The Colorado Springs-based Exponential Impact accelerator for startup technology businesses has received a $750,000 federal grant to extend its program from 12 weeks to two years.
The grant from the U.S. Economic Development Administration will help companies prepare to raise up to $5 million in venture capital funding, said Exponential Impact CEO Hannah Parsons. The grant also will be used to hire an entrepreneur-in-residence to help companies ready their technologies for market, she said.
“This award is a game changer for XI (Exponential Impact) and entrepreneurship in southern Colorado,” Parsons said in a news release. The accelerator “has experienced tremendous success in our first year with our flagship program. The investment from the EDA will enable us to expand programs to serve later stage entrepreneurs and increase venture funding in the region.”
Exponential Impact brought four startups to Colorado Springs for 12 weeks this summer to further develop their technology, investor pitches, operations and management. The four companies specialize in improving the security and transparency of the agricultural industry, verify regulatory compliance in a variety of industries and get better feedback from customers and employers.
The accelerator plans to offer the program annually to startups developing products and services using cybersecurity, blockchain and artificial intelligence technologies in exchange for a small ownership stake — 4 percent to 7 percent — by a $1 million fund affiliated with Exponential Impact. The program will be offered next summer in space about to be built in the National Cybersecurity Center.
Parsons said she hopes to have the entrepreneur on staff by April and add second- and third-stage programs by the time the accelerator’s next group of companies finishes the 12-week program in September. The six-month second stage includes mentoring to help companies launch operations and prepare to raise $1 million. The yearlong third stage includes higher-level mentoring and professional services such as accounting to get the companies ready to raise $5 million in venture funding.
Exponential Impact also will use part of the grant to hire a part-time workforce director. That staff member would help create an apprenticeship program that would start late next year to provide accounting, software development and other help to its companies, Parsons said. The accelerator expects to attract about 20 participants in the apprenticeship program within three years.
The grant also includes local matching funds totaling $918,000 that Parsons has raised. Exponential Impact told the agency it wants to support 45 companies in the second-stage program, called Amplify, and 27 companies in its third-stage program, called Ascend, by 2022. Those companies would employ 610 people, the accelerator said in its grant application.
The grant is one of 40 totaling $21 million made by the agency under its Regional Innovation Strategies program, including a $519,956 award to the State Board for Community Colleges and Occupational Education. The board plans to use the grant to launch the Southern Colorado Innovation Link, which includes more than 20 organizations that want to help incubate and grow innovative ideas, products and businesses in southern Colorado.
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