Patrick Riley, CEO of Global Accelerator Network, speaks to local entrepreneurs earlier this week.
Patrick Riley, CEO of Global Accelerator Network, speaks to local entrepreneurs earlier this week.

Peak Startup hosted its Entrepreneur Evening on Tuesday night at Catalyst Campus, and business professionals and community leaders learned about the benefits of startup accelerators, a growing way to raise capital for new businesses in a short amount of time.

Patrick Riley, CEO of the Global Accelerator Network, a worldwide network of accelerators in 70 countries, spoke about the advantages of the accelerator process. Riley said a total of 4,516 startups have gone through programs at the Accelerator since it was founded in 2010. In 2015 alone, GAN helped 900 companies with its programs.

For three years, Riley was on the executive team at TechStars, a startup accelerator  in Boulder, where he oversaw business development.

“We take companies from the concept stage and get them ready for seed funding,” he said. “It’s a three-month process that includes funding and strong mentorship, and companies present a finalized product at demo day — and are hopefully funded by venture capitalists.”

An accelerator needs community support, including the right number of companies, right amount of funding and angel investors to be successful, Riley said.

“We’ve learned how to build an ecosystem through the accelerator model,” he said. “It’s not the only way to help startups but I think it’s the best way.”

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Businesses inside an accelerator benefit from seed funding, strong mentorship and a final product to pitch to investors.

“It’s real and tangible,” he said, “because these companies and investors don’t just want a business plan.”

In the early stages, accelerators help startups get some of the money needed to launch and together, companies can work together to develop a strong startup community, he said.

“These are companies that start out with no money and then three to six months later about 56 percent of them raise $900,000,” he said. “It’s substantial stuff.”

And the accelerator’s Demo Day, during the last stage of the process, allows companies to pitch to investors. It’s become a community event in Boulder, according to Riley.

“At Demo Day for TechStars, it’s 400 people in a giant theater cheering on those companies,” he said. “It’s become a pitch for the whole community.”

Startups that go through an accelerator are getting money, creating jobs and staying in business, Riley said.

“And that’s why it’d be great for Colorado Springs,” he said.

The process allows startups to thrive because they’re working alongside their peers, he said.

“Millennials crave connection, and it’s a place where you can talk and connect with one another and feel like you’re known,” Riley said. “This is why startup spaces work so well and we’re seeing groups like Startup Weekend really take off.”

The average startup accelerator receives 273 applications, 55 percent coming from the local community, within 50 miles of the accelerator, Riley said.

“It’s all local,” he said. “About 67 percent of mentors involved in the process are local and about 71 percent of the money going to accelerators is from local investors. It’s an ecosystem that has to be local or it doesn’t work.”

Startup accelerators are an efficient model to deploy capital, Riley said.

“Startups, mentors and investors come to one spot and it makes it super easy to deploy capital,” he said. “We need efficient ways to make this happen and it’s not virtually.”

Chris Franz, president and founder of Peak Startup, confirmed people in Colorado Springs are working to put together an accelerator.

“I’m not going to talk about it specifically, but there will be people who will need your support when they announce it and are ready to go,” he said.

Local startups Lot Spot, Hively and Titan Robotics also shared their business success stories at the event.

Peak Startup is a local nonprofit focused on supporting and growing startups to help drive culture and economy in Colorado Springs through more than 100 events a year, including Entrepreneur Evening, Pitch Night and Startup Weekend.  CSBJ