By Tom Ballard, Chief Alliance Officer, PYA
If you’re going to play in the major leagues and compete with other cities for top entrepreneurs, you need to have a full set of tools to have a reasonable chance of success, Knoxville’s Eric Dobson believes.
Those tools include a vibrant downtown with restaurants, music venues, bars, and the arts that are attractive to creatives (check); a region that has outdoor attractions like lakes, mountains, biking and jogging trails (check); educational and technology assets (check); early through growth stage funding for new ventures (a work in progress); and uniquely-focused start-up accelerator programs like the Knoxville Entrepreneur Center’s (KEC) “MediaWorks” and “CodeWorks” (check).
So, what’s missing locally, other than more angel and venture capital, you might ask? The answer is a fund that invests in start-ups participating in the KEC accelerator program so that the best possible candidates are recruited.
And, as of last night, plans are underway to fill the gap.
“We are going to raise $250,000 in small subscriptions to invest in each of the four teams selected to participate in the coding cohort of this year’s ‘The Works’ accelerator,” Dobson announced last night during the monthly webcast meeting that Angel Capital Group (ACG) has with its more than 200 investor members located in 11 states.
It’s a major commitment for Dobson, who as ACG’s Chief Executive has witnessed the impact that really early investments in accelerator-based start-ups can have. Now, he’s decided to take the “bull by the horns” and lead an effort to fill that missing very, very early seed capital deficit.
You might think of it as recruitment capital, whether it involves the entrepreneur relocating to the host city for the duration of the multi-week accelerator or a local person relinquishing his/her day job to work full-time on the start-up idea.
It’s truly about accelerating the formation of the start-up to better position it for long-term success.
Earlier this week, KEC began recruiting applicants for the renamed accelerator that is actually a merger of the organization’s “MediaWorks” program, offered in both 2014 and 2015, and its inaugural “CodeWorks” accelerator that was offered in 2015.
For 2016, there will be a single multi-week accelerator with two cohorts – one composed of content creators for social media platforms like YouTube, Snapchat, and Instagram and the other comprised of software engineers developing products.
Under the plan Dobson outlined last night, accredited individuals will be able to invest in a new entity named The KEC Fund, LLC. It will be managed by ACG, drawing on the organization’s existing infrastructure, and will invest an equal amount in each of the start-ups selected for this year’s “The Works” accelerator program. KEC will select the finalists with input from the new fund’s members.
Individuals can make a modest investment in the fund that will collectively make a big impact.
“We hope this helps us attract new investors for this critical segment of our local economy,” Dobson explained. “We have great leadership with the KEC. Now, it is time for a grassroots, community-based fund to help take the KEC program to the next logical level, on par with its peers around the state.”