We announced today the establishment of the Amplifier Business Accelerator Program. The link to the Program is here. We did this for a number of reasons. The largest one is that as we looked at the local early stage community we saw that the recession has caused an almost a complete breakdown in the local company formation ecosystem. For many years there has been a tendency to couple an entrepreneur’s desire to obtain experienced help and access to contacts with the need to obtain an investment from a VC firm or an Angel group. This worked very well when times were good – or at least there were enough successes stories when times were good to obscure the entrepreneurs and companies that didn’t get venture capital funding and missed out on its benefits.
Many entrepreneurs have a love/hate relationship with outside investors, particularly venture capital, but anecdotal information and academic studies both show that the participation of a one or more experienced investors in a business does improve its chances of success. It’s a hard bargain, to be sure, with many pitfalls for the unready. But, the correlation is strong. That being said, the real correlation is not the obtaining of venture capital; it’s the addition of experienced business people who have an economic stake in the start up’s success.
What is lacking now, with the dearth of early stage investment capital is the availability of help that comes with an investment. That is the real void that entrepreneurs are suffering through. In our early stage ecosystem, the entrepreneurial community has already adjusted to starting and growing their businesses through sweat equity and bootstrapping. But, the local investment community hasn’t adjusted to this new reality.
As we looked at the situation through Amplifier’s prism we saw a clear choice – we could make one or two new investments during the next year, the traditional VC model, or we could try to use our platform to help a larger number of entrepreneurs. Our platform, combining a good team with a technology infrastructure, allows us to scale up the number of companies we actively work with without stressing our business model. So, we decided to do something different – provide a small amount of capital and a lot of help, because help and optimism is really what is lacking right now in the early stage community.
We’ve cast our net relatively widely in the types of entrepreneurs and businesses we are looking for. They don’t need to be Internet businesses, nor do they have to be raw start ups. What we are looking for are:
1.
Real businesses
. With replicable models. A participant in the Program doesn’t have to be a technology business. It just has to be a business that can grow rapidly under the right conditions.
2.
Committed people
. We like entrepreneurs that are strongly engaged in what they are doing, and will find a way to succeed.
3.
Situations where our help is valuable
. This is not merely a financial investment – it’s an investment by Amplifier and its partnering organizations of their own sweat equity. Therefore, we want to work with entrepreneurs that will value the help as much as the money.
4.
Investments. Although our initial dollar investment amount in each participating company will be around $50,000, the point of the Amplifier Business Accelerator Program is to make our participating companies a better investment, both for us, and other investors. We find that the best way to get investment dollars is not through a public show and tell presentation, it’s through selective and targeted marketing to investors and individuals who like direct referrals. For participating businesses that need more capital subsequently, we think that a focused approach is more likely to be successful.
If you haven’t done so already, you can find our criteria and application instructions here. If you like what we are doing, please let us know and tell your friends. We would like the Amplifier Business Accelerator Program to be successful for many reasons. And, we hope that you will feel the same way.