Ponder this — several years after launch, most products tend to be very different to their original form. The user experience is far better, the bugs are sorted and most importantly it creates even more value for the customer. Why should accelerators be any different?
Since 2014 The Icehouse has run two accelerator programmes under the Lightning Lab brand. Lightning Lab was the first iteration of startup acceleration and was a valuable addition to New Zealand’s startup landscape.
However, much has changed in startup world since we first ran Lightning Lab Auckland. A whole range of support mechanisms have emerged with meetups, co-working spaces and more. The funding options have developed with more funds and new financing options like crowdfunding and University led entrepreneurial challenges, including Velocity and entre, have continued to get bigger and better. Looking inside our own tent, The Icehouse has built out its startup platform with the addition of an $11M Micro-VC fund, Tuhua Ventures, that invests in seed and angel stage companies and has continued to grow ICE Angels, which now invests approximately $12M into startups each year. All of this has contributed to building a stronger and more vibrant entrepreneurial community.
As we observed the development of the entrepreneurial ecosystem, we made the decision to part ways with Lightning Lab to run a different type of accelerator model. This has allowed us to make acceleration an option to a larger number of startups and ultimately provide more support to a smaller number of companies. Further we can align our companies with Tuhua Ventures and ICE Angels and optimise their pathway to further funding. We've learnt so much over the past couple of years about how best to support founders that are building scalable technology companies. All these learnings have fed into our new model for accelerating startups.
Today, we are pleased to announce the launch of Flux, a new pathway for accelerating the best technology companies. Our mission is to empower and support talented founders to build and scale world-leading technology companies from New Zealand.
Simply put, we want to go deeper with the best startups, provide more funding & support, and focus on the things that matter - starting with building a product that customers love.
There are three key elements we’ve changed to improve the model.
1. We will work with 6–8 companies rather than 10
We want to throw our full support behind each company. By reducing the cohort size it allows us to provide more customised support to each company. This does mean we will spend more time with companies upfront to help us make the selection.
2. We will extend the accelerator from 3 months to 6 months.
We’ve found three months doesn’t tend to provide enough time for companies to achieve any meaningful milestones. We want to give our companies the opportunity to gain as much traction as possible before raising capital. We also want acceleration to be accessible to high-caliber startup so the extended programme duration will make Flux a more viable option for hardware/IoT startups.
3. We will provide a more flexible investment model, opening up acceleration to startups that are more established
If you want the best you need to have a deal that attracts the best. We realised that a one-size fits all funding model is limiting and that acceleration wasn’t an option for many companies that could benefit hugely from the programme. In combination with providing more tailored support to each company we have built in more flexibility to our investment model. This will see us invest between $20,000-$100,000 for between 5–10% equity. This allows us to work with a wider range of startups, from those at the idea stage to more well established start-ups.
We are on the hunt for the best technology startups in New Zealand! Whether you’re a software, IoT or hardware company - we can help you scale. The application process is easy. Apply through our website (insert link) using F6s. Applications close on December 19 2016. Shortlisted teams will be interview mid-January 2017 before 6 companies are selected for the programme which will kick off on February 20 2017.
We will be launching Flux on Thursday, October 20th at GridAKL. Come along to hear how we can help you scale your company. Flux mentor Jason Kerr (Spoke) will share his story about building, scaling and exiting his last company called Findly, a 500 person SaaS venture.
Mark & the Team