Graeme Thickins on Tech

Reflections & analysis about innovation, technology, startups, investing, healthcare, and more .... with a focus on Minnesota, Land of 10,000 Lakes. Blogging continuously since 2005.

Tag: VC (Page 1 of 10)

From Bootstrapping a $70M Company to Leading a VC Fund: Lessons for Founders

December 13, 2025 / / 0 Comments

Twin brothers Rob and Ryan Weber, founding partners of Great North Ventures, have raised two funds and invested in more than 50 startups to date and counting, throughout the Midwest and the rest of the county. Well before that success, however, they were founders themselves of their own ventures, beginning in their 20s, and they learned a lot the hard way in their life as “operators,” a label they proudly wear. From that experience, it’s no surprise they have actionable advice for entrepreneurs in today’s world of AI and fintech. I recently interviewed Rob and Ryan to hear some of the stories they willingly share as hard lessons for founders launching startups today.

We begin with a story from their early bootstrapping days with their startup, Freeze.com , which they founded in Minnesota in the late 1990s. “We raised an angel round of $320,000 in the spring of 2000, just before the dot-com bubble popped,” said Rob. “We were generating around $50k a month in free cashflow from advertising revenue from our prior dot-com publishing business, so we didn’t really feel we needed the cash from the angel round. However, we were excited to bring on a couple of those angel investors as board members to provide us mentorship and guidance.”

In the year after this angel round, Rob and Ryan hired their first dozen employees and were on the verge of launching their core optimization back-end system, which they had been incubating. “Meanwhile, our monthly cashflow began to decline very quickly,” said Rob, “as the majority of our ad revenues came from dot-com startups that had run out of funding. We were down to less than $100,000 in the bank and were losing money every month.”

That led to a particularly mentally difficult period, Rob said. “I remember one week I couldn’t force myself to walk up the stairs to our office, and the anxiety was causing a serious lack of sleep. Luckily, I got help and worked through this very difficult time.” AI illustration depicting Rob Weber dreading to go upstairs to the office

Rob and Ryan’s board – a benefit of that angel round – advised them to reduce their operating costs and conserve cash to weather the storm. “At age 21, my brother and I had to let go a third of those first employees. It was first time we’d ever had to experience a layoff. It was hard.” However, the pair managed to launch their back-end system, and pretty quickly start to generate significantly more free cashflow with the help of their remaining team.

They were definitely back on track. “By 2005, we had scaled to $30 million in annual revenue and $5 million in EBITDA,” said Rob. I asked him what were the hard lessons he and his brother took away from that very difficult early period.

“Number one, raise cash when you don’t know if you need it,” he said. “It will be easier to do and you never know what the future will bring to your business. And, two, remember your business doesn’t define who you are. Founders sometimes lose track of this because they commit so much energy to their business.”

Because Rob and Ryan have lived the founder’s journey literally from a cold start (pun intended), and now evaluate founders for a living, they have more valuable lessons they can share to help today’s founders. The ones from the early days are especially instructive, as founders who bootstrap successfully for survival often are the ones that VCs find the most promising to fund.

Profitability Isn’t Optional, and Metrics Are Critical

Moving from survival to profitability was a journey the brothers obviously conquered. “When we were just starting out, we had pretty good aggregate metrics for our web traffic, such as how much traffic we were getting each day, from which search terms, and so forth,” said Rob. “But we had no idea how the traffic was converting and contributing to our revenue generation.” Once he and Ryan launched their optimization system, they had much better granularity as to how traffic was converting. “That allowed us to run experiments and optimize for efficiency,” said Rob. “The vast majority of our competitors had no such optimization system, so our revenue and free cashflow started to soar.”

This focus on metrics remains essential for startups today, the brothers point out. “Most lack granular KPI measurement for their businesses, which causes them to make decisions based on intuition alone,” said Ryan. “And that does not scale well.”

There’s a problem with the “growth-at-all-costs” mindset of many venture-backed companies, Rob points out. “Such heavily funded companies can get by with a poorer understanding of the KPIs that drive their business. Even though they operate inefficiently, they can continue to afford to burn lots of cash.” The key takeaway here is that founders mustbuild a fundamentally sound business first, Rob maintains. “Capital should amplify a great business, not create a temporary one.”

The Unfair Advantage of Technical DNA

Both Rob and Ryan studied computer science in college. They didn’t do coding or design work themselves once they launched their startup, “but we were very active and curious about how our team was developing our core systems,” said Rob, “and very involved in product design decisions.”

Ryan added: “Our background studying math and computer science caused us to take a pragmatic, analytical approach to decision making. I also think our technical background made us more relatable across our team. We always placed a high degree of value on technical roles, whereas some companies overvalue sales, for example.”

How involved were Rob and Ryan with their team? “We were very much ‘in the trenches’ understanding how our business was growing,” said Rob. “We were able to make effective decisions quickly. What changed over time as we scaled our business was the need to build a team that was also very entrenched in the technology aspects of our business, and to empower them to make decisions.”

The key lesson here for founders, both brothers agree, is that a deep understanding of your technology, product, and market is your most defensible asset. And having a team that also gets that is mandatory.

Scaling with Scarcity Breeds Creativity

Can a lack of resources help drive a founder to seek his or her own solutions? “We didn’t have a large enough engineering team to automate everything, so we would do a lot of tasks ad hoc,” said Rob. “One example was how we scheduled email campaigns to our opt-in email list. Because that list had grown into the millions, we couldn’t schedule one big email campaign because it would crash our email server. So, instead, for about a year in the early days, I had to break up email campaigns into a series of smaller campaigns and set an alarm to remember to check on them and start up new campaigns. This created a lot of interruption in my personal life – which basically didn’t exist! Eventually, we developed better email scheduling tools, but you do what it takes to grow – and we did.”

The brothers ran their startup – by this time named W3i, and later NativeX – with an intense focus on capital efficiency and a culture of ownership. “When others on the team see how you’re willing to accept certain hardships or personal sacrifices in growing your business,” Ryan noted, “it makes them more willing to take that on themselves. Our early team very much all had this founder mindset.”

The lesson for founders is this: Constraints can actually be a good thing. They force you to build a lean, resilient, and resourceful team.

Looking Through the Investor’s Lens: The Great North Ventures Thesis

When the Weber brothers look at a pitch now, they admit they must see past the flashy growth numbers to the underlying unit economics. “In nearly every first call,” said Rob, “I ask how much capital has been invested into the business to get to where they are now. It isn’t so much how much revenue they’re generating relative to what they’ve burned, but, rather, how much have they really accomplished with the capital that’s been invested?”

With their experience, they ask themselves: Is this a real business, or just a story the entrepreneur seeks to fuel with capital? “I once invested a small angel check into a startup that raised a Seed round pre-launch. I remember the startup burned through all the Seed capital and ultimately never even launched their product. This stuck with me. There are many ‘founders’ out there that, even if they were able to successfully raise a Seed round, still would not be able to organize a team to deliver a well-crafted product that solves a real problem.”

What smart investors like the Webers look for are founders who are obsessed with their business model and their unit economics, not just the funding they seek.

“A really good example of what we call ‘Seed-strapping’,” said Rob, “is our portfolio company WithMe, which began in Chicago, whose founder proudly admits he raised the least amount of capital necessary.”

Investing in Founder-Market Fit

How does Great North Ventures evaluate founding teams today? “I’m looking for founders who have uncovered a market tailwind that is being underutilized and, as such, have created the opportunity to solve a problem in a new way that wasn’t possible before,” said Rob. “Often, this is through the unleashing of an emerging technology where incumbents are slow to adopt.”

Rob goes on: “When Ryan and I were teenagers, in the mid-to-late ‘90s, Internet usage was exploding and, although there were many people in the world experimenting with web publishing, there was a huge imbalance. That is, the opportunity created by the rapid, widespread adoption of the Internet was far greater than the number of web publishers putting up new websites.”

Ryan adds: “Ideally, the founders we look at have been tinkering with whatever technology they plan to unleash so they have mastered the skills required to properly harness it within their business.”

Essentially, the Weber brothers back founders who have a unique, almost unfair, insight into the problem they’re solving. It’s the “Why you?” question.

“Typically, I see the unique insight coming from one of two areas: technology-driven or market-driven,” said Rob. “Founders who have mastered a new technology can often deploy their skills into any number of vertical markets, which can provide them an advantage over incumbents. Think back to the late ‘90s: no one at giant Walmart was going to take on Jeff Bezos when it came to pioneering in e-commerce, despite Bezos having no retail background. Market-driven insights can be very powerful, too, especially in more complex industries where problems are super obvious outside of the industry. When founders have a more market-driven insight but lack technical skills, that’s okay. But we strongly prefer they have a cofounder or early team member who has strong technical skills to complement them.”

Net-net, the brothers look for evidence that the founders are the only people in the world who can build this specific company.

Investing in Capital Efficiency

It’s helpful to look at how the Weber brothers view a startup’s request for capital. Just a number means little – it’s the strategic plan that matters.

“I’ve often seen that, even when startups are competing in the same market, how they deploy capital is frequently more important than the total capital raised,” said Rob. “I’ll give one example from our portfolio. We have a startup in our portfolio called Inhabitr, which was also originally founded in Chicago (but now in California). It provides an AI-powered platform for B2B furniture procurement. Around the time we led their Seed round, a handful of other competitors raised much larger early funding rounds. While Inhabitr invested in its core AI capabilities and chose to partner with others in the furniture retail space, their competitors invested heavy amounts of capital into developing their own inventory and warehouses. Over time, most of Inhabitr’s competitors significantly underperformed because of this poor deployment of capital.”

The Webers’ bootstrapping background gives then a keen eye for founders who will treat every dollar of investment with the same care they’d treat their own last dollar.

Thus, they look fora clear, credible plan for how their fund’s capital becomes a force multiplier for the founders’ existing resourcefulness.

“One thing we often see,” said Ryan, “is startups burning large amounts of capital to fund their unproven go-to-market strategy. A better approach is to deploy small amounts of capital in the early going to develop expertise in one, scalable market channel. Once they’ve mastered that channel, that’s the time to plow capital into it.”

Conclusion: The Best Founders Think Like Investors

The Webers believe, whether you’re bootstrapping or raising millions, the goal is the same: build a durable, valuable company. They know the best founders are always thinking about the long-term health and defensibility of their business.

What final piece of encouragement would Rob and Ryan add? They jointly advise: “Cultivate an unwavering focus on your customers and the problem you’re solving, and let that guide you in key decisions. The investment you make into systems that allow you to understand your customers at the most granular level will likely be your most profitable investment.”

If you’re a founder building with this mindset, and you’re a fit for Great North Ventures’ investment strategy, Rob and Ryan want to hear from you.

To learn more about Rob and Ryan Weber’s background, check out my prior post here.

———-

Note: This post first appeared on the Great North Ventures website, with my byline, and here’s my bio that appeared with it:

Graeme Thickins is a startup advisor and an investor in Great North Ventures Fund I. He is also an angel investor in two subsequent Great North portfolio companies. He has written previously for and about Great North Ventures and its founders over several years.

 

How Two Midwest VCs Have Mastered Success Through Multiple Tech Cycles

September 9, 2025 / / 1 Comment

For twin brothers Rob and Ryan Weber, founding partners of Great North Ventures in Minnesota, entrepreneurship began in college, just as the Internet was taking off in 1996. As computer science majors (and Rob later switching to entrepreneurial studies), they learned quickly that Internet traffic could be monetized. Over a few years, they built several websites that became profitable businesses before they even graduated.

headshots of Rob and Ryan Weber

Rob Weber (left) and Ryan Weber, Founding Partners of Great North Ventures.

They tell a favorite story. An LA company wanted to buy their business and flew them out. They’d never flown anywhere, and were too young to rent a car, so they brought along their mom, whom they introduced as their marketing consultant. But they decided not to sell. Why should they, when they were enjoying making lots of money, having come from humble beginnings? But their real passion was to continue building things no one else was doing. When the dot-com crash came in 2000, they were well positioned to weather the storm, having consolidated their businesses into a profitable entity that, being based in Minnesota, they playfully named Freeze.com.

This is the story of how they moved on from winning in that early tech cycle to master those that followed, and how they positioned themselves to win in what is now the biggest cycle of them all.

Investing in Others’ Ideas

In the early- to mid-2000s, not only were Rob and Ryan running their successful Freeze.com business, which grew to some 30 employees, but they soon became angel investors on the side, backing promising businesses they saw some of their peers starting. And that brought them rewards later when they realized exits from some of these investments. It was a harbinger of things to come, as they went on to became successful VCs in later years. (More on that soon.)

What happened just a few years after the dot-com era was the dawning of another huge cycle, driven of course by mobile technology — and most notably by the iPhone, beginning in 2007. The Webers’ business, which had by now adopted the name W3i, jumped on the opportunity to benefit from the explosion of opportunity that presented itself in mobile advertising.

Lessons Learned

Looking back, what did the Weber brothers learn from their experience in those first two tech cycles?

“In our high school to early college days, we spent 1996 to 2000 marketing our different websites, so that by the time we launched Freeze.com, we already had an in-depth understanding of how to grow an Internet publishing business efficiently,” said Rob. “While others were burning huge amounts of VC capital in the late ’90s, we were growing a bootstrapped publishing business built on a strong foundation. What really set us apart from other dot-com businesses at the time was our proprietary business intelligence system, which gave us a competitive advantage in optimizing traffic acquisition and site optimization, including proprietary A/B testing systems.”

“We were heavy users of performance data,” said Ryan. “We pushed the limits of data center capacity in the early 2000s, actually having to build out our own.” (Note: well before the cloud tech cycle.) “We ran thousands of experiments optimizing our website using A/B testing through our proprietary back-end publishing technology. That allowed us to dominate the category of free PC software versus other rivals for many years, leading to strong profitability. We built recommendation systems early-on using data we collected to optimize the performance of our website.”

Rob added: “When the dot-com bust occurred in 2000, the tide went out on thousands of VC-backed dot-com businesses. Those that survived and thrived were the ones that focused on iterating quickly and taking a very analytical approach to delivering efficient, lasting growth.” Freeze.com was indeed one of those.

Technology Was Paramount

Ryan Weber recounted lessons learned as the brothers built their expanded business, W3i, and leveraged the latest technology advances, including AI and ML (That business was later renamed NativeX.) “We recruited Dr. James Shanahan, a PhD in machine learning then affiliated with UC Berkeley. Under his guidance, we developed predictive advertising models that leveraged non-personally identifiable data we collected from our embedded SDK in popular iPhone and Google Play apps and games. Our prediction models were leveraged to increase conversion rates for our advertisers.”

NativeX’s ad tech allowed developers to make more money off their apps. For example, Sega was one gaming firm that partnered with NativeX to boost its mobile advertising revenue. “We operated in the mobile ad tech space,” said Rob. “There were hundreds of competitive companies. We had a successful exit — most didn’t. Applovin became one of the other big winners. Their team delivered incredibly high-performing AI models.”

Rob offers some insightful history in this regard. “Early on, Amazon performed extensive experimentation and A/B testing to optimize customer lifetime value. Unlike many competitors who focused on short-term profits, Amazon’s foundational ‘customer obsession’ and long-term perspective led it to make strategic bets on what would build loyalty and increase customer spending over time. This was similar to the system we built early on with Freeze.com. Obviously we didn’t achieve the scale of Amazon, but with a similar approach, we grew very fast and efficiently.”

In the early days of the App Store, which launched in 2008, the most common way to make money from an app was to charge for it, often 99 cents. “But just like with the web, over time it was the free apps that quickly went on to dominate the traffic on mobile,” said Rob. “And just like the Facebook games, which grew extremely quickly just prior to this time period, free-to-play games leveraging virtual currencies dominated the top-grossing charts in the App Store. We knew that not all popular free games and apps were great for driving demand for virtual currency, so we focused on creating a system to help games and apps that had poor monetization to make more money. Just like earlier when we focused on PC software categories that generated excessive amounts of traffic but that consumers were unwilling to pay for.”

Leveraging Some Heavyweight Experience

The Weber brothers never really needed outside investment as they grew their profitable businesses. But, in their journey to grow W3i / NativeX, they realized that taking some angel investment from certain key, longtime Silicon Valley tech execs, whom they had met, would bring value to their business. These investors became valuable advisors and mentors as the brothers expanded the business to 170 employees. They were successful operators who guided them at critical junctures. And they benefited when NativeX went on to be acquired in 2016.

“We also tapped the strength of the technology ecosystem here in our own state of Minnesota, in terms of managing and leading as a data-driven technology business,” said Ryan. This was as the mobile tech cycle was leading right into the cloud cycle. “We hired Andy Johnson as our CEO. Andy’s background as an executive at various companies gave him a front-row view of the world’s leading database marketing solutions and some of the organizational and business requirements to scale such a business, which was helpful to us for our digital advertising model.”

NativeX built the technology it needed and also leveraged other talent in the San Francisco Bay Area. With the aforementioned Dr. James Shanahan, an adjunct professor at Berkeley, Ryan said they were able to recruit top PhD students to work for them that were primarily looking to gain experience before commanding top market wages. The competition for this talent was fierce, Ryan recounts. “But the key was having a leader who was a competent mentor and coach. Shanahan was very personable, encouraging his team to be a part of the company and to fully engage in team-building activities. He knew the stakes were high and went out of his way to build and retain key talent. Also, Shanahan was active in the industry, striving to understand the state of the art. That included, extremely early-on, following advances in neural networks and their breakthrough uses of ‘deep learning’ – foundational research sparking massive interest in AI, which eventually led to LLMs – and seeking to figure out the trajectory and potential for our business.”

“At W3i, we had only built our A/B testing capabilities internally, and we outsourced multi-variable optimization to companies that had capabilities using statistical and machine-learning systems, including one that came out of MIT,” said Ryan. “But as we evolved to NativeX, we required high-capacity systems that could train offline models, using statistical and machine-learning in an ensemble approach, which could then be deployed to make decisions based on predictions in less than 200 milliseconds. With NativeX, we essentially built an intelligent ad server for determining the effectiveness of ads served towards a targeted outcome for the advertiser.”

While NativeX was reaching its full potential in May 2014, VentureBeat, a tech innovation news outlet, ranked the Webers’ company No. 6 on a list of the top-10 most effective monetization companies. Fast forward, in February 2016, Mobvista announced plans to acquire NativeX as part of its global expansion in a deal reported to have paid gross proceeds of about $25 million in cash.

Moving On to Their Next Big Act

After NativeX was acquired, the Webers made a significant transition in their careers. With their notable success as operators in the dot-com cycle and, later, in the mobile and cloud tech cycles now behind them, they took some time to think about their next move.

“Ryan and I had been successful angel investors for 10 years at that point, but we had never talked about launching a fund until a year after we sold NativeX,” said Rob. “We had seen a small number of new VC funds spring up, and we felt we could deliver more value to founders by sharing our operational knowledge with them. We knew the operational guidance provided by most VC funds was shallow, because most general partners had never scaled a business before and lacked perspective.”

Startup founders will invariably say they prefer VCs who are former operators. They know they’ve been in their shoes. They’re very aware the road is far from easy. Like them, operator VCs have clawed their way through the tough times, pitched endlessly, suffered all the turn-downs, built teams, and struggled to get to product-market fit. The Weber brothers were confident that founders wanted investors who not only get all that, but have actually lived through it.

So, in 2017, the brothers embarked on the launch of their first VC fund, which they initially called Great North Labs (later changed to Great North Ventures). They ultimately raised just under $24 million for that first fund.

Was that transition from operator to VC difficult? Did the idea of pitching investors rather than customers mark a radical change for them? “We were blessed to find early support from limited partners who knew about our success as founders and angel investors from our prior 15-plus years of history with startups,” said Rob.

Looking back, Rob said: “If you had walked into our office while we were growing our W3i / NativeX business, on the walls throughout there were LCD screens with the KPIs for our budget and the KPIs related to our business. We knew hour by hour exactly how we were doing. I miss that part of it, the real-time operating aspect. You don’t get that in an investment business. As a VC, you don’t control businesses, you just own small percentages of your portfolio companies. But when you’ve seen things work and not work, you do get to make suggestions. That’s the value with an operator-led fund such as ours. We’ve been there.”

Ryan added: “Yes, we certainly provide mentoring and coaching as an operator-led fund. We also have many supporters who have scaled businesses. So, we’re serious about actively helping our founders, either ourselves or by tapping our supporters who have the right domain expertise. In addition, we have relationships with local talent and international talent, and that includes full-time, fractional, and agency-type contractor relationships. We know at which stage it would make sense to put any of these in the seat.”

Looking for the Best Founders

So, how do the Weber brothers agree on deciding to invest in a given startup? What key things do they look for?

Says Ryan: “At Great North, we’re founder-first and economics-driven. We back gritty, insight-led teams solving urgent problems in large markets.”

Rob adds this: “Number one, I’d say we look for ‘blue ocean’. Have the founders identified a new market space, or a new approach to an existing market, and become a ‘one-of-one’ company with no meaningful direct substitutes? Number two, we look for customer acquisition advantage. Companies that have identified an efficient way to scale.”

What are some key traits these VC brothers look for in a founder before investing? That was an easy response for Rob: “We like those that demonstrate speed of execution early on.”

And he expanded: “Another value we look for in entrepreneurs is accountability. By that, I mean don’t be a victim. Don’t let people tell you no. I think you’ll see this pattern with successful entrepreneurs. They’re going from zero to one with or without you, and you’re either on the bus or you’re off. But they’re doing it. They’re not waiting for someone to decide if they can do it. They’re doing it.”

When Ryan is asked his take, he has even more to say: “Grit plus velocity. Founders who are relentlessly resourceful, ship and learn fast, and show consistent weekly progress. We look for founders that have a clear, data-backed thesis and a deep empathy for the user and their problems.”

Finally, Ryan said. “We look for ‘talent and selling magnetism.’ Can they recruit A-players and win customers and partners with crisp, metrics-driven storytelling.”

Early Success Leads to Fund II

Great North Fund I, closed in 2018 at just under $24 million, has 15 remaining portfolio companies and is fully deployed, except for limited follow-on investments. Fund I breakout companies in Fintech and Proptech have achieved scale, and continue to grow very quickly and capital efficiently, including Branch and WithMe.

With the Webers’ background in publishing optimization, Great North has even invested in certain Media Tech companies, such as Featured.com and Pear Commerce.

The success of Fund I led to Great North Ventures closing its Fund II in 2022, at a much larger total of $41 million, with many new limited partners participating. That fund is now invested in 27 companies to date, with approximately $15 million of its funds remaining to be deployed, including as follow-on investments.

Now the Great North Ventures team also has its sights on the launch of Fund III. Stay tuned!

The Biggest Big Tech Cycle of All Now in Full Swing

Today, it’s quite clear the era of AI innovation is here and rapidly taking hold. Great North Ventures is actively investing what it sees as the best opportunities, positioning the firm for even more success in its role as an experienced investment partner. Its latest investment themes have focused on vertical AI applications, fintech, proptech, and enterprise productivity.

What’s an example of these themes that Great North Ventures sees today? And what are some portfolio companies leveraging these themes? “I’ve heard others cite ‘SaaS-plus’ – but I call it embedded finance,” said Rob. “The Total Addressable Market for many vertical software companies can appear small but, through embedding financial products, the expansion revenue can exceed the expectations of most. We first saw this with one of our earlier angel investments, FieldNation. We are now seeing similar expansion opportunities in companies in our portfolio like HLRBO. We also like to invest in the infrastructure companies that are supporting this trend, such as Yardstik and LendAPI, both also in our Great North Ventures portfolio.”

Inspired By Break-Out Startups

When judging a VC firm, one of course looks at the growth of the companies in its portfolio. That growth has been impressive for the Webers. It’s also informative to ask these twin brothers what inspires them to further success – namely, what’s a favorite break-out startup that’s not in your portfolio?

“I admire what the founders of Sezzle have been able to build,” Rob said. “From our earliest conversations with them, when they were just starting, they were adamant the existing Buy-Now-Pay-Later companies like Affirm and AfterPay were not serving under-banked consumers well. They found there was an enormous opportunity to use AI and other available data to make better credit decisions.” (Note: Sezzle was founded in Minnesota in 2016, and was just ranked the second-fastest growing public company in the state, up from 18th fastest the prior year.)

Ryan cites another one: “I admire Brad Dwyer at Roboflow from Des Moines, Iowa. He’s the archetypal ‘builder.’ He learns by shipping, turns frontier tech into practical workflows, and iterates ruthlessly from real user pain. He’s also a community catalyst and talent magnet, consistently expanding the circle around the company. This is a Midwest breakout that reflects the traits we prize.”

Where Great North Ventures Goes From Here

A recent study by MIT found a 95% failure rate by enterprises trying new Generative AI tools. Yet startups are succeeding by creating visible wins in narrow workflows, then expanding. The same study finds a 67% success rate in full deployment.

“Think in terms of the last mile of AI,” Rob Weber contends. “In this GenAI mega cycle, the startups that deliver immediate value are going to win.”

The Weber brothers are quick to identify the unique value proposition of their planned Great North Ventures Fund III. It is based on their team having demonstrated a successful entrepreneurial and investing track record through past mega innovation cycles – dot-com, mobile, and cloud – which gives them the unique ability to attract the top startups and talent fueling today’s mega-cycle: Generative AI. “The largest gains businesses are seeing from GenAI,” according to Rob Weber, “are coming from startups that are solving narrowly focused problems and expanding outwards. We believe these are ideal conditions for a small, vertically focused VC fund.”

As they look to continue their investment from Fund II, and from the future Fund III, Rob and Ryan define their firm as operator-investors focused on Vertical AI and Embedded Finance — a pairing they believe will produce the most capital-efficient, defensible companies of the next cycle. The firm’s sweet spot is seed-stage teams turning frontier capability into practical, measurable outcomes, fast. Great North is active in real estate/proptech, financial services (banking, payments, lending, insurance), and media/advertising tech – areas with clear pain, measurable outcomes, and fast commercialization. The firm invests both in full-stack vertical apps and in infrastructure that lets those apps embed finance safely and quickly.

Bottom line, they say: “We back founders who can ship, prove, and compound – turning AI into workflow, and workflow into durable fintech economics.”

———-

Note: This post first appeared on the Great North Ventures website, with my byline, and here’s my bio that appeared with it:

Graeme Thickins is a startup advisor and an investor in Great North Ventures Fund I. He is also an angel investor in two subsequent Great North portfolio companies. He has written previously for and about Great North Ventures and its founders over several years.

The Big Exit: Can Minnesota Expect Another One Soon? Why or Why Not?

August 25, 2019 / / 0 Comments

(Note: This story originally appeared at Starting Up North. It has been updated to include one more Minnesota tech company that has reached a valuation of more than $1 billion, and another that almost did in 2014.)

Has all this talk about “unicorns” and billion-dollar exits got you down? Doggone it, Minnesota needs some, right? So we can tell our friends in other states, “No, really, we have an awesome startup scene here! We aren’t Flyover Land.” You tell them we have some hot startups going on – you just haven’t heard of them yet. “You just wait – we’ll show you!”

Well, when exactly will we do that? That’s the main question we raise here, as well as why do we want such big exits? And we have some great local leaders who were kind enough to weigh in and give me their take on the subject.

What is an “exit,” anyway? One of three things: it’s when a company sells, has an initial public offering (IPO)… or, um, goes out of business. We’re gonna skip that last one! And the IPO thing we’ll touch on only briefly. We’re mainly talking here about companies getting acquired — by another company (strategic buyer) or a private equity (PE) fund — for multiples of the amount of money that’s been invested in them.

Minnesota Does Okay

First of all, we do have many successful exits here in our state on a regular basis. Granted, not many at $1 billion-plus, at least not what we might consider recent startups — let’s say less than 10 years old. Frankly, there aren’t any here within that young age range that have yet had what we’re defining as a Big Exit. Nor might many people think there will be any, outside the medtech/healthcare sector. Here are seven examples of Minnesota billion-dollar-plus company transactions or valuations in recent times:

• Cray Research was just acquired a couple of months ago by HPE for $1.3 billion. It was founded in Minnesota, sure — but that was 40+ years ago, when Control Data gave Seymour Cray some money to go off on his own. (It still has a presence in our state, and I’m guessing its name is likely to remain on that big building adjacent to the Mall of America for some time.)

• Ceridian, which also still has a major presence in Minnesota, did an IPO in April 2018 that valued it at almost $3 billion. But, again, this is a company that was founded in our state almost 40 years ago as a unit of Control Data.

• ConvergeOne, based in Eagan MN, was acquired by CVC Capital Partners for $1.8 billion in a deal that closed in January 2019. It’s a global IT and managed service provider of collaboration solutions. Founded in 1993, it went public in February 2018 and has more than 2200 employees worldwide, including a few hundred in Minnesota.

• Ability Network, a healthcare company in Minneapolis, was acquired by Inovalon in March 2018 for $1.2 billion. It provides secure web and private networks for healthcare providers and was founded in Minnesota way back in 2000.

• SPS Commerce, a retail supply-chain SaaS company that traces its beginnings to 1987, went public in 2010 at a valuation of $131 million. It now has a market cap of $1.8 billion and employs 1200, more than a thousand of which are based in its downtown Minneapolis headquarters.

• Help Systems, a low-profile IT management company based in Eden Prairie founded in 1982, was valued at $1.2 billion when a private equity firm in Palo Alto CA acquired a controlling interest in 2018. The company has more than 700 employees, about half of which are in Minnesota and neighboring states.

• Proto Labs, based in Maple Plain, was founded in 1999. It grew rapidly, then went public in 2012 at a valuation of $371 million. It  achieved a market cap of $1 billion in early 2013 and has stayed solidly above that level since then, with a valuation most recently of about $2.5 billion.

But the fact remains: no Minnesota startup has achieved a billion-dollar exit or valuation in less than ten years from its founding. None has reached the “unicorn” status that’s been so vaunted in recent years. (Whether you believe that matters or not.)

However,  one came very, very close in late 2010. That’s when data-storage tech company Compellent was acquired by Dell for a cool $960 million. Yes, we will call that a biggie for Minnesota! It was founded in 2002, so it was a very fast eight years to get to the Big Exit. (And I’ve heard this one created up to three or four dozen millionaires. Not too shabby.)

Another Minnesota firm that almost reached the magical threshold was Digital River, based in Minnetonka. In 2014, it was acquired for $840 million by PE firm Siris Capital (NYC) and taken private.  It was one of the original Internet startups in our state and went public in 1998 at a valuation of $142 million. Its valuation today? That’s your guess.

But How Are Other Non-Coastal States Doing?

Let’s get envious now – and talk more recent acquisitions. Some of our fellow Midwestern states have major bragging rights over us when it comes to unicorn-level acuisitions of newer startups:

• Indianapolis’ ExactTarget was acquired by Salesforce for $2.5 billion in 2013. That acquisition has done, and continues to do, great things for that city and state.

• Ann Arbor’s Duo Security was acquired by Cisco for $2.35 billion in 2018. And, of course, the startup community there crowed about what that meant to them.

• Columbus Ohio’s CoverMyMeds was acquired by McKesson for $1.1 billion in 2017. This exit was the biggest in Ohio history.

• Chicago’s Clever Safe was acquired by IBM for $1.3 billion in 2015. It was one of the biggest exits in Chicago tech history and created 80 millionaires.

There have been billion-dollar exits in many other non-coastal cities and towns, too – Raleigh NC, Nashville TN, Lisle IL, and Boulder CO come to mind. You can read about many here, going back over the past decade or more.

Why Hasn’t Minnesota Had Many Billion-Dollar Exits Compared to Other States?

“We maybe have more than many think,” said Jeff Hinck, general partner at Rally Ventures, citing two of the Minnesota company transactions listed above. “And JAMF, which was acquired for a bit under, could sell for that today,” he noted. [PE firm Vista Equity Partners bought a controlling interest in the firm in 2017.] “Compared to the traditional powerhouse states like California, Massachusetts, New York – yes, (we’ve had) far less.” But he thinks we’re trailing other states by not that much. “The reason we have less big exits than some states is that we frankly have fewer startups. Austin, Boulder/Denver, and DC have far more startups, so far more exits. The startups-to-large-exit ratio is probably no different in Minnesota than in those cities — although it is versus those powerhouse states.”

Scott Burns, cofounder and CEO of Structural, sold his previous startup, GovDelivery, in 2016 to Vista Equity Partners (which has rolled it into Granicus). He has a take on why we don’t have more Big Exits: “Investors (here) sitting on a lot of upside are more likely to take an exit before the billion-dollar threshold. I do think we should take more credit for what we have, however. Look at SPS Commerce, which has somewhat quietly grown into a company with a $1.8B market cap.”

Michael Gorman, a managing director at Split Rock Partners, points out our state represents only about 1.5% of the U.S. population. “On most measures, we punch well above our weight based on the level of education, corporate depth, and so forth.” He brought up another local company to watch: “Bright Health has recently raised significant money — not yet an exit — at a healthy valuation, but I don’t know the exact figure.” That firm, plus the recently acquired JAMF, and the Minnesota billion-dollar exits we cite above “collectively still employ thousands of people in Minnesota and have generated great wealth and opportunity,” Gorman added.

So, Why Do We Want Big Exits?

I asked Justin Kaufenberg, cofounder and CEO of SportsEngine. His firm was acquired by NBC Sports in 2016 for an undisclosed – let’s just say “large” – amount: “It takes decades to build an ecosystem capable of growing unicorns,” he said. “You need a round of exits for first-time founders, who then go on to participate in the funding or building of the next round of companies. That second round then enjoys more seasoned founders and executives and more aggressive and patient investors.”

Similar comments came from VC Michael Gorman. [Note: his fund has been an investor in SPS and Help Systems.] “Great exits help reinforce the virtuous circle of innovation, whereby talent is developed, wealth is created, and the innovation capacity of the region is enhanced,” Gorman said. “When a company generates a great exit, it helps the immediate employee beneficiaries and creates additional financial freedom to pursue the next entrepreneurial impulse.”

What Do Other Midwestern States Have That We Don’t?

One M&A professional in Minneapolis had some pointed words in this regard. Rob Griggs is a regional VP for Seattle-based Corum Group, a 30-year old firm focused in sell-side M&A, primarily for small to mid-sized software firms, with more than 300 successful transactions to date. He gives tech-based M&A presentations multiple times per year in fourteen cities across the Midwest. In his previous life, Griggs raised significant funding for multiple startups. “My take is that, locally, we don’t have the focused approach that many of these communities have from universities, incubators, angel investors, successful entrepreneurs, and corporate VCs leveraging resources to build a thriving early-stage investment cycle. When you have even local government assisting, the returns, rewards, and community growth follows. Here, we just don’t have that approach, sadly, in my experience.”

Scott Burns offered a Midwestern example he’s familiar with: “Structural has an office in Indianapolis, so I spend a lot of time there. It had a terrific exit with ExactTarget building up there, executing a successful IPO, and then being sold to Salesforce for $2.5B… this infused a lot of capital and talent into the local tech ecosystem that’s led to a surge in tech startup activity and to a large Salesforce office in town, as well as satellite offices for other companies with headquarters elsewhere.”

Well, yeah, we could use some of that here!

Minnesota Angel Investors Stepping Up?

Are Minnesota founders who have had successful exits doing as much angel investing as their counterparts in other Midwestern cities?

“Not that I can see,” said Griggs. “The few I know pretty much leave town with their cash, more or less. They lose their appetite for risk once they get theirs, unfortunately. A few do a couple of deals, but I don’t see a strong mentor network, or aggressive angel network like I’ve seen in other parts of the country. Cincinnati and KC are very strong at local support.”

Scott Burns has a refreshingly different view. “I’ve seen a surge in founders with successful exits investing locally… putting money back into the community. I don’t have benchmark data to compare us to other communities, but I like the trend in the Twin Cities.”

There’s Something Crazy About Startup Funding These Days

Dave Dalvey, managing general partner at Brightstone Venture Capital, cites some startling figures. “We’re living in a capital marketplace with record high amounts of uninvested capital held by PE and VC funds looking for high-quality investments. The amount of capital raised and as-yet uninvested is referred to as ‘overhang’ or ‘dry powder’ in the industry. According to a recent report, the entire PE industry has more than $2 trillion in dry powder, with $1.2 trillion of this being held by PE buyout-style funds, and just over $400 billion in the hands of VC fund managers.” Most of this overhang lives in two geographic areas, he said, where the competition is particularly tight: the Bay Area and the New York/Boston corridor.

“History has proven that market environments where too much money is chasing too few deals is never a good thing for investors and their ultimate fund returns,” Dalvey continued. “Investors fearful of missing the next big deal throw everything they learned in business school about valuation out the window and buy into this trend towards unicorn pricing without much fundamental valuation support.”

All these competitive market factors, he said, “help build and feed the unicorns on the front end, and keep them fat and happy through the early years of their little unicorn lives — and even through their IPO years.” And he noted we’ve seen close to a dozen unicorn IPOs already in 2019. However, the number of IPOs overall is way down, so that route to an exit would appear to be unlikely for most.

Another surprising fact Dalvey cited, from the Pitchbook/NVCA Q2-2019 report: VC mega-deals (raises of $100 million or more) rose to 208 deals in 2018, or 44% of all deal volume. In 2013, there were just 36 mega-deals, or 13% of all deals. Yikes!

But Maybe We Shouldn’t Be Focusing on Unicorns and Billion-Dollar Exits

Joe Payne is the CEO of Code42. Previously, he led Eloqua to an IPO and, soon after, an acquisition by Oracle in 2013 for close to a billion dollars. “For starters, if you’re building a company, you’re not trying for a billion-dollar exit — you’re trying to build a great, lasting company with a billion-dollar valuation. It’s a subtle but important difference. Minnesota has plenty of billion-dollar companies across many industries that started as nothing and are now worth that kind of money. There is much to be proud of. What the state needs now is to replicate that historical success and apply it to technology companies.”

Another local player doesn’t pay much attention to all this billion-dollar talk. Cathy Connett, an angel investor and managing partner of Sofia Fund, said this: “We may not have had as many billion-dollar exits, but it’s important to look at exits generally in light of the amount of money raised to achieve those exits. First, you need to remove the ‘unicorns’ from the data set. Almost a third of the monies raised nationally in 2017 went into a few unicorns, which are driven largely by hype and are on the coasts. If you look at the data after the unicorns are removed, I think a big factor is our more efficient use of capital in Minnesota. Considering the money invested in Minnesota companies and the cash-on-cash return achieved on that money, you’ll find our companies perform on par, if not better, than other areas.”

Are Tech Company Valuations in Minnesota Simply Lower Than in Other Midwestern States?

“Not at all,” said SportsEngine’s Kaufenberg. “I don’t think there’s any real difference across the country right now. The best companies are all raising money in a fairly predictable and narrow band of valuation, and those deals are competitive.”

VC Michael Gorman agreed: “It’s not my experience that tech valuations in Minnesota are systematically lower. Strong teams and ideas have attracted capital at market rates here.”

I asked Kaufenberg if he’s seen any trend in the valuations of tech companies based in Minnesota. “There’s a lot of competition for the best companies,” he said. “Those growing at 300% in the early stage and 100% in the growth stage are having their valuations pushed up to historic levels. However, that next tier of companies can have a harder time, and valuations in that cohort feel as though they’ve actually come down across the country.”

Scott Burns had a comment in this regard: “We might get slightly lower valuations at the early stages, but even that fairly reflects the fact that we have fewer entrepreneurs with big exits in their past starting new ventures here.”

Will We Have More Billion-Dollar Exits in Minnesota in Coming Years?

Michael Gorman of Split Rock Partners believes so. “We will to the extent we have companies playing in very large markets, led by excellent teams, boasting tech that leads the category, and demonstrating extraordinary growth and/or substantial profitability.”

Jeff Hinck of Rally Ventures didn’t hesitate: “For sure – we have a couple that are already capable of that. We have a lot more that could be, and it will depend on execution and valuation environment at the time of the exit.”

A former VC who was just named head of the Minnesota High Tech Association (MHTA), Jeff Tollefson, had this to say: “While it would clearly benefit Minnesota’s economy to have more billion-dollar exits, I think we will see many more successful singles and doubles rather than big home runs, with exit values in the hundreds of millions, not a billion… Will we see more of those big exits? Absolutely. But I would much prefer seeing dozens of companies achieving nine-figure valuation exits each year and catalyzing future waves of entrepreneurial success in the process.”

Joe Payne, the CEO of Code42, also thinks we’ll have a number of winning companies with billion-dollar valuations. “There’s one mind-shift change that will help Minnesota companies be successful more quickly. Because technology is portable and doesn’t need to be ‘shipped’ in order to win, you must be the best in the world in your space. That’s a mind-shift change for many in the Twin Cities. You can’t be best in Minnesota or best in the Midwest — you have to set your sights higher. You have to be the best in the world.”

No denying Payne has ambitions. “Given our fantastic customers at Code42, our market-leading products, and our world-class team, we have a very good chance to be a billion-dollar company in the next few years.”

Something More Important Than Money?

I asked Jeff Hinck how equity should be structured in order for a big exit to truly have the impact we want in our community. He had this to say: “A sizable number of people should have equity, especially early employees who take more risk joining a startup. If someone does well in a startup, they’re more likely to start one themselves, join another, or recommend to friends asking if they should join startup to go for it. That said, I think more of the reward of being part of a startup is usually the atmosphere and culture of the good ones. It’s just more fun. And what’s better than having fun and being paid more for it?”

So, remember to add that three-letter word when you’re bragging to your friends about the quality-of-life in Minnesota – and that only gets magnified when you’re part of a great startup!

The question now is, are you working in one — or on one — yet?

Brad Feld On When to Quit Your Day Job

August 25, 2017 / / 0 Comments

(Note: This interview first appeared at MinneInno.com — “Your Source for Local Innovation” in  Minnesota: Innovation, Startups, and Tech.)

Brad Feld, one of the most admired VCs, talking at event

Brad Feld, coauthor, “Startup Opportunities: Know When to Quit Your Day Job”

Few VCs have the success record of Brad Feld of Foundry Group in Boulder, Colorado, and even fewer as many writing credits. That includes several best-selling books. Well, now he’s uncorked another title, this time with coauthor Sean Wise, the subtitle of which addresses that vexing question most every would-be entrepreneur faces: when do I know it’s time to go all in and quit my day job?

I first met Brad in 2007, the year I began attending a tech conference he helped launch in Denver called “Defrag.” (And I reported on it every year for 10 years.) That was also the year Brad cofounded Techstars, and I was lucky enough to sit next to him at dinner and get the download on those plans. I so tried to get Minneapolis to become one of the Techstars cities, but, alas, it wasn’t to be back then. Eventually, of course, the accelerator found its way to Minnesota as our startup community strengthened, launching Techstars+Target and smaller programs at Mayo Clinic and Land O Lakes. Also, after years of encouraging Brad and his partner Seth Levine to look at investing in Minnesota, Foundry Group led a Series A in a startup they discovered called LeadPages, and they continue to watch what’s happening here.

When I got a look at Brad’s new book, and loved it, I immediately wanted to know more.

Q: Brad, were you surprised this book so quickly hit the list of top five best-selling business books on Amazon?

Yes. While I was confident that it would be popular, especially at a discounted price for a short period of time, I was overwhelmed and excited by the number of people who grabbed a copy.

Q: The original version of the book was published in 2014. Why did you and your coauthor decide to publish a second edition?

The first edition was published by FG Press, a publishing company that my partners and I at Foundry Group started. FG Press wasn’t successful so we shut it down, but we were proud of “Startup Opportunities” as a book. I had previously (and am currently) publishing with Wiley. They were enthusiastic about doing a second edition of the book. We added a few chapters, cleaned stuff up, and had Chris Sacca write a foreword.

Q: While the title of book is somewhat bland, the subtitle — “Know When to Quit Your Day Job” — is certainly not. Tell us about that came about, and why.

My coauthor Sean came up with it. He is quick with a one-liner and often talked to his students about the key to starting a new business was to identify the right opportunity. He often said that “friends don’t let friends pursue bad opportunities,” and one day the line “Know When to Quit Your Day Job” popped out.

Q: You make it very clear the book is intended primarily for first-time entrepreneurs. But it’s no secret they have a hard time getting attention from VCs. Is the book your way of trying to help the many thousands you have to say “no” to? I’m of course alluding to your famous blog post in 2009, “Saying No In Less Than 60 Seconds.”

When I look at the hundreds of companies I’ve funded (well over 500 at this point), greater than 50% of them were started by first-time entrepreneurs. However, even if I’ve invested in 300 companies started by first-time entrepreneurs, I’ve probably said no to 10,000 or more. I often get asked for feedback after telling someone no. Given that volume, there is no way to give people deep feedback. So, I thought a book around Startup Opportunities would be helpful to be able to point at.

Q: Of all the things this book tries to teach entrepreneurs — the realities of doing a startup — what’s the one thing you find is the hardest for them to understand or accept?

That the idea is useless. Ideas are cheap. Ideas flow freely. Lots of people have the same idea at the very beginning. The idea is not what matters. It’s what you do with the idea that matters.

Q: Are millennial entrepreneurs different? What would you say about their expectations? Are they coachable?

I work with entrepreneurs born between 1950 and 2000. Everyone – each entrepreneur – is different. I wouldn’t categorize them by the generation they belong to.

Q: Why are early-stage investors so focused on “the team”?

It’s really hard to be a solo entrepreneur. Having a great, effective, and well-functioning founding team makes an enormous difference. And, the greatest killer of startups is team issues.

Q: Knowing you have, in fact, invested in first-time entrepreneurs in your day, have many of those been financial winners? And will you continue to invest in first-time entrepreneurs?

Yes and yes. Many of the successful companies that I’ve been an investor in have been started by first-timers. And, if you look at my last few investments, I think each of them has at least one first-time entrepreneur on the team.

Q: You’ve written or cowritten so many great books for entrepreneurs. How do you keep it up? Do you have a writing schedule? You’re also a prolific blogger. How many hours per week do you devote to writing?

I try to blog daily, but I go through phases where I need a break because I don’t feel like my writing is fresh. I’m in one of those modes now and have taken a few weeks off from blogging and am getting ready to start again. Regarding my books, I go through phases. I’ll have very productive periods where I can write for two or so hours a day. I then have long stretches, often many months, where I don’t work on any books. My general pace right now is about a book a year, but it’s lumpy. I don’t really segment my time carefully, so I don’t really know how much I write each week. And, I spent a ridiculous amount of time writing email – does that count?

Thanks, Brad. The new book is fantastic. Congratulations to you and your coauthor, Sean Wise. We’ll continue here in Minnesota to practice the things you recommend in another of your great books, “Startup Communities.”

SXSW Adding Great New Wrinkle for 2012: ‘Startup Village’

October 30, 2011 / / 0 Comments

StartupVillage-logoYou've likely heard of the "SXSW Accelerator," which has been a feature for several years at the huge, annual South By Southwest festival, held every March in Austin, Texas. Well, here's something new for 2012: SXSW has announced the creation of a home base for startups, VCs/investors, media, and other entrepreneurial-minded attendees to gather, mix, and mingle during the Interactive portion of the event. It's called SXSW Startup Village.

The 19th annual SXSW Interactive Festival takes place March 9-13, 2012. Startup Village will include the Accelerator program, targeted panels, meetups, lounges, and mentoring/coaching sessions, and will primarily be located on the fourth floor of the Austin Downtown Hilton, making it easy for the startup crowd to find the programming and networking opportunities most important to them.

Want to hang out with startups of the quality of Siri (which won the Accelerator's web category in 2010, then was acquired by Apple) and Hipmunk (the 2011 winner)? Then this is the place for you!  I'm sure planning to attend.

I spoke recently via Skype with Chris Valentine (photo), coordinator of the SXSW Startup Village, and asked him some questions.  ChrisValentine-croppedHow big is SXSW Interactive?  He told me about 10,000 people attended the last one. And he noted it has an "international scope."  How many startups applied to last year's SXSW Accelerator?  About 400 in various categories, and that was narrowed down to 40 who were invited to present at the event.  Who were the winners last year?  Here's a link announcing the seven winners in 2011, which includes two that were music-related (there's also an Accelerator program for the music portion of the festival, which follows the interactive event). For the 2012 Accelerator, Valentine said 56 companies will get to present, due the the fact that new categories have been added, including Mobile and Health.

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[Timeout for a Minnesota Connection: At last year's SXSW Accelerator, Minnesota gaming startup OONQR was a finalist in the Entertainment category. Cofounder and CEO Justin Peck told me that his company's SXSW experience "exceeded our expectations." He was impressed that the Accelerator program "made room for a tiny midwestern startup in their lineup of successful, well-established companies." He said their trip to Austin wouldn't have been possible without the two free tickets they got to SXSW as a result of being accepted to present at the Accelerator. "I'm glad to see they're expanding it. Startup Village sounds like promising addition to the program."]

UPDATE: Chris of course remembered the QONQR guys and spoke highly of their startup. Then I brought up how many Minnesotans have been attending SXSW Interactive for years — hundreds went last year. Many gang up in cars and drive down, and some even rent houses to save on accommodation expenses! Chris seemed surprised when I told him we have one of the largest interactive marketing communities in the entire country. The Minnesota Interactive Marketing Association (MIMA) has more than 1300 members and holds the largest annual event of its kind, right here in MInneapolis: the "MIMA Summit." It attracts more than 1000 attendees every fall. My coverage of the recent event, with my colleagues at Minnov8.com, is here, here, and here.

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SXSW_2012-logoThe SXSW people define the purpose of the new Startup Village as "uniting the startup, entrepreneur, and investor communities under one roof for focused programming and networking opportunities during SXSW Interactive."

Valentine explained: “Over the last few years, startups and the entrepreneurs who nurture them have become a vital part of the SXSW Interactive festival." He said SXSW wants these attendees to learn, network, and share their experiences, and to foster an environment of innovation and collaboration. "We’re magnifying that atmosphere by converging startup-specific programming, events, and the SXSW Accelerator program in one dedicated location.”

Startup Village panel programming will consist of discussions and workshops specifically designed to educate budding and current entrepreneurs on best practices and lessons learned. Startup Village will also feature mentoring/coaching sessions, lounge areas, and designated meetups for attendees to network with some of today’s up-and-coming startups, seasoned entrepreneurs, and investors.

The 2012 SXSW Accelerator competition kicks off its two-day Interactive showcase on Monday, March 12, while the SXSW Music Accelerator, which spotlights the latest in music technologies, takes place on Wednesday, March 14. For companies wishing to participate in the Accelerator program, applications are being accepted through November 18. To apply for the Interactive Accelerator, visit http://sxsw.com/interactive/accelerator/enter, and to apply for the Music Accelerator, visit http://sxsw.com/music/accelerator/enter.

Startup Village programming will be open to SXSW Interactive, Gold, and Platinum registrants. SXSW music registrants will be admitted to Startup Village programming and events on Tuesday, March 13, 2012. For more information, visit www.sxsw.com/interactive.

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