Sanjay Puri thinks more needs to be done to help entrepreneurs in the Seattle region — one of the reasons why he recently formed the startup accelerator 9Mile Labs. He calls the early-stage funding environment in Seattle at the moment “inadequate” — something I’ve also discussed in recent columns and remarks.
Well, now the former marketing manager at H-P and Microsoft is doing something about it. And he’s lined up some big-time support to make it a reality, announcing today that Microsoft Vice President Tom Casey and veteran venture capitalist Enrique Godreau are joining 9Mile Labs as partners.
“The addition of Tom and Enrique ultimately helps us support the entrepreneurs better because, with the types of resources and additional vendors that we are able to recruit, that’s what brings value to our startups,” says Puri. “And that’s where we see value of an accelerator.”
Casey technically isn’t starting until March 1, but he’s already fired up about the new role.
“The opportunity to help catalyze the Seattle scene into a vibrant, interconnected, and world-class startup ecosystem is exciting,” Casey says via email.
Godreau, a fixture in the Seattle venture capital community for more than 15 years, is equally excited about 9Mile’s approach.
“I have a very strong belief that the opportunity to work with startups in a very engaged way is one of the best ways to remove risk from emerging companies, as well as build value faster,” said Godreau, who left Seattle’s Voyager Capital last year.
9Mile operates much in the same fashion as TechStars. Both are technology incubators which operate three-month long bootcamps for entrepreneurs in which the companies receive hands-on mentorship, concluding with a big presentation called Demo Day. (9Mile’s first is slated for June 27th) 9Mile plans to invest $20,000 in nine companies twice a year, taking a four to eight percent equity stake in those companies accepted into the program.
The big difference with 9Mile is that it is focusing exclusively on enterprise software, or B2B companies. That’s one of the hottest areas in the tech market today — highlighted by the rise of Splunk, Tableau Software, Box, Jive, Apptio and many others.
To date, 9Mile Labs is self-funded, and it has enough cash raised to support the first classes in 2013. Eventually, Puri said that they may raise additional cash to support the concept. But, for now, he said they are looking to “execute and refine the model based on our own money.”
The accelerator also has lined up an impressive array of advisors, including venture capitalist Bill Bryant; Apptio founder Sunny Gupta; Smartsheet founder Brent Frei and a number of executives from Microsoft.
Godreau said that B2B companies have different needs than consumer-oriented startups.
“Selling to a business is not the same as selling to a Joe or Mary user,” said Godreau. “They have to have rich support structures, be secure in their offerings, be seamless in terms of integration with existing systems — and so all of those things require a bit more sophistication and hand-holding than you might need in a B2C environment.”
Because of that extra care, Godreau said that companies accepted into the accelerator program will be able to hang out in the 9Mile Labs facilities for an extra three months after the formal programming concludes, drawing on the resources of those in the organization.
Since Godreau previously worked at a more traditional venture capital firm, I asked him how he though he’d adapt to the new incubator model. As a mentor in other accelerator programs in Seattle, Godreau doesn’t expect any challenges.
“Stage-appropriate capital is really required across the entire ecosystem — from the formation of the company to becoming a public entity,” said Godreau. “At these beginning stages, I think it is increasingly difficult for these traditional venture firms to assume the funding of technical risks…. And so the opportunity to increase the funnel at the very early stage is something that accelerators have proven to be very effective at.”
Godreau said there’s a tremendous demand among entrepreneurs for the types of services that 9Mile Labs provides. Puri agrees, saying that there’s a funding gap in Seattle right now.
“Think about a region which has companies such as Amazon, Google, Microsoft and many, many other good technology companies — where you have hundreds of thousands of engineers — and yet you have two accelerators really to speak of and a very risk-averse angel investing type of environment,” he said. “It points to the fact that this startup ecosystem needs a lot more support than it currently has. And we feel we can fill a gap in that early-stage startup ecosystem. And, once that ecosystem grows, everything else comes along with it.”
9Mile has yet to formally announce its office locations, but Puri said that they plan to be based on Eastside, eventually also adding a location in Seattle.
“We plan to be bi-coastal,” said Puri with a laugh.
Previously on GeekWire: New accelerator 9Mile looks to help jumpstart B2B startups