District-based Acceleprise, a business accelerator program for companies that sell technology or services to other companies or organizations, is expanding in an effort to serve more start-ups and raise its national profile.
Started last spring, the program is the brainchild of managing partner Sean Glass and partners Allen Gannett and Collin Gutman. In addition to a $30,000 investment, participating start-ups spend several months honing business models and products at the Acceleprise office.
After the success of its inaugural crop of start-ups, which graduated in November, organizers opted to expand the program and welcomed last week the first of its three classes for the year.
The accelerator now occupies 4,300 square feet at 1367 Connecticut Ave. NW, just off Dupont Circle. That’s more than double its prior footprint of 2,100 square feet.
That space will play host to three classes of eight companies each during 2013, up from the six companies that took part in its inaugural class that began in July of last year.
As part of the expansion, Acceleprise is increasing its roster of mentors. Recent additions include Bob Flores, former chief technology officer for the CIA, and Jeff Kindler, former chairman and chief executive of biopharmaceutical company Pfizer.
(Washington Post publisher Katharine Weymouth and the company’s chief digital officer, Vijay Ravindran, also act as mentors in the program.)
“We were seeing a big increase in the number of applications ... and we were seeing a lot of interesting companies,” Gannett said. “A lot of value of our program is the community and size and breadth of our community, so we’ve been growing that across all these different verticals.”
The expansion comes at a time when some say a broader shift is underway in venture capital and entrepreneurial circles that favors technology firms focusing on enterprises, a sector the industry defines as one that sells to companies and organizations rather than everyday consumers.
“For a while it was easier to build a consumer product than to scale an enterprise-facing company,” Gutman said. “You had to be a lot farther along in an enterprise start-up than you did in a consumer start-up to get proportionate attention from VCs.”
That’s less true today. Some venture capitalists who were once fixated on finding the next Facebook are shifting their investment focus to enterprise software companies where the metrics of success in a venture’s early days are more clearly defined.
For example, investors have struggled to understand the real value behind the number of times a smartphone app is downloaded, how many users flock to a given Web site and how often they engage with a social network.
With enterprise technology companies, the primary indicators of success are the number of clients willing to pay for the start-up’s technology and how much they’re willing to pay for it.
“Consumer start-ups have gone through a laundry list of different ways to prove their value that are just obfuscating the fact they don’t make any money,” Gannett said. “In enterprise products, you can’t really do that.”
Elana Fine, the managing director at the Dingman Center for Entrepreneurship at the University of Maryland, said enterprise companies also tend to retain customers for longer periods of time, creating a reliable source of revenue for the start-up.
That revenue is paramount, said John Backus, managing partner at New Atlantic Ventures. The shift that others observe, he said, is not a move away from consumer technology companies so much as it’s a move toward firms with existing sources of income.
Acceleprise opened its doors to a fresh crop of eight enterprise technology companies last week, the first of three classes that the start-up business incubator plans to welcome this year. Would you invest in these young ventures?
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