Venture capital

Innovation And Investment Dollars Turn To A New Region: The Midwest

Memorial Union Terrace, Madison, WI
Memorial Union Terrace, Madison, WI (Photo credit: Mike Procario)

This post originally appeared on Forbes.com.

It may seem as if entrepreneurship and venture capital are exclusively tied to the east and west coasts. In many cases this is true. A recent report derived by SSTI from PricewaterhouseCoopers Moneytree Survey Data shows that California attracted 53% of all venture capital dollars in 2012 in the United States followed by Massachusetts and New York City with a combined 19% of  VC investment dollars.

For recent graduates pursuing a career associated with the world of startup life, it may seem as if the coasts are the only places to go to start or join a new business.

There are, however, accelerator programs that are trying to change that. One program that I’m intimately familiar with, given my ties to UW-Madison, is called gener8tor and it is launching its third class of startup companies. The program is based in Madison, Wisconsin and is drawing companies from Austin, Madison, Milwaukee, Chicago, and the Twin cities.

Jon Eckhardt, co-founder of the program sees a big opportunity to create a more meaningful environment for aspiring entrepreneurs in the Midwest.

“gener8tor’s is tightly integrated into the entrepreneurship communities in the mid-west and the coasts, especially as a result of our work with nearby academic institutions” Eckhardt said. “This, combined with our innovative training platform, lets us link the capabilities of the mid-west with resources nationally.”

And it’s starting to work. According to Troy Vosseller, a co-founder of the program, its 13 companies have raised more than $5 million in capital and created 70 jobs. “The growth is only accelerating and this summer the program saw over 250 applications from around the country and from around the world,” said Vosseller. Other VC firms are starting to notice. One of which is Great Oaks Capital, a VC firm who’s founding team spent time studying at UW-Madison.

John Philosophos, Partner at Great Oaks Venture Capital put it this way. “We see big opportunities brewing in the Wisconsin ecosystem.  The entrepreneurial community is growing and producing high quality start-ups. Critical resources, including top flight developers from the UW Computer Science program and College of Engineering, mentorship from the State’s broad based economy and forward thinking corporations are all being mobilized to support innovation in the State.  Accordingly, we have made Wisconsin one of our national areas of focus.”

Local corporations are also joining the movement. American Family Insurance, based in Madison, has begun investing in and becoming customers of the region’s emerging companies. Dan Reed, Director of Business Development at American Family, says the company “sees an opportunity to engage the community in creating wealth and value in a way that also fosters a culture of innovation across the region.”

And it’s no wonder that more focus is being spent on this Midwest ecosystem.

Consider that just a few years ago, the University of Wisconsin was said to have “stood out among its state school peers” in terms of producing chief executive officers of major corporations, according to a study from U.S. News & World Report. If a program like gener8tor could help guide some of that raw Midwestern talent, maybe we’ll see an uptick of investment dollars and economic growth in the Midwest which would be a huge win for the region and national economy.

Dogpatch Labs NYC – The Spinback Home

Now that the dust has settled a bit and the acquisition is done, I wanted to talk a little bit about Dogpatch Labs NYC and the role they played in Spinback.

1. Collaboration

For the past few months the Spinback team has been working out of a union square loft in NYC hosted by Polaris Ventures. We have been working alongside 15 – 20 other impressive and humbling startups all of which are building truly unique businesses. Every day, we had the opportunity to walk around to other startups and engage in conversation on a variety of topics that affected our business. We were able to get real time feedback on specific topics from unique perspectives. For example, a custom commerce startup gave us feedback on our EasyShare design and sharing process. A real-time group messaging platform gave us insights to different marketing tactics.

2. Networking

In addition, many companies were often meeting with angel investors, advisors, clients, and other high level folks. Often times, these meetings would spill out on to the Dogpatch floor and we would also end up speaking with these guests. These folks would dive right in and start asking us questions like “what are you working on” or “who are your working with?” Questions that ultimately led to more introductions and more business relationships. Furthermore, many of the folks in Dogpatch Labs have previously worked at other startups and large corporations so it would be a fairly regular occurrence for a fellow dogpatcher to say, “hey, do you want to meet so and so at company x?”

3. Education

Lastly, Dogpatch Labs would host many lectures, seminars, keynotes and workshops for people in the startup and technology community. It was commonplace to have 40 people listening to a speaker at the front of the office while we were writing code and making client phone calls in the back of the room. This aspect of Dogpatch Labs transformed the space from an office to a next generation classroom.

At the end of the day, Dogpatch Labs is perhaps one of the most important entities in the NYC startup community. Their ability to provide opportunities around collaboration, networking and education makes them the ideal home for early stage companies.

Big thanks to Peter FlintMatt Meeker, and the rest of the Dogpatch family for letting Spinback call Dogpatch Labs our home for the past few months. Also, big thanks to the rest of the dogpatchers for keeping us humble and hungry in the pursuit of building a great business.

(partial) Spinback Team @ Dogpatch:

(left to right: Andy, Corey, Dan)

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Start a Business in School

GDR "village teacher" (a teacher tea...
Image via Wikipedia

If you are in college you should start your own business because there is no better time to do so.

When I was in college working on thecampusatlas.com I remember thinking how great it was to have the flexibility of a student and to have the resources of a college university in order to get things done. I was surrounded by exceptionally bright people from all different backgrounds and areas of expertise who were willing to provide guidance.

A friend of mine recently had success with his college endeavor and conveys a similar thought in a recent article called Deconstructing Invite Media’s success story :

“There is no better time to start a company than when you’re in school,” he said.

After all, college students don’t require a lot of money, their housing often is paid for, and their peers often are willing to hustle at all hours to meet deadlines. “You can’t beat that when you need to have your attention focused on the company,” he wrote in an e-mailed response to a question.

Furthermore, academic institutions have the resources to educate entrepreneurs on any single area of a business or topic and by leveraging the various academic resources to build your business, you actually obtain a wider knowledge base of information then originally intended.

As a student, you have the ability to build your own business in a safe, low-cost, resource-rich environment and if it doesn’t work out you still hedged your bet because you’ll most likely graduate with a degree.

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