Summer tech accelerator goes year round, gets a new name
What’s in a name? CoLab’s Gig Tank has been rechristened Gig Tank 365 and is migrating from a summer-only accelerator to a year-round program with two additional cohorts of technology startups in the spring and fall.
The “why” is pretty straightforward. According to CoLab’s executive director and entrepreneur-in-residence, Mike Bradshaw. “Innovation doesn’t just happen in the summer. The people that fuel the innovation economy in Chattanooga aren’t just here during the summer.”
After four summer cohorts, it didn’t make sense to put so much effort into building the network of mentors and support staff for only a few months’ use, tear it down, catch your breath and then start building it again almost immediately. Initially, housing was an issue. UT Chattanooga provides summer housing for about 40 out-of-town participants that would not be available during the school year.
Two things finally made the change make sense, says Bradshaw. “Chattanooga is growing enough of its own technology-oriented startups to make it so that the program could be sustainable with local people who don’t have to worry about housing. The reputation of the program has also grown so that people who want to be in it will come anyway, even without housing.”
A pilot spring cohort has just ended, and this year’s summer program begins May 16 with 12 startups focusing on 3-D printing, software defined networking, and healthcare. For a complete list of participants with brief descriptions, visit thegigtank.com/teams.
Another evolutionary giant step, which began last year, is that Gig Tank no longer requires companies to accept a $15,000 investment in return for 5-6 percent of the company. According to Bradshaw, that made sense when the startup teams were very early in their development so the valuation of their companies was comparatively low.
Why does this matter? Because Gig Tank is looking for startups that can become successful companies.
Early engagement with a young, lower-valued company means a lower probability of ultimate success. An investment on those terms implies a total valuation of about $300,000. Most of the companies in this summer are already capitalized at about $2 million each, so they are closer to being sustainable companies.
“We have attracted these teams without any equity financing at all, which we did in the first two years and in the third year for all but two or three of the teams,” he said. “Chattanooga itself is now supplying enough value for these people to come here without the equity investment. I think that’s pivotal.”
Ultimately, CoLab isn’t just making a financial investment, looking for value in dollars and cents. “The equity is invested in the community. Having these companies here doing things is the payback.”
The value the startups receive is primarily in the connections facilitated by Gig Tank.
“I’m not going to tell you secrets you can’t find somewhere else,” says Bradshaw. “What I can do that you can’t get anywhere else is introduce you to people that can significantly enhance your prospects.”
The bottom line for startups is that they will achieve results from being in the program greater than they would have achieved on their own.
“As the mentor network grows, that benefit becomes that much greater. That’s what’s caused people to call us up and say ‘how to do I get into the program?’ We get mostly inbound now.”
“Without the mentor network, without the industry partners none of this would work well,” he adds. “Because of that it works really, really well.”
Rich Bailey is a professional writer, editor and (sometimes) PR consultant. He led a project to create Chattanooga’s first civic website in 1995 before even owning a modem. Now he covers Chattanooga technology for The Pulse and blogs about it at CircleChattanooga.com
Photo illustration by Violet Kaipa