Dallas—How can you disrupt the accelerator?
That’s the question Tech Wildcatters asked themselves following pitch day last year. “Instead of putting everybody in a one-size-fits-all program, instead of giving a trophy on day one, we decided to make it more ‘go at your own pace,’” says Gabriella Draney Zielke, the accelerator’s co-founder.
So instead of the standard 12- to 16-week program—during which startups are run through sessions on business planning, fundraising, and product development, culminating in a demo day pitch event—Tech Wildcatters has created what it calls “the Gauntlet.” The entrepreneurs get free space and mentoring but only receive investment if they hit their marks. The program will run year-round.
“When you start a class at the same time, in a couple of weeks you already know who is in the top half and who is in the bottom half,” Zielke says. “And you’ve already made the investments and committed to them even if they haven’t committed to the process.”
The startups come in at level one, where there is no funding. Reaching levels two and three means earning $5,000 and $10,000 investments. Those that reach level four receive the full $30,000 investment in return for 8 percent equity. (Reaching level five qualifies them for $100,000 in additional seed funding.)
The program, which started in March, admits a batch of startups every two months for a total of 37 so far. Zielke says they expect to bring in between 70 and 100 startups through this program in a year. No one’s reached level five, yet.
Tech Wildcatters will hold a traditional demo day—it’s today in Dallas—but, in a twist, the startups will only be given access to certain investors depending on their status.
When Tech Wildcatters began six year ago, it was one of a handful of such programs in the country. Now, Texas is home to more than a dozen accelerators, including Techstars in Austin, TMCx in Houston, and Revtech in Dallas. Scores more operate in markets large and small in the U.S. and around the world. With the growing competition, it makes sense that the programs would seek out ways to shake up their own operations.
For example, Seattle-based 9Mile Labs has also created a milestones-based funding model in which its startups can receive $35,000 in additional investments (up to $105,000), if the entrepreneurs can meet specific goals. (The startups do get $35,000 in initial funding for 7 percent of the company.)
Zielke says Tech Wildcatters investors and mentors have embraced the new format, saying they like the accountability it places on the entrepreneurs. Also, the Gauntlet program enables them to have more flexibility in their involvement (instead of missing out if they are unavailable during the time-fixed program period.) “Some of our investors who didn’t invest last year reinvested this year because of the new model,” Zielke says.
Some entrepreneurs, however, did balk at the new requirements. “There was some who said, ‘I’m an entrepreneur. I don’t want any busy work,’” Zielke says.
She says she’s had to have a few candid conversations with entrepreneurs to explain why Tech Wildcaters thinks the milestones-based approach is a better way to build a startup. “I’m a mom of a teenager,” Zielke says. “I understand tough love.”
