A new nonprofit security tech accelerator — the first of its kind in Colorado Springs — is taking shape, aiming to recruit entrepreneurs to the city and boost cyber economic development.
Exponential Impact (EXi) will take a holistic approach to mentoring and coaching, said CEO Vance Brown, and will focus not only on technology and funding but also on leadership, ethics, humanity and sustainability.
“I’ve heard a lot about how it’s difficult to bring in funding and build technology companies in Colorado Springs, and I beg to differ,” said Brown, who is co-founder and executive chairman of Springs-based Cherwell Software. In 2014, Cherwell was recognized as one of the 101 fastest-growing companies in North America by Deloitte’s Fast 500.
“A lot of people say it’s hard to raise funding, but just in February we were able to raise $50 million from KKR — they may be the largest private equity company in the world and they had no problem with Colorado Springs. They’re just looking for good technology and good management and good companies.”
EXi will target security technologies including cybersecurity, artificial intelligence and Blockchain.
Brown said Colorado Springs has “a lot of security-based DNA” and needs to “bring in some of the best in the world for security technologies, if we’re going to be a thriving city that hopes to be the hub not only for cybersecurity but security technologies in general.”
Brown is in discussions with a number of organizations, including institutional investors, to work on early stage funding. The aim is for EXi to have its first cohort and program in the spring.
The application and vetting process will be rigorous, beginning with Launch Camp, a five-day retreat EXi’s website describes as “sessions, activities, one-on-one mentoring, high-level networking and hands-on startup shaping.”
“I haven’t heard of other accelerators that do so much to filter and find the best. … We hope to improve the success rate of the accelerators with the vetting,” Brown said.
Organizations that are a good fit go on to the three-month accelerator program. Unlike most accelerators, EXi will not necessarily require startups to exchange equity for funding — because some may not need it.
“With Cherwell, for instance, we bootstrapped it, and I don’t know if I’d have even wanted to go to a program where I’ve got to give 5 to 8 percent [equity],” Brown said.
Changing this aspect of the accelerator will help attract top entrepreneurs and companies that may not want to give away or sell stock early, and it could make those companies more sustainable in the long run. EXi will help secure funding for those startups that need it.
Chicago-based tech accelerator 1871, which has incubated more than 500 companies in five years, has agreed to partner with and advise EXi, Brown said. EXi will also be part of the Global Accelerator Network. Brown said he hopes the city and state will provide incentives to keep new tech companies in Colorado Springs or persuade them to relocate here.
“In the film industry, if an outsider comes in and spends a million dollars to do a film in Colorado, there’s a rebate of 20 percent… That’s a heck of an incentive,” he said. “If we’re incentivizing these other companies that pop in and leave, why wouldn’t we incentivize companies to come here and stay here? That’s a gift that keeps on giving.”
Startups get about $1 million, on average, in the funding round after an accelerator, Brown said.
“What if they stayed here and spent that million here?” he said. “We’re going to throw out a global net, but getting them to stay here is the goal.”
The accelerator is in the proof-of-concept stage and bringing in funding is key, he said.
EXi will be “really important in the overall ecosystem in Colorado Springs” and these security technologies represent “limitless possibilities,” said Hannah Parsons, Colorado Springs Chamber & EDC chief economic development officer.
“It will create a place for emerging and growth companies to … participate in a mentor program and potentially seek and receive additional funding and/or investment, post-accelerator, and ideally help some of those companies remain in the region,” Parsons said.
The Chamber & EDC is helping EXi make connections and set up the nonprofit organization.
Brown said EXi hopes to “explain to the community what we’re doing, why we’re doing it, how we’re doing it and how they can get involved” as part of the annual Governor’s Cybersecurity Symposium in November, with Ret. Gen. David Petraeus scheduled to speak.
The symposium’s opening events, co-hosted by the National Cybersecurity Center and EXi, will represent NCC’s first opportunity to work alongside the accelerator, said NCC’s CEO Ed Rios.
“The [NCC] is here to support all accelerators in Colorado Springs, across our state and throughout the nation to improve cybersecurity for all, accelerate cyber economic development and increase cyber workforce development,” Rios said in an email.