By guest author Irina Patterson and Mridula Velagapudi
Irina: What are the core benefits to entrepreneurs that you bring to the table?
Paul: My three partners have all started businesses that you know, and in total there are hundreds of millions of users. We started companies that did quite well, and [with i/o Ventures], we are sitting down and giving a lot of personal attention to the companies we work with.
We give them an amazing office space to work out of, and most important, we also bring in the best angels and mentors we know and get entrepreneurs access to people from YouTube, Yelp, Digg, and so on. They are all our personal friends, and they will come and hang out at our companies.
Also in the program we get the company in front of more than 200 investors. This helps them to raise their money. Every company we have ever incubated has gone on to either be acquired or raise money. So, we have a pretty good success ratio so far. Of all the six companies, two of them were acquired already and the other four have raised anywhere from $500,000 to $1 million.
Irina: Is there anything else that makes your incubator very different from other incubators?
Paul: Besides the people that are involved, location in the city, and the hands-on mentorship are the biggest things. Our extensive network of investors really makes a big difference.
Irina: How many applications do you usually receive?
Paul: For the most recent group that is coming up, we had about 350 applications.
Irina: Where do they usually come from, and how do they learn about you?
Paul: Usually by word of mouth, the network, and referrals. Some people hear about us through a press release or something like that. We have had people apply from all around the United States and even from overseas.
Irina: How do you process those applications?
Paul: We do a couple of things. We do a first test, which is that the company should be in the industries [we cover, which are the Internet, gaming, and mobile]. After that, we make teams do a programming test to see if they are good technical developers. Then we sit down and do a lot phone calls with companies and also meet with our partners internally to discuss which ideas we think would be the biggest and highly successful, and that is how we go about evaluating the company.
Out of about 350 companies which apply, we select five or six. That way we can be very focused and give them a lot of personal attention.
Irina: Is there anything you say to the other 345 companies that are not selected?
Paul: If we think they are doing great stuff and not quite a good fit for us, we try to help them with some advice.
To the other ones, we say no, unfortunately, it is not going to work. Maybe the ideas should change a bit, or if we think they are really great, they are welcome to come to some our events or something like that, but they are not ready right now. Sometimes they really cook up good things, but they are doing it in industries we don’t cover, like biotech, or they’re working on things we are not just excited about.
Irina: How do you do your due diligence?
Paul: We do phone calls. With some of the companies that further along in the process, we talk to some of their former co-founders or people who worked with them can endorse them. We try to get an idea of one, their market and two, who they are as individuals.
Irina: Once you accept companies for acceleration, what is your next step?
Paul: The next step we have is a move into the office. The entrepreneurs are hanging out with us, and we start having them go through a series of events and ‘office hours’ and the program we have set up with them.
There is a lot of personal work with my three partners and me. We also do weekly dinners with all of the companies. They get to know each other; they work together. We bring in the VCs every week to meet with the companies. Then they get to meet with people on the mentor list. So, they are going out there and spending half an hour to an hour with owners of large companies or tech companies.