Ready, Set, Accelerate: Inside The eFactory’s Accelerator Program
The eFactory’s accelerator program at Missouri State University has changed the landscape of local entrepreneurship and established Springfield as a presence in the national startup scene. With two cohorts now through the program and a third in the works, the impact has only just begun.
Brian Kincaid, director of The eFactory, welcomes visiting entrepreneurs and gives them a tour of the facility.
If The eFactory is the engine that drives Springfield’s nationally recognized entrepreneurial culture, then its accelerator program is the spark plug. The program recently graduated its second cohort and has plans for a third next May. The tally so far: a total of nine new businesses in less than six months that are now navigating the community on their own as independent companies.
It’s been a pedal-to-the-metal first year for the program, which plays an important part in Springfield’s burgeoning entrepreneurial scene. Since 2013 Springfield has earned accolades from notable publications for its support of businesses—particularly startups.
“The accelerator is one component of the overall ecosystem here,” says Allen Kunkel, director of the Jordan Valley Innovation Center, which along with The eFactory and Brick City make up Missouri State University’s IDEA Commons in downtown Springfield. “There’s a lot of recognition around our startups, and they’re part of that equation,” says Kunkel, who is also associate vice president of research and economic development for the university.
—Allen Kunkel, Director of the Jordan Valley Innovation Center
In true 417-land fashion, the accelerator has been a collaborative effort. It’s backed by a funding partnership that includes the Missouri State University Foundation; RMI, which is a 504-loan program lender; the Springfield Business Development Corp., the economic development arm of the Springfield Area Chamber of Commerce; and the Missouri Technical Corp., a public-private partnership created by the Missouri General Assembly. And although the concept of an accelerator is not new, the structure of this one is unique. In
exchange for $30,000 in startup capital per company, The eFactory’s accelerator takes an 8 percent equity position in the business, to be repaid upon the company’s sale or liquidity event. It’s a long-term strategy that carries no real time frame, Kunkel says. So far, the nearly $300,000 in total investment is promising, with Eagle Speak, a company in the first cohort, already having taken on meaningful follow-up funding, and a handful of other startups from the program setting up offices outside of The eFactory.
Bernitha Medford of ShopZeely presents during demo day, an opportunity for startups in the accelerator to share their progress with the community throughout the program.
This community-partnership angle is key to the accelerator’s success, says Rachel Anderson, entrepreneurial specialist at The eFactory. “It’s unique to have so many partners and businesses helping these businesses to succeed,” Anderson says. Professionals at local companies, including big-name CEOs, have provided advice and mentorship, given feedback to practice pitches and looked over financial statements and business plans for the accelerator’s first two cohorts. Additional partnerships with the regional GO CAPS program for high school students studying IT and business, as well as MSU’s departments of business and engineering, have provided resources for accelerator participants and experience for the students who could very well make up the next wave of 417-land entrepreneurs.
But, in the end, the goal for the accelerator is a sustainable shot in the arm for economic development in Springfield. “It’s big for entrepreneurs from Springfield that they can stay and start a business here or move back,” Anderson says.
The Springfield Area Chamber of Commerce, which has made talent attraction and retention a major goal, agrees. “The accelerator program has been able to show both local startups and startups around the nation our community is supportive of new businesses and has created the environment to support such endeavors,” says Danny Perches, business assistance coordinator for the chamber.
Michael Onaolapo, CEO of ShopZeely, a startup that participated in the accelerator’s first cohort, is one such talent. ShopZeely could be described as Uber for shopping, where on-demand “Zeelys” shop for other users via a live video app. Onaolapo moved to Springfield from Texas solely to participate in the accelerator, one of several he applied for. He says the financial terms and Springfield’s size were deciding factors. Now, nearly a year later, Onaolapo and ShopZeely are still in Springfield, have expanded into the Dallas-Fort Worth area and are eyeing the St. Louis and Kansas City markets.
“[Springfield] not being extremely large but fairly decently sized allowed us to test our prototype, get some traction and really work out the kinks of our operations so we can expand to larger cities,” Onaolapo says.
The accelerator wants to continue helping these budding businesses, but faced with state-level higher-education budget cuts, the model is changing slightly. Only one cohort will be held each year, but the number of businesses in each will increase. The application period for the third cohort—to include as many as 10 businesses—opens December 1, and the three-month program begins May 2018. Changes from the first two cohorts include earlier deadlines for business plans and additional benchmarking.
The eFactory Director Brian Kincaid says ROI and profitability of accelerator-sponsored businesses, while necessary in the long term, will be only one of the metrics used to assess impact. Just as important are long-term lessons learned, which can lead to success the next time the entrepreneur has an idea. “Many, many entrepreneurs who have failed have, eventually, been successful,” Kincaid says. “The key is fitting that success into a shorter time frame.”
Headlines for the Heartland
In recent years, 417-land and The eFactory have received several nods both regionally and nationally for their entrepreneurial spirit.
The eFactory was named the 2013 Community/Redevelopment Project of the Year at the Governor’s Conference on Economic Development.
Trade & Industry Development magazine selected The eFactory as one of its Corporate Investment and Community Impact (CiCi) award winners in the community impact category.
Springfield ranked No. 3, among the country’s largest 150 cities, in WalletHub’s Best Cities to Start a Business list.
Accolades poured in for 417-land last year. Five Thirty Eight reported Springfield was fourth on a list of metropolitan areas with the fastest startup growth. The Queen City jumped up 14 spots to No. 53 among the country’s Best-Performing Large Cities in a report published by the Milken Institute. Although Springfield dropped five spots to No. 8, it still remained within the top 10 on WalletHub’s 2016 Best Large Cities to Start a Business.
Contributors at Entrepreneur and Forbes took note of 417-land. The eFactory’s accelerator was the only Midwest program on an Entrepreneur list of seven business incubators. Springfield topped Forbes’ list of Cities You Didn’t Expect to be Great for Business.