Wisconsin startup accelerator Gener8tor has launched a free business training program to nurture young companies with ties to Badger State universities—and perhaps build a more direct pipeline of local companies for its main for-profit program.
The new initiative, dubbed gBETA, is essentially a “truncated version” of Gener8tor’s three-month accelerator held twice a year in Madison and Milwaukee, Gener8tor co-founder Troy Vosseller says. The inaugural session is underway in Madison and will culminate with an invitation-only pitch event on Aug. 13. (Disclosure: Gener8tor is a supporter of Xconomy in Wisconsin, but our coverage is determined independently by our editors.)
Like the main program, gBETA will accept five companies in each class and will alternate operations between Milwaukee and Madison. But gBETA will instead run six-week sessions during the spring, summer, and fall (following the academic calendar) that specifically target startups led by faculty, staff, students or recent graduates from Wisconsin universities and colleges. The program will not put any money into selected companies; nor will it take any equity stakes or options to invest later, or charge companies any fees to participate, Vosseller says. “It’s a purely free program,” he adds.
Gener8tor is funding gBETA by carving money out of its operating budget, which mainly generates revenue from sponsors and consulting services, Vosseller says.
Gener8tor is primarily a for-profit accelerator that ultimately must drive a return for investors in its angel fund. Each startup selected for its main program receives an initial $20,000 in cash in exchange for a 6 to 9 percent equity stake. After the program, each company can receive up to $120,000 in convertible debt funding.
As Gener8tor, founded in 2012, has begun to mature and build its reputation nationwide, the program has been able to attract more seasoned companies. In its last two sessions, for example, companies like Stock Manufacturing Co., Project Foundry, Modern Movement, and Bright Cellars each already had hundreds of customers before going through the accelerator.
Gener8tor isn’t alone in moving downstream to focus on later-stage companies. Vosseller says he has noticed some angel groups, venture funds, and other accelerators doing the same.
“Companies increasingly have more and more traction coming in, which is great for us,” Vosseller says, referring to participants in its for-profit accelerator. But at the same time, Gener8tor can “benefit from early-stage activity that has time to grow and progress.”
To that end, creating gBETA is a way for Gener8tor to “make sure we’re still providing resources back to the community at the earliest stages” of a company’s life cycle, Vosseller explains.
Although Gener8tor won’t make any money off gBETA, the program could be a good way to keep a finger on the pulse of new ideas and technologies born on Wisconsin campuses. And it could lay groundwork for those companies to eventually get accepted into Gener8tor’s for-profit accelerator program, Vosseller says.
There has been a flurry of new early-stage, nonprofit accelerators in Wisconsin over the past couple of years. Some of them, such as Madworks, have explicitly said they see their programs as potential stepping-stones to Gener8tor and other for-profit accelerators.
Vosseller doesn’t necessarily see gBETA as competition for the local nonprofit accelerators. Some companies might want access to the grant money doled out by Madworks, Discovery to Product (D2P), and other such programs—something that gBETA doesn’t offer. “So, for a company that’s just looking for cash of any kind, immediately, then our program isn’t a good fit for them,” Vosseller says.
And some companies will go through more than one of the Wisconsin accelerators, Vosseller points out. Wintermute is one example of that strategy. The company, formerly known as Mobius, graduated D2P earlier this year and is now a member of the first gBETA class. The other companies in the first class include Cheddah, EnsoData, Tixora, and WeightUp Solutions.
gBETA is led by Maggie Brickerman and Sara Woldt, who also handle university relations for Gener8tor. Brickerman and Woldt hold meetings twice a week with gBETA participants, offering business training services and connecting them with mentors from Gener8tor’s network. The teams also meet weekly with Vosseller and Gener8tor co-founder Joe Kirgues for business strategy discussions, Vosseller says. The program includes free public events on Thursdays discussing different startup-related topics, like fundraising and how to get into accelerator programs.
After the gBETA closing pitch event, the hope is that at least a third of the companies will go on to raise angel or venture capital, or get accepted into another accelerator program, Vosseller says.
Gener8tor got the idea for gBETA after staff members held a series of coffee meetings in the spring with entrepreneurial graduate students, as well as faculty and staff involved in different campus innovation programs, Vosseller says. The original goal was to scout for skilled people who might either form new startups or join the teams of Gener8tor portfolio companies. The accelerator’s leaders soon decided there was enough talent and startup activity to justify running a new seed-stage program, he says.
“We want to see more startups percolating up through the Wisconsin ecosystem,” Vosseller says. “And we think that we’re uniquely positioned to help support that.”
