City, Investment Company, University Partner On Startup Accelerator
In a public-private partnership, officials from the city of Long Beach, Cal State Long Beach's Institute for Innovation & Entrepreneurship, and investment company Sunstone Management are preparing to deploy the Long Beach Accelerator for startups later this year.
The city of Long Beach, Cal State Long Beach’s (CSULB) Institute for Innovation & Entrepreneurship and investment company Sunstone Management will further formalize a public-private partnership and activate the Long Beach Accelerator, aimed at connecting fledgling tech companies to the resources, expertise and capital they need to mature. Among the takeaways from the plan, announced April 18 at the Regional Economic Forum:
• The city’s Economic Development Blueprint was an early harbinger. Aimed at fostering business development, lucrative jobs and increased standards of living, the 2017 10-year plan demonstrated that in business assistance, merging industries and economic cooperation opportunities, “providing resources in what we call ‘ecosystem support’ for tech-related companies was an area of opportunity,” Economic Development Director John Keisler told Techwire.
One of three focus areas for CSULB’s Institute, formed in July 2017, is city partnerships. The Blueprint, its Director Wade Martin said, underscored “that you really create a stable and vibrant economy from the bottom up.” A strategy of courting large employers with incentives, he said, “generally does not pay off for the community.”
Investing in startups stoked a desire at Sunstone to do more. The company’s earlier consideration of starting an incubator led to talks with Keisler and Martin and, instead, to collaboration on the Accelerator, said Sunstone founding partner John Shen.
• The city will leverage its relationships across sectors including tech and entrepreneurial, and connections with policymakers. (In a partnership with Long Beach City College and co-working community Blankspaces, the city will also open the Shaun Lumachi Innovation Center this July, a “state-of-the-art hub" for even newer groups and startups.)
The Institute will deliver its expertise in entrepreneurship; and CSULB has the network connections and assistance to ensure that the program is appropriately targeted. Sunstone will house the Accelerator in roughly 3,000 square feet, further expandable, at its Long Beach World Trade Center offices downtown. All three partners will help choose the Accelerator’s board of directors, and equally divide 2019 operational costs, estimated at $200,000-$250,000. And Sunstone is on track to have $1 million or more in venture capital lined up for potential investment by the time the first cohort arrives.
“While they’re in the program and, more importantly, upon graduation, they can easily access capital from the angel and venture capital community,” Shen said.
• The Accelerator is aimed at helping startups plot and take their next steps. Services could include technical assistance and training, long-term planning, pitch development and rehearsal, and access to capital.
• The Accelerator should be up and running around summer’s end. Officials would like to have the board in place by late July, potentially announcing the first cohort in August or September, Martin said. The partners are seeking prospective board members “with sector-specific information” and the connections to bring out investors on pitch days.
“We want to make sure that how everything is structured, it’s structured to support the success and enhance the success of the startups we bring in,” Martin said. The application process likely won’t open until sometime this summer, but Keisler said the partners have had daily contact from interested parties. Shen said feedback has been “tremendous” despite zero marketing to date, with one startup inquiring from Japan.