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“The success rate for founders, if it’s their first company, is dismal—it’s like 10 percent,” says Devin Turner, co-founder and CEO of FocalCast, a St. Louis-based company that created a multidevice, mobile platform for interactive presentations and collaborations. As a newly minted graduate of Marquette University in 2014 with a mechanical engineering degree, he didn’t know much about starting a company, but he knew enough to know that he didn’t know enough.
“When you’re a first-time founder, investors look at you and think, ‘This kid doesn’t know anything,’” says Turner.
And they could be right: First-time founders are often adrift in a world they don’t yet understand, navigating the waters of investment, scalability, business administration and product development.
St. Louis-based accelerator program Capital Innovators focuses on these early-stage startups. Created by CEO Judy Sindecuse and captained by program director Brian Dixon, Capital Innovators is the lifeline new founders often desperately need.
Discovering a Need
The idea for the program began in 2010 when Sindecuse was mentoring at ITEN. A successful CEO and founder herself, she saw the the potential of St. Louis’ startup community and believed that with the right push, a vibrant ecosystem could become a reality.
“Companies weren’t getting everything they needed,” she says. “We had passionate, smart founders sitting on what I thought were great ideas, but they weren’t getting to that point where a stranger would feel comfortable investing in their businesses, so they were dying on the vine.”
So in 2010, Sindecuse began assembling the bones of what would eventually become Capital Innovators—the first accelerator program in St. Louis—piecing together the type of mentorship pool and curriculum she felt would be most valuable. Techstars, one of the world’s most highly regarded accelerators, provided guidance along the way. And in 2011, St. Louis’ first accelerator program made its first investment.
Spurring STL’s Growth
When T-REX was created in 2011, one of its first functions was to house companies going through Capital Innovators. In the next few years, additional St. Louis accelerators emerged—SixThirty (2013, FinTech), Prosper (2015, women-led companies), The Yield Lab (2015, AgTech) and Stadia Ventures (2015, sports-focused companies)—with Capital Innovators sharing best practices along the way.
Today, Capital Innovators is no longer just a regional name. For the second year in a row, it was ranked as a top 10 US accelerator by the Seed Accelerator Rankings Project. “Our ranking draws great innovations to St. Louis and fuels growth in the startup ecosystem as a whole,” says Sindecuse. “It provides tremendous validation and helps bring amazing deal flow into the city. When companies apply to our program because they see it’s a top 10, they start looking at St. Louis, and recognize the robust ecosystem that has developed here in recent years.”
Mentorship is the heart and soul of what Capital Innovators provides. Companies have a pool of 50 mentors available to them, but six to seven of those mentors serve as leads and pair with a company throughout the program. The others are subject matter experts who provide education on the seemingly innumerable avenues founders must explore in their growth.
“You have so many questions that you don’t always know the answers to. Having a dedicated resource to answer those questions literally on-site was hugely helpful,” says Robin Rath, co-founder and CEO of Pixel Press, a game technology startup that graduated from the accelerator in 2013. “Being in that proximity keeps you off an island. Building a company sometimes feels like that because there’s pressure and stress, and you don’t even know if you’re on the right path. Having that network around you is inherently valuable.”
Dixon facilitates usage of that network, making sure companies find the help they need and that the mentors—all from the St. Louis region—understand the importance of their role.
“A lot of accelerators have a book of mentors, and companies have the ability to schedule office hours with them, but they don’t always facilitate the meetings and don’t require it as part of the program,” he says. “We keep a balanced, medium-sized pool so we’re still providing value, but we’re not overwhelming the companies.”
Enhancing the Experience
To ensure the accelerator remains valuable, Dixon and Sindecuse constantly work to refine their model. Each session is followed by diligent review, fueled by feedback from mentors and founders on the process and programming. They then identify candidates for the next session, receiving around 240 applications. Each is carefully vetted to make sure the company will receive the highest value from the program.
For Turner, the value was immense. He and co-founder and CTO Charlie Beckwith were part of the spring 2015 class, and saw an incredible 12-week metamorphosis.
“When we went into the Capital Innovators program, we had a beta Android app that we couldn’t even sell. It wasn’t even set up to take cash,” Turner says. “When we came out of the program, we had a cross-platform application on iOS and Android that we could sell and take to market.”
Capital Innovators also turns to other accelerators for perspective. As part of the Global Accelerator Network, an exclusive, invite-only group, they’re able to compare notes with the top programs in the world.
Dixon strongly believes Capital Innovators will take a company from accelerator to acquisition someday. While it’s not there yet, its success is still measurable.
To date, Capital Innovators has invested $3.6 million in startups, and those investments are currently valued at $10 million. According to Dixon, 95 percent of companies stay in St. Louis after the program, and within six months of starting the program, companies on average see their valuation double.
“It’s so clear: There’s no way in the world we would be where we are right now had we not done the Capital Innovators program,” Turner says, who adds that entrepreneurs go through “every problem you can think of” when starting a business. “[It’s like] getting an MBA in 12 weeks.”
This story was published in EQ’s Spring 2016 print issue.