If there are big ideas and promising entrepreneurs to be found in North Carolina cities beyond Raleigh, Durham and Chapel Hill, then a new statewide effort by The Startup Factory
is out to find them.
As the early stage capital firm nears the end of its first fund, it’s trying something new for Fall 2015 and beyond, hosting a series of weeklong startup boot camps in cities around the state in hopes of building a bigger investment pipeline and determining if there are enough quality ideas, entrepreneurs and investors to host additional three-month accelerators. The vision is for TSF to help launch 150 new businesses over the next several years through its new statewide model.
The first of these boot camps will happen August 3-7 in Winston-Salem, in partnership with the co-working and innovation space Flywheel.
Says TSF co-managing director Chris Heivly, “We’re planting the seeds to operate statewide." And though he can't talk about fundraising due to Securities and Exchange Commission regulations, he adds "We fully expect to run the TSF accelerator in 2016.”
For nine-month old Flywheel, the TSF bootcamp is an extension of the co-working, code classes, idea forums and mentorship already happening in the space and an important way of vetting whether there are enough good ideas and entrepreneurs to warrant an accelerator in the city.
If so, Flywheel co-founder and serial entrepreneur Brad Bennett is confident his community will fund it.
“There are a lot of funding resources waiting to be unlocked and a lot of wealth in this community and interest in entrepreneurship,” he says. As Winston-Salem moves toward a goal of becoming a top 50 metro area by 2020, entrepreneurship is a key way city fathers hope to spur job growth. Bennett believes the next step could be raising a local pre-seed fund and hosting the city's first accelerator.
“We have a home to do this, which is Flywheel, a process to follow which TSF brings to the table, a rich network of mentors and the combination of TSF and Flywheel brings that to the table. The last piece is good ideas and that is what this bootcamp is intending to identify,” Bennett says.
Why expand? Why now?
Expansion was always a consideration of Heivly and co-founder Dave Neal when they started as Triangle Startup Factory in 2011 (the first cohort happened in early 2012). Heivly has frequently visited cities around the U.S. for speaking engagements since then, and for a period of time considered opening up shop in St. Louis—he hosted the popular Tech Jobs Under the Big Top there in February 2014. 18 communities around the globe have also requested TSF accelerators over its years in business. And about a third of 35 companies that went through the program came from outside the state.
But according to Heivly, it took 3.5 years to get the process, curriculum and track record in place to consider expanding the program or business model. TSF companies have collectively raised $17 million (including TSF’s $3.5 million investment)—more than double the national average for accelerators, according to a news release. One portfolio company has exited and 19 have secured funds outside TSF. They employ 100 workers today.
The Triangle also had some work to do. When Heivly started TSF predecessor Launchbox Digital in 2010, there were no coworking spaces or startup campuses. A lot of infrastructure had to be put into place to hit the stride TSF has today.
“Three ingredients make for great community—good entrepreneurs, good mentors and capital,” he says. “We’re going to wrestle all those things together and see whether we can help other communities do what we’re able to do in Durham.”
Winston-Salem is the community that rallied the quickest, and likely because of the momentum forming around its Wake Forest Innovation Quarter
, of which Flywheel is an anchor. The former R.J. Reynolds tobacco warehouse is being developed similar to the American Tobacco Campus that TSF calls home in Durham (Check out this April 2015 feature
in The New York Times
). There are apartments, restaurants, entertainment venues, office space, wet labs, a YMCA, bike routes and places for students at Wake Forest University, Salem College, Winston-Salem State University and the University of North Carolina School of the Arts (UNCSA) to engage.
Bennett says his Flywheel team (a partnership between his Wildfire LLC, Storr Office Environments and Workplace Strategies) spent lots of time with Heivly and Neal and did homework about the program before determining it to be the best accelerator between New Orleans and New York.
"We really needed someone with that four years of experience honing the process," he says. "We really hope this becomes a long-term partnership."
Bootcamps as mini accelerators.
Plans are taking shape for the first boot camp now, but Heivly says the curriculum will be condensed from the first two-and-a-half weeks of the accelerator program—the time that entrepreneurs stop coding and working on their products and focus on their business models. Specifically, TSF uses the Business Model Canvas tool
to make entrepreneurs prove out any assumptions about the business. Mentors come in to "beat them up and make them question things," Heivly says.
Additional programming will depend on the types of businesses and the stage, but Heivly expects some customer validation to happen during the five days. TSF is in the process of lining up mentors both in Winston-Salem and the Triangle to support the inaugural program.
The boot camp will be free, at least for now. Heivly says future cities, and business models for the boot camps, are yet to be determined but that boot camps will likely happen multiple times a year in multiple locations throughout the state.
Eventually, TSF could hold three-month accelerators in those cities or expand the boot camps outside the state.
The model TSF is proposing isn’t all that unique. Techstars has expanded similarly (only nationally) since 2009, when it opened its first accelerator outside its home base of Boulder in Boston, with a fund raised mostly locally. It’s since started shorter-term boot camps (A Patriot version
will be held in Chapel Hill in July), hosted accelerators with Fortune 500 sponsors and in June acquired UP Global’s popular startup training programs. The national chain of accelerators has always been a model for Heivly and Neal.
“They were my first call five years ago,” Heivly says of Techstars founders David Cohen and Brad Feld. “They’re my genealogical fathers in this.”
But the decision to focus within North Carolina came down to passion, opportunity and resources, Heivly says. The boot camps will happen in partnership with local organizations and mentors and will be managed by TSF's existing staff of three.
"We think there is an untapped opportunity throughout the state and if these metros could only leverage our skills, experiences, network and capital, those areas could benefit. And ultimately, it'll make for better investments for us," Heivly says.
To apply for the first boot camp in Winston-Salem, apply and submit a two-minute video before July 12 here.