Sunday, February 17, 2013

Accelerating from 0 to 7 in 4 years: Who will fund Demo Days?

Four Years ago, Seattle had no accelerator programs. That is, accelerators in the TechStars model of a three month sprint , with a Demo Day at the end.  It looks like there will be 5, perhaps 7 demo days from accelerators in Seattle in 2013. 

The explosion of Tech Accelerators has been tremendous, not just in Seattle, but around the world. They provide a significant opportunity for idea stage startups to gain focus and to gain traction with a market.

In Seattle we have the following accelerators: 

It looks like Microsoft, Fledge and 9Mile Labs are each anticipating cohorts twice a year. 

 If all of these programs have a good run, they will be having between 5 and 7 Demo days in 2013.  If each accelerator has 10 teams , that is between 50 and 70 teams coming out of accelerators in Seattle this year. 

At Demo Day, there is an expectation of attracting Angel Investors into funding the companies. Where will the Angel Investors come from who are going to fund these various companies? 

Angel Investors have an SEC based restriction. If you have over $1M (not counting your house) in net worth OR make more than $200K / year OR make over $300K / year, then you are a qualified investor. 

Salary studies and other data suggests that about 8% of the households in King county meet this critiera. That would make about 60,000 households that are able to participate in Angel Investing.  However, in samples of interviews, many of these people do not self identify as Angel Investors. 

If we are going to successfully fund the great companies out of these new accelerators, should we be looking at growing more Angel Investors?

This is the goal of the Seattle Angel Conference.... To provide an easy entry into process of Angel Investing. Do you know someone who would like to know more about Angel Investing? Perhaps they want to talk about the Seattle Angel Conference. 

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