YCombinator Shrinks Class Size Too, Smaller Is Better

Late last week we reported that Paul Graham’s YCombinator was changing it’s seed investment structure going into the “Winter 2013” class of startups. What began as power angels Ron Conway and Yuri Milner investing $150,000 into each of the YCombinator startups has been reduced to a seed investment of $80,000 with four stake holders, further diluting the risk.

When Graham started YCombinator it was (and still is) one of the best startup accelerators in the country. Graham and the YC team made it big, big, big. Big money, big names, big startups. After two years though, it seems that Graham and his cohorts are honing in on the things that really matter. While their first class was 66 startups and their next class was 84 startups, you still needed to be the “best of the best”, for your team to get in.

Of course with 84 teams, there were even some bad apples in the “best of the best”. Graham reports in this blog post that:

“The reason we accepted fewer applications was that in summer 2012 we grew too fast. We had 66 companies in winter 2012, and that was fine, but for some reason more things than usual broke when we jumped from 66 to 84.”

While some may suggest the reduction in class size this time around is about stacking the deck, what YCombinator is really trying to do is weed out as much possible failure as they can. This way they can focus on growing the best of the best, to be, well, the best. Graham says to do that they needed to start looking at the predictors of failure rather than the predictors of success.

They’ve finished the interviews for the Winter class and right now have less than 50 startups signed up. That doesn’t mean that number will stay the same. As Graham explains there are startups that get in after the interview process and others that drop out or fall apart before they can be funded. He’s also quick to point out that this number may not stay the same. As odd it it may be to hear, YCombinator, is itself still a startup and they’re still iterating themselvers.

Linkage:

YCombinator original blog post

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Accelerate Baltimore Extends Application Deadline To December 21st

The holidays are upon us but for entrepreneurs and startup founders across the state of Maryland, across the country and around the globe who want to build their startup in Charm City, they’ll probably be on pins and needles, waiting. AccelerateBaltimore, the startup accelerator program put on by The Emerging Technology Center has extended their program application deadline to December 21st, 2012.

Baltimore is a great city to build a startup in, just ask McKeever Conwell who decided to keep his startup “Given.to” (formerly No Bad Gift), in Maryland’s tech city. Conwell, a Morgan State graduate, has been through the AccelerateBaltimore program and he’s been out west. He decided Baltimore’s best for his company.

Baltimore has a thriving tech scene (I may be biased being born and raised there). Video game studios, mobile app companies, mobile ad companies and many more call Baltimore home. In fact, mobile ad company Millennial Media, is a Baltimore startup that recently went public to the tune of hundreds of millions of dollars. The company has over 38,000 mobile apps on it’s network.

If you want a taste of that pie and you want to learn from some of the greatest mentors around, you still have a couple of weeks to apply. You don’t have to be based in Baltimore, but you do have to be willing to move to Baltimore to participate in the program. It’s worth it.

And speaking of Mentors, the ETC just announced 14 mentors for the next AccelerateBaltimore session including: Chris Brandenburg, Co-founder and CTO of Millennial Media, Greg Cangialosi, CEO of Nucleus Ventures, Ron Schmelzer, CEO of Bizelo and Co-founder of Baltimore Tech Breakfast and Andrew Coy, Co-Executive Director of Digital Harbor Foundation, Ann Quinn of Quinn Strategy Group, Victoria McAndrews of CMD, and Russell Clark Co-Founder of Illuminis.

“AccelerateBaltimore™ is one of the recognized programs that has proven to assist in nurturing startups from idea-stage to viable business,” stated Michael Binko, co-chair of Startup Maryland. “Formal programs like AccelerateBaltimore™, MindShare, Distilled Intelligence and others in the broader region are a great extension to high-touch entrepreneur events like our own Pitch Across Maryland. The mentorship, working capital and creative office-space provided by ETC form a great foundation for entrepreneurs who are eager to accept guidance from peer-mentors as well as program facilitators.”

The next AccelerateBaltimore session will begin in February. Six startups will be part of this next cohort and will receive $25,000 in seed funding. They’ll also participate in an intense development program, have free office space, a high level advisory team and more.

Linkage:

Apply to AccelerateBaltimore here

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Y Combinator: The Power In An Accelerator Is Not The Cash

Startups around the world, who’ve had their eyes set on Y Combinator, have all been scratching their heads over the past two days while stomaching a major change in the way the accelerator program at Y Combinator is run.

Two years ago Russian venture capitalist Yuri Milner and Ron Conway, principal at SV Angels, decided that they would invest $150,000 in seed money to each of Y Combinator’s startups. In a blog post Monday Y Combinator said that they often ended up managing the investments and the program, which was awkward because they hadn’t actually started it.

Y Combinator has announced a new program called YCVC where four Yuri Milner and three other firms will join together to invest $80,000 in each of the startups as opposed to the $150,000 figure. Joining Milner are Andreessen Horowitz, General Catalyst and Maverick Capital. Absent from this program is Conway and SV Angels.

Graham explained to Forbes magazine that while SV Angels fund doesn’t fit into the new mold of the program, Conway is still one of YC’s “favorite investors”

So what’s going on?

Startup spinmasters everywhere are wondering why this change in investment strategy. Some worry does this have to do with the bubble bursting? Others wonder if it has to do with the general trend in consumer tech investing going down? While others understand that cash isn’t the core to a good accelerator program.

That’s just what YC has said as well.

By decreasing the actual cash investment in the startups, YC is asking that the investors take a more active interest in the program itself. Each of the investors will participate in office hours helping to cultivate the startups in the program. Graham, along with the powers that be at YC are hoping that this invaluable investment with time will more than compensate for the decrease in seed funding.

YC also says that $150,000 may not have been the optimal investment. In some cases a seed investment that size was too much for a new startup.

“$150k was more than the successful startups needed, and it sometimes caused messy disputes in the unsuccessful ones. Switching from $150k to $80k may not completely eliminate such problems, but it will make them at most half as bad.” YC posted on their blog.

YC is confident that even in Silicon Valley $80,000 should be more than adequate to give startup founders about a year to work on their idea, and live financially above water.

Many successful accelerators across the country including MassChallenge, DreamIt Ventures, TechWildCatters and even the Brandery have been making do with substantially less seed funding for startups, and more active programs.

Some startups feel that having a name like Y Combinator, 500 Startups or TechStars behind them is enough to help them get ahead. Others really want the opportunity to work the program, beef up their contacts, and learn from the triumphs and failures of the top shelf mentors associated with funds like those backing the newest program at Y Combinator.

What do you think, tell us in comments.

Linkage:

YC’s original blog post

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Techstars Now Taking Applications Via AngelList

The popular TechStars accelerator program announced last week on their blog that they are now taking applications via AngelList.

500 Startups was the first to go the route of using AngelList to allow startups to apply their program, with their current session. Traditionally to get into 500 startups accelerator program a startup had to be recommended internally. 500 Startups founder Dave McClure opened up the current session for general applications, but only using the AngelList platform.

TechStars is taking applications through their website and also through AngelList.

Techstars founder David Cohen does say that if you apply via AngelList and you’re selected for further evaluation you may need to answer some of the more specific questions found on the application on the Techstars website. However, applications are welcomed from either site.

Techstars is currently taking applications via AngelList and their website for their Boston program that starts February 25, 2013. The early bird deadline for Boston applications is next Monday December 3rd and the final deadline is December 17th.

Applications are also open for the New York City 2013 cohort. The early bird application deadline is January 4, 2013 and the final deadline is January 18, 2013. That session begins April 2, 2013.

Linkage:

Techstars schedule

Techstars application via their website

Techstars application via Angellist

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Durham North Carolina Gets More Space For Startups

The Research Triangle in North Carolina, consisting of Raleigh, Durham and Chapel Hill has always been a hotbed for technology. Over the past few years, tech startups have started to spread like wildfire in the region. Now a new startup hub and accelerator in the American Tobacco Historic District of Durham is adding to that growth.

American Underground, will offer another 22,000 square feet of space for up to 50 new startups in the Research Triangle Region, according to wral.com. The space is formally called Underground@Main Street. 15 startups have already committed to moving into the space which will occupy 2 floors of the Self-Help Credit Union Building. They expect to open their doors in April.

The space is operated by Capitol Broadcasting which owns media holdings across the east coast including WRAL. Capitol Broadcasting has been supporting the regions startup and entrepreneurial community with investments and now this space. They also own the American Tobacco Historic District where the new space will be housed.

“The Underground is full with a growing wait list,” Adam Klein Chief Strategist for American Underground said to WRAL. “We see the strongest demand coming for smaller private offices, which is one of the reasons we are expanding to Main Street.”

“Capitol Broadcasting believes its success is tied to the success of the communities in which it operates,” he told WRAL News. “We see the growth of the startup community as essential to the development of a talented, creative workforce that will lead this region for the next 50 years. Our investment in the Underground allows CBC to nurture and support the transformative and disruptive technologies that will create a new and bold future for the Triangle.”

The Durham area alone has seen startups increase from 30 in 2010 to over 80 now. The new accelerator will allow Capitol Broadcasting and the leaders of the Durham startup community to better serve companies at their earliest stages.

Capitol Broadcasting isn’t alone in this endeavor. NC IDEA, the Self Help Credit Union. Research Triangle Foundation, and Bandwidth.com have all partnered with Capitol to open the new space. Bandwidth.com will be providing tenants of the space with internet.

Here are the startups committed to the space already:

ArchiveSocial, a social media archiving firm
Green Plus, which focuses on sustainable development
HaitiHub, an online learning site for Haitian Creole
iKlaro, a mobile marketing technology company
Impulsonic, a developer of sound simulation software
Mint Market, which focuses on local food purchasing for restaurants
Pluribus, which is developing security software for mobile payments
PlusDelta Technologies, a pharmacy technology company
Privateer Digital, a social media firm
SalesTags, a software developer for jobs and careers
Song Backer, a web-based venue for musicians
Sqord, which focuses on games and increased activity for children
StartupSpot, a company focused on helping startups find financing
SyncHear, which is developing technology to deliver audio to smartphones in environments such as bars and restaurants from TVs
Thryv, an online site to track and share fitness

Linkage:

Check out the American Underground here

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Calling All Startups Seed Hatchery Applications Now Open! Get A Free Ticket To Everywhereelse.co

Seed Hatchery, the startup accelerator in Memphis Tennessee is looking for a few, well really a bunch of great entrepreneurs and their startups. They’re looking for the type of entrepreneurs that are committed to growing their startup long term and aren’t afraid of hard work.

Seed Hatchery is now taking applications for their third class. The cohort based accelerator will begin in February and run for three consecutive months. At the end of the session you and your company will be ready to pitch real investors for opportunities to invest in your business. In the meantime you’ll be backed by the 3M’s Money, Mentors and a marine style bootcamp, in Memphis.

Although sometimes overlooked, Memphis is one of the most entrepreneurial minded cities in the world. Going back nearly 100 years, Memphis Tennessee was the epicenter for this little thing called “cotton” you may have heard of it. It was cotton and the cotton exchange that spurred one of the largest investment banks in history, Lehman Brothers.

Beyond that, other globally known phenomena like rock music (the blues), Elvis Presley, and R&B radio have their roots firmly planted in the Bluff City.

Is that not enough? Perhaps you’ve heard of this company that delivers packages via planes and trucks, overnight, yes FedEx was born and based in Memphis. Holiday Inn was born in Memphis as was Serv Pro, and Autozone.

With an entrepreneurial pedigree like that you can be assured that the mentor pool for the 2013 Seed Hatchery CoHort will be stronger than most regional accelerators Seed Hatchery’s size.

Seed Hatchery was the partner for the recent Zeroto510 medical device accelerator in Memphis where 5 of the 6 teams received follow on funding of over $100,000. One of the teams went on to immediately raise over 2 million dollars. While some startup communities are still just getting started, Seed Hatchery is backed by Launch Your City which has been working on strengthening entrepreneurs and their startups for the last six years.

If you’re a Memphis area entrepreneur or in any area and ready to relocate to Memphis it’s a great place to work and a great place to build a business. Not only that, but even though the accelerator is in the thick of the winter, it’s never ver cold in Memphis.

If you’re startup is chosen to participate you’ll receive a seed investment of $15,000, access to a very strong mentor network and a strong investment community. Seed Hatchery is looking for startups that are in the area or willing to relocate for the entire 90 day cohort and stick around Memphis to tap into the investor, entrepreneurial and startup community in the region after that. To kick off your stay in Memphis TN every team and their members selected for Seed Hatchery will receive a free ticket to the three day startup extravaganza known as “everywhereelse.co The Startup Conference” where you’ll get to see the great speakers already announced and have a small group session with recent graduates from TechStars, 500Startups, The Brandery and previous graduates of Seed Hatchery.

Applying is free and the application is open now. It’s not for the faint at heart but if you’re passionate about your idea and hard working, if you’re not afraid of rolling up your sleeves this is for you.

Hit the links below.

Linkage:

Here’s the application for the 2013 Seed Hatchery cohort

Seedhatchery.com

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Philadelphia’s Jewish Startup Accelerator Looking For 3rd Class

The Tribe 12 fellowship, a business accelerator focusing on ideas that relate to the Jewish community, is looking for it’s next class.

The fellowship is part of the Tribe 12 network which is a network of projects “that, as a whole, offer a holistic approach to engaging individuals in choosing a personally inspiring Jewish community, network, or life-style, with a particular focus on 20s and 30s. ”

The Tribe 12 Fellowship functions as a startup and business accelerator giving startups, and entrepreneurs access to mentors, seminars, grants and funding opportunities. While there is no seed fund in place for the startups selected for the class, the six month program ends with a pitch fest.

Many members of the Philly Startup Leaders, list serv were up in arms today when Danielle Selber, the Tribe 12 Fellowship coordinator, posted an application link. Many folks felt like an accelerator put on by a Jewish organization to strengthen the Jewish community was segmenting. Of course, I did not. Eventually many more seasoned members of the PSL spoke out in defense of the Tribe 12 Fellowship. The best comment being from Jerry Levine who said: Perhaps this is being a dead horse, but PSL is, by definition, a limited group – focused on Philadelphia (and Philadelphia-area). If it weren’t, perhaps it would just be called “Startup Leaders?”

Regardless of the PSL’s feelings about Tribe 12 it’s a great program and resource to entrepreneurs with a Jewish element in their startup or business. Most of the graduates from the 2010 and 2011 program have socially driven startups that are out to help the community at large.

Selber took a break between high horse ego beatings, on the PSL, to respond to a couple questions from nibletz, you know the info you’re dying to know.

Cincinnati’s Brandery & 9 More Accelerators From Everywhere Else Make Top 15 List

(graphic techcocktail.com)

The top 15 accelerators in the US has just been published by TechCocktail. They were the official media partner for the startup accelerator ranking project now in it’s second year. The ranking project was spearheaded by Aziz Gilani from DFJ Mercury and executed in partnership with Kristen Kamath a second year MBA candidate at the Kellogg School of Management at NorthWestern University.

After pitching a fit for coming in second place last year, Paul Graham’s Y-Combinator is again placed at the top of the top 15 accelerator list. An additional four accelerators from Silicon Valley rounded placed in the top 10; KickLabs (#3), i/o Ventures (#4), AngelPad (#6) and Mountain View based 500 startups at number 10.

To rank on the top 15 list of accelerators, the accelerator programs had to meet a certain criteria. The criteria factored in follow on capital, qualified financing activity and qualified exits. You’ll notice that four of the TechStars programs made it into the top 15 list, as did the most visible accelerators out there.

The best ranking for a startup accelerator “everywhere else” was Chicago’s Excelerate Labs which came in fifth. TechStars New York and Boston came in seventh and eighth place respectively. LaunchPad in Los Angeles placed ninth. Dreamit Ventures in Philadelphia came in eleventh place, TechStars Seattle, NYC SeedStart, Entrepreneurs Roundtable Accelerator New York, and The Brandery in Cincinnati rounded out the top fifteen.

There were a lot of other accelerators across the country that were used in the research. The editorial team at TechCocktail came up with a great 22 page report called “Best Accelerator For Your Tech Startup” that can be downloaded for free at TechCocktail’s site here.

The report outlines some of the other accelerators across the country and pays close attention to some of the specialty accelerators that may be more inline with your accelerator goals. Actually after reviewing the entire 22 pages, the report will be a big help to any startup that is considering an any accelerator around the country.

Linkage:

Check out the complete review and report at here at techcocktail.com

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Bizdom Cleveland Startup Accelerator Gets A New Bizdom

Bizdom is a startup accelerator program with locations in Detroit and Cleveland. Both Detroit and Cleveland have growing entrepreneurial and startup ecosystems, where Bizdom’s program and facilities naturally fit in.

Bizdom was launched in Cleveland by one of their biggest tech startups turned successful giant companies, Quicken Loans Inc,and Chairman Dan Gilbert’s Rock Ventures. Gilbert is passionate about technology, entrepreneurship and Cleveland is also the majority owner of the Cleveland Cavaliers.

The Bizdom program is actually one of the earlier startup accelerator programs. They hold three month sessions and provide startup companies, selected for their program, with $25,000 seed investments for 8% equity. Startups selected for the Bizdom program at either location are given office space, internet access, access to a wide variety of mentors, business services and other perks.

The Cleveland program has been operating out of the Quicken Loans Web Center inside the MK Ferguson Building at Quicken Loans Arena. Now they’re moving to their own 7,000 square foot space at 250 W. Huron Road in the 250 Huron Building. The Bizdom Cleveland headquarters will be inside the five story commercial building which sits directly below the Ritz Carlton Cleveland Hotel.

“Establishing our Cleveland headquarters at 250 Huron solidifies Bizdom as an anchor in the city’s growing tech hub,” said Ross Sanders, chief executive officer of Bizdom. “Much like our Detroit headquarters, we have designed a collaborative and dynamic space that fosters an atmosphere for our entrepreneurs to truly excel,” he said.

The Detroit Bizdom location moved to a new headquarters in the Madison building in Detroit back in March. Space is one of the values that is very important to Gilbert which explains why both locations have relocated prior to their next session.

“The opportunity came open at the Madison and part of Dan Gilbert’s vision is that place matters,” says Maria LaLonde, Bizdom’s recruiting and development leader told XConomy about the Detroit move. “We’re trying to create a great tech community where our entrepreneurs are closer to mentors, closer to funding sources, and can collaborate in an open workspace.”

Both locations offer four seasonal sessions a year and have graduated over 50 startups.

Linkage

Check out Bizdom here

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