By guest authors Irina Patterson and Candice Arnold
I am talking to Troy Henikoff, co-founder and CEO of Excelerate Labs, a Chicago-based intensive summer accelerator for startups. The program attracts dozens of mentors from around the country to work closely with, usually, ten teams of entrepreneurs. The 13-week program begins on June 1 and on August 31 culminates in an Investor Demo Day, where the entrepreneurs showcase their startups to more than 200 angel and venture investors.
Irina: Hi, Troy. Let start with a brief overview. What is the structure of your accelerator?
Troy: I heard an interesting term for it from Brad Feld, when I was talking with him at TechStars, New York. He refers to it as a “for-profit philanthropy.”
What that means is that if you ask the IRS, we’re a for-profit organization. We haven’t applied for not-for-profit status, but we’re a philanthropic venture. There is a fund behind it that helps fund the companies.
At the end of the day, if your goal is to make as much money as you want to, you probably wouldn’t be investing your time and your money in our fund. But if your goal is to promote entrepreneurship, absolutely [you would].
My personal goals, while short term, seem selfless in that I gave all this time and energy to the program last year. I even wrote a check to support the companies. I didn’t make a penny. I didn’t get health insurance. I worked long hours, all that stuff.
But, in some ways, my goals are very selfish, because what I want to do is grow the entrepreneurial community in Chicago. I want it to be a rich ecosystem with lots and lots of startups. In the long run, that’s going to help us all, but it will help me personally as well.
If there are more startups, more technology businesses in Chicago, that’s the stuff I love to do. Those are companies I can help, I can invest in. Who knows? Maybe I’ll go back to operating.
Long term, I think it’s going to be of great benefit to me and many other people, including the overall economy, to get these startups launched and generating new jobs and helping our economy recover. But, in the short run, we’re all doing it because of passion and because of love.
There’s no profit for Excelerate itself, certainly not in the short run. We’re all working hard and doing it on a very, very tight budget and trying to give every penny we have to the companies, to the benefit of the companies that are in our portfolio. I hope that we’re going to launch a lot of great companies out of it.
More important, I should talk about what I see our role in the Chicago ecosystem to be. We have chosen to take ten companies each year, and only ten.
But, there are a lot more than ten great companies in Chicago, obviously. Our role is to shine a bright spotlight on those ten companies each year and to give them a little bit of seed capital and some free office space, pro bono legal support, and more mentoring than they can possibly handle.
As a result, they are going to do really well – that is our goal. By shining a bright spotlight on ten startups that do well, we help those ten companies. What is more important is the ripple effect. The 200 companies that are watching those ten and using them as inspiration; those ten are the role models for other companies.
If we do our job right, we’ll help ten companies get off the ground, but indirectly, we’re going to help 200 companies get off the ground. That’s what we’re trying to accomplish each year.
Irina: What’s your own background?
Troy: I came out of college in 1986 and knew that I didn’t want to go to work for somebody else. I didn’t know what that meant. I didn’t even know the word entrepreneurship. I remember, shortly after starting my first business, someone saying, “Oh, you must be an entrepreneur.” I kind of played through, and then when I got home, I looked it up in the dictionary to see what it meant.
It was at a time when entrepreneurship was not in the news. There were not many people doing this. I had no resources to learn about this stuff. All I knew was I could provide a service that was valuable to businesses and that they were willing to pay for it.
Specifically, in this case, it was custom software development. From day one, it was me sitting in the basement writing data applications, custom database applications, for businesses.