MassChallenge and Entrepreneurship
Mass Challenge is a Boston-based accelerator that annually takes over one hundred emerging entrepreneurial companies through an intense mentoring program in order to build enterprises from the ground up.
Supported by private industry and the Commonwealth of Massachusetts, Mass Challenge works out of offices on the Boston waterfront. Each year, between the 1st of March and (this year) April 11th, entrenpreneurs around the world can apply to be mentored here in Boston. Application are available at ww.masschallenge.org. Last year, 125 companies were selected from over 750 applicants; at least one principal from each selected company must be resident from July to September to participate in the four month accelerator program, and in October ten to twenty such companies will be awarded seed funding in the aggregate of $1,000,000. (Disclosure: my law firm, Duane Morris, is this year, and each year has been, a Mass Challenge sponsor.)
I asked Akhil Nigam, a founding principal of Mass Challenge, to describe the niche he is attempting to fill. Akhil is looking for teams with new ideas in any industry. They hope to identify future high growth companies. He characterizes the competition as a search for the very best new ideas, and for teams which can benefit (aside from access to capital resources) from the 300 or more mentors and from the peer-to-peer contact with other emerging companies.
Who wins the money? Akhil believes that the winners share several characteristics:
- A high impact idea.
- Which is disruptive within a given industry.
- Carried forward by a really good team which has the flexibility to react to feedback when the shaping force of the marketplace defines commercial strategy.
Mass Challenge is making a “bet” on people, not just on a pitch. Can the people execute?
Mass Challenge is open to entrepreneurs from around the world, and it is “free;” Mass Challenge do not take equity and does not receive payment. Akhil now is looking to promote the accelerator program in New York, London and perhaps Israel, but is planning for now to remain physically located on the Boston waterfront.
Beyond keeping American entrepreneurship pre-eminent, start-up companies drive American business and American employment, and put capital to work (the 2010 accelerator led to the raising of over $100,000,000 of capital and the creation of more than 500 jobs in its first year). I inquired as to suggestions for fostering American entrepreneurship. Certainly Mass Challenge cannot support all the disruptive ideas that will lead to high growth. Akhil makes a societal argument: we need broad social and government efforts to support entrepreneurship, the coming together of communities to foster mentorship programs to help new ideas grow, and career options in entrepreneurship in the universities.
Government policy initiatives, perhaps through SBA or tax incentives, also are needed. The growth of angel networks, and the possibility of “crowd funding” for start-ups, could be of help. (This week Massachusetts Senator Scott Brown conducted a panel at Mass Challenge exploring crowd funding options.)
Akhil also noted that we are “in a different time and age” and start-ups need talented workers. The government needs to step in with retraining programs to provide the kind of support for start-ups that will drive not just innovation but also commercial realization; this is a theme which echoes discussion at the Association for Corporate Growth’s Boston conference last week.