Ignite100, one of the very few accelerators in the UK to run outside of London, has raised £700,000 to enable it to fund three new programs from June 2014 to April 2015. The majority of money has been put up by a fairly decent list of UK-based angel investors, with the rest coming from previous backer Northstar Ventures, and Hotspur Capital.
What’s more interesting is that the Newcastle accelerator is taking the opportunity to evolve the Y Combinator/Techstars model from which it originally took inspiration. Namely it’s extending the length of each program to four months, enabling cohorts to overlap their stay by a month, and — perhaps controversially — ditching Demo Day.
The amount of investment each team receives is also being tweaked, moving to a flat £18,000 per team, as opposed to the typical £5,000 per founder, in return for 6-9 percent equity.
“There are dozens of demo events in London every year; investors have a finite amount of time and everyone has their favourites,” says Ignite100’s Paul Smith explaining the decision to do away with Demo Day. “If you’re Techstars, then the world wants a ticket to your show. If you’re not, then regardless of the quality of your teams, VCs and angels can take them or leave them – in which case, who is the demo day for, exactly?”
That’s an honest admission that Ignite100 and other accelerators of a similar ilk don’t have the pulling power of the Techstars and Seedcamps of the world — and certainly not when putting all of their eggs in one basket in the form of Demo Day. Instead of setting aside a single day at the end of the program for startup teams to parade themselves in front of investors (and the press), Smith says the focus will be on a series of investor lunches, where teams will be joined by invited guests from Ignite100’s network.
“It’s important teams have a deadline to focus their efforts – that’s what separates an accelerator and ongoing incubation – but if we do our job right, then we’ll already have matched teams to interested angels and VCs before the end of the program,” he adds.
In other words, always be fundraising.
Smith also reckons Demo Day is a misguided use of a startup’s accelerator time when they should be doubling down on development. “Business happens when people talk to one another. Storytelling, presentation skills, decks – they’re all really important skills for founders to learn and they will be integral to the program – but it doesn’t make sense for a team to devote one person exclusively to scripting and rehearsing for four or five weeks”.
The other big change is lengthening the program. Each Ignite100 cohort will be accelerated for approximately four months rather than the typical 13-week program borrowed from the Y Combinator model — which, notes Smith, was originally designed to fit the schedule of a summer school but has somehow stuck.
“Feedback from teams, investors and after our experience after three years is that 13 weeks simply isn’t long enough for teams to achieve everything asked of them,” he says. “So Ignite will be a 16 – 18 week program, typically four calendar months, with a strong emphasis on sales and management, to ensure teams are truly investment ready.”
Programs won’t just run consecutively, but they’ll also overlap, amplifying the accelerator’s network effects and ensuring that “new teams arriving will learn from graduating teams and alumni from previous programs,” says Smith. It also dovetails nicely with Ignite100’s pending launch of “Campus North“, an ambitious new co-working / startup space along the lines of London’s “Campus” but without the help of Google’s deep pockets.
Finally, the list of Ignite100’s new angel investors, all of whom notably reside outside of the North East of England where the accelerator is based, include Laurence Marlor (CMO of RentalCars.com), Jonathan Forster (European MD of Spotify), Steve Pankhurst (founder of FriendsReunited), Neil Hutchinson (founder of Forward Internet Group), Doug Scott (founder of ASAP Ventures), Duncan Jennings (founder of VoucherCodes.co.uk), Gerry Boon (former Senior Partner Deloitte, and founder and head of Sports Business Group), and Simon Bichara (MD Barclays Wealth).