investors are eager to funnel their money into the next blockbuster company. As a result, enterprise technology firms sometimes struggle to raise capital, he said.
“The argument I have heard that makes sense is these companies require more time and money to start to get to scale,” Glass said. But today “it’s easier to build enterprise-class software that’s available through the Web at a much lower price than in the past.”
In addition to Glass, Collin Gutman, chief strategy officer at EmployInsight, is a founding partner. Allen Gannett, the third Acceleprise co-founder, said the firm has also recruited 40 mentors to date with plans to add another 60 before the inaugural class of start-ups arrives in July. The mentors come from a broad swath of backgrounds, including investors, executives and lawyers.
“In enterprise tech there’s a broader variety of specific skills that are involved where [as] with consumer Web you want people who are more hands on and helpful in the creative process,” Gannett said.
The Acceleprise mentors include a handful of Washington Post executives, including the newspaper’s publisher and chief executive Katharine Weymouth and chief digital officer Vijay Ravindran. Others on the list include several investors at venture capital firm Novak Biddle, where Glass is a partner, as well as the president of D.C. Central Kitchen and former CEO of online marketplace Etsy.
Acceleprise will be the District’s second accelerator. Fortify.vc opened an accelerator called “The Fort” earlier this year with a $100,000 grant from the city to help foster local startups.
Unlike The Fort, Acceleprise will recruit firms from outside the Washington region. Founders hope 60 firms will come through the accelerator in the next three years and are finalizing a $4 million investment fund to bankroll the program.
“If they come from San Francisco, Boston, New York, it doesn’t matter,” Glass said. “We’re going to look at companies from everywhere and we think they’ll benefit from spending a couple months in D.C.”