Bend launches VentureBox with a different take on the accelerator model. Startups pay to play.

Molly Young of The Oregonian highlighted Bend’s VentureBox today, a new accelerator in central Oregon.

The new accelerator takes the typical startup accelerator models—like Portland Seed Fund, Upstart Labs, and PIE—in a different direction. Like 180 degrees different.

Now, before I say anything more, it’s important to note that I work for a startup accelerator (PIE). And I’m a big fan of anything that helps startups. Also, I don’t see VentureBox as a competitor. And I’m sincerely hoping that they help the Bend area startup scene. The more the merrier, quite frankly.

That said, what jumped out at me—and others—was the way that they had tweaked the model. You see, to participate in this accelerator the startups don’t get capital. They pay the mentors, ala the university system.

The cost to go through the VentureLanch is $1,500 per company. You will need to incorporate a company during the semester, which will cost money, and you may have other business expenses. VentureBox works to reduce the cost of launching a new business by working with our sponsors to help create scholarships for our Founders. There is a good chance an organization in the Central Oregon community will step up to provide a scholarship for you so don’t let the tuition cost keep you from applying.

So $1,500 to get in. And when you graduate? You provide 2% equity of your company to VentureBox, too.

If an enrolled Founder graduates or continues to the last 30 days of the program, the enrolled Founder is asked to contribute two additional fees. First, the Founder is asked to grant a warrant for 2.0% of their company stock to join a Bonus Pool of shared equity upside with VentureBox’s Mentors and Staff.

In a day and age when the most successful accelerators—Y Combinator and TechStars—are finding ways to give their startups more funding and more funding, this approach seems, well, backwards.

But maybe that’s just me.

  1. First thought upon reading: LOL
    Thoughts upon subsequent readings to make sure I read correctly: LOL

    I’m sure they’ll take the world by storm with this model.

  2. I could not agree more with @Bradley Joyce. If there is one thing developing entrepreneurs don’t have it’s money, and those that do typically have their own networks to go with it. The result is that models like this attract the desperate and ignorant. For those with daddy’s money that want to play entrepreneur for a while, why not? But for anyone looking to build a true foundation in the business world, it doesn’t start by paying to give equity away to volunteers with no personal risk involved, even those with good intensions. As an investor, I wouldn’t even want to be associated with a group like this. Groups like PIE get enough flack and they actually pay the entrepreneurs and provide a place to work from for several months. Go figure.

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  5. @ryan, if they really don’t need the seed funding, then chances are pretty good they don’t need to pay for some consulting and give up 2% of their company. If you really need that much help, you should be finding an advisor that would come on board for that 2% or less.

    At least that’s how I feel about it 🙂

  6. Rick, I had to do a double take for a second. I think, I think there was some negativity there. You feeling ok today?

    Seems like Portland went through this with Portland Ten too. Is it a consulting business or is it an accelerator? But, there may be one other type of business to consider too, adding to Bradley’s list. Those that don’t need the seed funding and feel it’s cheaper to give up 2% than take seed funding and give up 6%. That 4% difference may not be insignificant. Are most accelerators still doing 6? Will be curious how the first class feels about their experience.

  7. This is the old model… which has been dying a slow death ever since the uprising of incubators like YC, TechStars, PIE, etc etc.

    VentureLaunch will quickly find they’re getting two types of companies coming through their program. Those that desperately don’t want to leave central oregon, and those that have been rejected by every other incubator and have no option left but to pay.

    Of course, the counter argument to this is Founder’s Institute, which is extremely successful and graduates speak very highly of even though they pay and give equity….. but there is a prestige factor at play there as well.

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