Accelerators are all about discovering and mentoring talented entrepreneurs with good ideas for improving healthcare and other sectors. They make the right introductions to advisers, industry stakeholders and investors with the goal of improving the chances of their success. But when demo day ends, the team members are faced with the crucial question of how to sustain themselves as they advance the development of their companies. They need to figure out where their next sources of funding will come from.
Each of the teams in DreamIt Health’s accelerator program by DreamIt Ventures are being offered some help with rent, workspace and pilots with DreamIt Health partners Penn Medicine and Independence Blue Cross, according to Tom Olenzak, innovation director at IBC. Long-term, the idea is to give the companies every opportunity to use what they have learned to build a long-lasting company and grow more jobs in the city. And it helps grow the healthcare ecosystem in the region.
“These companies have been in a somewhat sheltered environment. They have been pushed really hard. The networks they have built, the advisory relationships within Penn, within IBC, that doesn’t go away, but they won’t have the supervision they have had. Some of these companies have kicked off fundraising, some will have to bootstrap longer.”
About half of the 10 teams comes from outside of the state where some have families waiting for them. Olenzak talked about how teams are incentivized to stay put at DreamIt Health’s demo day.
“I think we should have a good retention rate. We just circulated among the teams an offer to help them in a very small way either with funding a pilot they are doing with one of us or with rent if they choose to extend their stay in Philadelphia at DreamIt or the [University City] Science Center or really anywhere in the city. So we are doing our best obviously to encourage them to stay. Really, what happens is the networks they build, the customer relationships they build, the advisory networks they build during the program — that’s the thing that makes them stick here in Philly and that’s what we’re trying to create.”
It makes sense. After all, DreamIt has invested in these companies and it’s only logical that they would want to protect that investment. A lot is riding on the success of the program and DreamIt’s effectiveness in entering the health IT arena.
UPDATE: A couple of the other accelerators that have been doing this for a few years are Blueprint Health and Healthbox. When I emailed them about how they keep companies from going away, they echoed Olenzak’s points about networks and access.
Blueprint Health: “All of our companies continue to have access to the community and resources after the 12 weeks ends,” said Mathew Farkash, Blueprint Health co founder. “We view our relationship with the companies as long-term -– the first 12 weeks of that long-term relationship is when they are in the accelerator.
“Companies tend to stick around due to the strength of the Blueprint community and the fact that New York City provides backyard access to the prospective customers of our companies — whether providers/hospitals/pharma/payers/patients. NYC has a tremendous talent pool and is regarded as emerging as a health tech innovation hub.”
Across its entire portfolio, roughly about 20 percent of the companies were originally from the New York City-New Jersey region (the other 80 percent relocated). Currently, an estimated 80 percent of its portfolio companies are based in the New York City-New Jersey region. Several portfolio companies are now based at its co-working space. Some have outgrown the space but are still in the neighborhood.
Graduates get one month free rent in its co-working space after they finish the program.
Healthbox: “What largely entice our companies to stay in each region is the access they have to our network of local healthcare investors, leaders and large organizations that are all committed to helping entrepreneurs and startups grow,” said Ateet Adhikari, the head of its Boston accelerator who is also co-heading its Nashville accelerator. “The local connections the companies have made have been crucial to their current success and are ultimately helping them to continue to scale. We keep these same points in mind as we continue to expand into different regions and choose cities that give startups the greatest potential to build momentum.”
“Of the 19 investments, all maintain a strong business presence in Boston. Over half of the companies have even chosen to continue to work directly out of its co-working space after the program. In Europe, only three companies chosen for the 2012 program were originally from the UK, yet all of them decided to remain in the UK after the program.”
[Photo Credit: Protecting Investment from Big Stock Photo]
TigerLabs Health exposed us to the tremendous healthcare network in the Princeton area. The corridor from Philly to New York City, with Princeton dead in the middle, really is the Healthcare Silicon Valley. All but 1 of the teams came from outside the area and we were the only one that didn't stay. We would have, but our team had families and obligations that prevented us from making the move permanent. We do have plans to open a 2nd office there down the road though.