The holy grail in any city is to spawn the formation of high-growth companies that create a virtuous cycle of economic growth. Examples include what Dell Computer did for Austin; what Microsoft, Amazon, Starbucks and Costco have done for Seattle; and what Intel, Google, Facebook and Hewlett-Packard did for Silicon Valley.
The formation of each of these companies was serendipitous, however. In recent years, entrepreneurs in various cities have worked hard to purposely bring forth a new wave of such companies through “accelerators.”
An accelerator is roughly the business equivalent of winning or placing high in the voting of “The Voice” or “American Idol.” A few great entrepreneurs audition their companies and ideas and, if accepted, get mentoring and access to early stage funders, in return for giving the accelerator some piece of their company, typically about 6 percent.
Y Combinator in Silicon Valley, founded by Paul Graham, is the Harvard of accelerators. Techstars, launched in Boulder, Colo., by Brad Feld, has grown to having more than 20 branches in the United States and other countries.
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Now Wichita has its own accelerator, e2e, courtesy of the efforts of commercial real estate developer Gary Oborny, who with Bruce Rowley and Roger Turner and others in the city attracted veteran early stage investor John Dascher from Denmark to run it. Even before its formal launch planned later this spring, e2e already has 30-plus mentors, more than 100 potential investors, and has led $10.6 million in financing for two Wichita companies.
Oborny and Dascher have even bigger ambitions. They see e2e becoming the center of gravity for a new entrepreneurial ecosystem in Wichita that will diversify our economy beyond traditional manufacturing, retailing and health care. Their first two deals, both in information technology, have shown that Wichita investors and mentors have embraced this vision.
The e2e effort differs from other accelerators in other respects. It is not restricted to startups, but will take companies of any age, provided they can be scaled. Other accelerators accept “classes” of successful applicants into structured multi-week programs and have standardized arrangements for sharing equity. Not so with e2e, which will customize its mentoring, dispense with regular class schedules, and design the nature and amount of its upside participation to suit the needs of each participant.
The e2e accelerator also has had promising initial talks with Wichita banks to provide bank financing; more traditional accelerators only give companies access to early stage equity capital.
Dascher and Oborny see no problem with deal flow. Through their multiple contacts, they already have interest from multiple Wichita entrepreneurs. Interest will only grow through the networking opportunities that will be showcased every week at 1 Million Cups. Dascher is happy to hear directly from entrepreneurs (jfd@e2eAccelerator.com).
The success of e2e and other entrepreneurial efforts in our city will depend on our having a plentiful supply of skilled talent to build the new companies. That’s why, as I’ve written here before, Wichita State University’s multiple efforts to attract students from Wichita and beyond and to give them a broad array of business-relevant skills are so important.
Robert Litan of Wichita is an adjunct senior fellow at the Council on Foreign Relations and former vice president of the Kauffman Foundation.