If startups are like the pupil played by Ralph Macchio in the 1984 martial arts hit movie Karate Kid, then seed accelerators would be the tech equivalent of Mr Miyagi, the wise teacher providing the necessary training for success. Except that instead of martial arts training, accelerators provide access to mentors, education, workspace, connections and equity-based funding to those that successfully complete the often rigorous program.
Most accelerators today are modeled after Y Combinator, the first accelerator founded in 2005 by Paul Graham. They are cohort-based programs that are open to the public with enrollment based on criteria set by each accelerator. Programs generally last 10 to 16 weeks and each program culminates in a demo or pitch day where participants give their presentations to an audience of investors.
The success of an accelerator can be evaluated by the success of its cohorts. Some like Y Combinator and TechStars are highly competitive with enrollment rates of one to three percent. Here’s a list of notable accelerators based in the South that serve as fertile ground for some of the region’s most promising startups. For the purposes of this article, we only evaluated accelerators originating from the South that had the following components: term- and cohort-based, availability of funds upon graduation, formal educational curriculum with regular meetings weekly and demo day as part of graduation. Based on the criteria, startups hubs like Atlanta Tech Village and Capital Factory in Austin, Texas as well as TechStars Austin were not included.
Location: Dallas, Texas
Since 2011, the Dallas-based B2B accelerator has been bringing big names to the table for its annual 12-week program. The mere four percent of applicants who are accepted benefit from access to mentors like Lisbeth McNabb of Match.com and Michael Martin of Unisys. After this first quarter, Tech Wildcatters would have invested close to $40 million in 52 companies, 80 percent of which are still running today. According to Molly Cain, the program’s executive director, participants who “fail fast” generally join other companies backed by Tech Wildcatters, a testament to the strength of the alumni network.
Each participating startup receives $25,000 in exchange for eight percent equity. Since graduating four cohorts, some of the most notable companies are Koupon Media, Validic, Image Vision and Nimbix. The program’s next demo day is scheduled for late May 2015.
Surge Ventures runs an annual four-month accelerator program focused on energy technology startups. The program is competitive accepting fewer than two percent of applicants. Entrepreneurs give up eight percent equity for a $30,000 investment and are put through weekly internal peer training, visits to potential customers and office hours with mentors like John Hanten of Chevron.
The accelerator has had four cohorts and of the 34 companies, 29 are still thriving, having raised an average of $1 million each in additional funding. One graduate, Accend, raised $6.5 million in Series A funding from ConocoPhillips and Rockport Capital to further develop it’s energy data aggregation and visualization product. Surge’s fourth class will present at demo day, or “Surge Day” on May 19, 2015. The formal application process for 2016 will open August 2015, but Surge meets with companies and reviews applicants year round.
Location: Atlanta, Ga
Flashpoint’s mission is to “create better startups faster” through its startup-engineering curriculum, a “business creation and innovation process” developed by founder and director Dr. Merrick Furst. Flashpoint is located in the Georgia Institute of Technology’s Tech Square and provides all the components associated with accelerators. Flashpoint awards participants $20,000 for eight percent equity and access to angels through its network. With four cohorts under its belt, 25 out of 36 startups have recurring revenue, and 18 of those have collectively raised more than
$65 million $105 million in venture capital (Ionic Security announced that it raised $40 million in Series C on January 15, 2015). Running two batches per year, Flashpoint is currently on batch five.
Although only in operation since late 2012, The Startup Factory has successfully graduated six cohorts of companies developing sales and marketing technology platforms. The 12-week program only accepts five to seven applicants per session, granting each an initial $50,000 and an additional $20,000-$150,000 in a convertible note upon completion of the program. With mentors like Chris Heivly, co-founder of Mapquest.com, startups use the business canvas model to focus on growth and customer acquisition. Of The Startup Factory’s 31 graduates to date, 28 are still running, with $8.3 million raised. The Startup Factory runs two sessions a year. The spring session begins in March, with a demo day of May 29, 2015.
Photo Credit: Julieta Álvarez Leal via Flickr