Hartford Business Journal

www.HartfordBusiness.com • April 20, 2020 • Hartford Business Journal 13 By Sean Teehan steehan@hartfordbusiness.com H artford has seen a num- ber of startup accelera- tors launch downtown in recent years, relying on in-person collabora- tions and co-working space to connect nascent companies with new ideas, talent and potential funders. However, the industry's business model of face-to-face interaction and collaboration has been upended by the coronavirus pandemic, which has closed many businesses and office build- ings amid strict social-distancing requirements. Startup CEOs participating in Hart- ford's accelerator programs related to insurance, health care and manu- facturing, have largely moved back to their home cities or countries, and are attending meetings and seminars online, rather than in-person. Some in the industry say the coronavirus- related shift to remote learning and collaboration could change how some accelerators operate long term. Changes could be both positive and negative. A greater shift toward all-online accelerators would reduce program overhead costs and make them more accessible to people in faraway countries, but it could also diminish startups' ability to meet with and pitch investors and other like-minded entrepreneurs, which is a key part of the creative process. "After [accelerators] reduce the cost of having an office space and all of the other overhead you have, … I think there's some that won't go back," said Tristan Pollock, partner in early stage venture fund and accelerator 500 Startups, and ad- visor to multiple startup accelera- tors. "I think the biggest drawback is how do you continue to build really strong relationships?" Organizations like Upward, reSET, Stanley Black & Decker's Stanley+Techstars Accelera- tor, and Startupbootcamp's Hartford InsurTech Hub and Digital Health CT, all currently operate programs that bring entrepreneurs from across the globe to Hartford. These startup founders work with each other and mentors who can guide their bur- geoning companies to success and connect them with investors. After returning home amid coro- navirus fears, some founders of the 11 startups participating in Hartford InsurTech Hub's current cohort have been changing sleeping patterns in order to participate in remote ses- sions, since their time zones differ from the U.S. East Coast, said Dawn LeBlanc, the ac- celerator's man- aging director. The program is one of more than 20 accelerators London-based Startupbootcamp puts on across the globe, and the online format has proven useful, but has its limits, LeBlanc said, noting that this is usually the 12- week program's "investor month." "[Investors] are not as anxious to invest as they used to be," LeBlanc said, noting last year's cohort scored an average of $3.1 million in invest- ment per company. "This year we'll be lucky if anyone leaves with any additional investment." Douglas Ver Mulm, a member of InsurTech Hub's current cohort and CEO of Brooklyn-based startup Stable Insurance Inc., said the seem- ingly reduced appetite among pos- sible investors to sink money into a new venture is daunting. Ver Mulm, whose company provides car insurance to rideshare drivers and plans to open an office in Hartford, still said he's getting valuable insights and information through the program in its online format, but prospective investors want to look you in the eye. "Investors are trying to come up with ways to get around that and build that trust," Ver Mulm said. "I think it's still too early to tell if this is going to be a long-term problem that we have." The challenges of playing match- maker between startups and investors in an all-digital format isn't as big of a problem for Stanley+Techstars, said Claudia Reuter, who oversees the pro- gram in Hartford run by Stanley and Colorado-based accelerator Techstars. That's because Techstars invests up to $120,000 in each startup that par- ticipates in about 50 accelerators the company runs worldwide each year. Social entrepreneurship The all-digital approach does dis- rupt the camaraderie company found- ers develop with each other over time, said Reinout Engleberts, a participant in Upward Labs' most recent cohort (which held its demo day online this month), and CEO and co-founder of Sensara, a Netherlands-based com- pany whose hardware and software monitors assisted-living residents. That problem goes beyond missing out on socializ- ing and making friends with like- minded individu- als, Pollock said. A lot of in- novation comes from spontane- ous interaction. "You're not able to riff, to turn around and talk to somebody at another desk," Pollock said. "I think that's going to be the hardest part." Upward Labs' new startup cohort focused on age-tech and building-tech products is scheduled to start May 18, said Shana Schlossberg, CEO and founder of co-working space Upward in Hartford, which oversees Upward Labs. Schlossberg said things have run smoothly online, and she expects the new cohort will see more, not fewer op- portunities to woo investors, since their technologies are relevant to problems exacerbated by the pandemic. However, she doesn't think the current crisis will cause a broad shift to online-only ac- celerators. "I think that if we're look- ing at a society where no one stands beside each other you can say goodbye to … everything," Schlossberg said. Pollock, the accelerator advisor, said he doesn't think the pandemic will eliminate in-per- son accelerators altogether, but it might lead to some going digital-only. When he informally polled a handful of startup-accelerator operators, about a third said they were strongly considering a permanent change to a strictly online program. "It's becoming more commonplace," Pollock said, adding that he thinks there is more to be gained than lost in increasing the use of online tools in startup accelerator programs. "I think it's going to be a net positive." Digital Disruption Hartford's startup accelerators adopt online-only approach as members worry about fundraising crunch Upward Labs' second cohort of 10 startups this month pitched their age-tech and prop-tech technology to 100-plus virtual attendees from the healthcare, real estate and venture capital industries during a virtual demo day. Dawn LeBlanc, Managing Director, Hartford InsurTech Hub Douglas Ver Mulm, CEO, Stable Insurance Inc. Claudia Reuter, Stanley+Techstars Accelerator Shana Schlossberg, CEO and Founder, Upward "After [accelerators] reduce the cost of having an office space and all of the other overhead you have, … I think there's some that won't go back." Tristan Pollock , Partner, 500 Startups

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