Expanding Iowa Startup Accelerator

Iowa Startup Accelerator: Investing in Iowa’s entrepreneurs

We’ve invested six years and millions of dollars into Iowa’s startup ecosystem. Now we’re aiming much bigger.

Our mission at NewBoCo is to accelerate world-changing ideas, from Iowa. To do this, we’re tackling the things holding our startup ecosystem back:

• Ensuring entrepreneurial support programs work together at every stage of growth
• Addressing investment capital needs that change as companies grow
• Helping these companies find the talent they need to grow

To do this, over the past few months, we’ve announced several things:

• We hired Alex Taylor as the managing director of the Iowa Startup Accelerator (ISA), which mentors and coaches emergent Iowa startup companies.
• We announced the formation of ISA Ventures, a $15 million (so far) venture fund that will invest in Iowa businesses, from the earliest founders through expansion stage companies.
• We announced multiple expansions of our DeltaV adult educational programs, now training adults on software development, digital marketing, and customer support, among other things.

Today, we’re excited to bring forward the logical next step: expanding the accelerator’s programming to correspond to the new venture fund’s ability to invest at different lifecycle stages.

The new Iowa Startup Accelerator works with companies in five stages:

Five stages of capital and programming for Iowa entrepreneurs: Pre-accelerator, Foundation, Growth, Scaleup, Expansion stages

Pre-accelerator

A new, free virtual pre-accelerator program works with founders exploring entrepreneurship part-time with a potential business idea, but who are not yet ready to commit to the journey. This program is primarily online. Participants receive coaching through a five-session program, but receive no capital investment.

We are piloting this program with 5 founders from across Iowa this Fall.

ISA Stage 1: Foundation

A 90–day Foundation program, similar to the Iowa Startup Accelerator program we’ve run since 2014. It focuses on a founding team working full-time to identify and validate their potential business model, prototyping potential solutions to the marketplace problem they’ve identified, and generating early pre-sales. Participants receive a $25k pre-seed investment in their business.

Our next Stage 1 program will run in Spring 2021, we expect to invest in 20-25 companies per year at this stage.

ISA Stage 2: Growth

For the past six years, we’ve invested in dozens of Iowa companies through our accelerator program, but had little to offer them after they completed it. With a new investment fund, we are now equipped to offer capital as well as entrepreneurial support for founders who meet certain criteria. These companies have early product versions in-market that they’re actively selling and are working toward product-market fit. At this stage, founders will receive 12 months of coaching and workshops aimed heavily at sales & marketing growth strategies. Founders or their employees are eligible to attend DeltaV to acquire skills in software development, digital marketing, and more. Additionally, apprentices from our DeltaV programs can provide inexpensive expertise.

Participants in the Growth-stage accelerator will qualify for up to $100k in investment capital from ISA Ventures as part of a seed round — and can be leveraged into much more via syndicated investments. We anticipate investing in 5–8 companies at this stage before the end of 2020, and up to 20 each year through 2024.

ISA Stage 3: Scaleup

For companies that have found significant marketplace traction, ISA shifts to an indefinite duration, flexible program aimed at supporting entrepreneurs through tumultuous growth. These companies have access to workshops for rapidly scaling companies, regular formal coaching, CEO peer groups, and in some cases, involvement from our team on their boards. Additionally, Scaleup companies can attend or recruit directly from our DeltaV programs to find the talent they need.

Companies in the Scaleup-stage accelerator are typically eligible for $100k to $250k in investment capital from ISA Ventures, usually as part of a Series A round. This can be leveraged into much larger amounts via syndicated investments. We anticipate investing in 5–8 companies per year at this stage.

ISA Stage 4: Expansion

Expansion stage companies are informally guided by our accelerator staff, but our team will almost always have governance roles in helping guide the business toward growth and eventual exit. We expect to be coaching the companies’ executive teams at this stage on workforce, culture, and operational challenges.

Companies in the Expansion-stage accelerator can receive investment capital of up to $1 million from ISA Ventures. This can be leveraged into much larger amounts via syndicated investments. We expect to invest in 2–3 companies per year at this stage.

What does this mean for Iowa’s Startup Ecosystem?

This broad framework is intended to ensure that Iowa startups have access to all of the resources they need to grow, at every stage: guidance via support programs, investment capital, and workforce talent. Between NewBoCo and ISA Ventures combined, in 2021 we’ll have 30 people on staff working on this singular mission.

We certainly can’t do it alone. We can’t possibly cover all areas of expertise that our founders will need. Our collaborators across the state — the colleges and universities, private consultants and other accelerators and entrepreneurial support organizations — all will be instrumental in growing these companies, too, providing depth and breadth. But this expansion of ISA gives us a consistent and methodical base to start from that really doesn’t exist today.

We’re excited about this new way to support the growth of Iowa companies.

Eric