Someone new to the islands came up to me at the recent Startup Paradise Demo Day and said there are a lot of people in the tech community. Compared to 15 years ago, I think that is true. When you take snapshot views like this it becomes clear the tech community has grown considerably. The main difference in my mind is the number of young people (to me everyone looks young) that have joined the ranks. Programs like Blue Startups, XLR8UH and Energy Excelerator have done wonders to nurture the up and coming young entrepreneurs, something we did not have 15 years ago. For this fourth Demo Day, Blue Startups featured 5 companies from their recent co-hort: TipTop Health, Selly, Job Rangers, Sagely and Advlo. XLR8UH featured Diagenetix and Flywire. With Energy Excelerator, instead of company pitches, short interviews with the founders of Shifted Energy, Pono Home and Stem gave the audience a peek into the business operations after the accelerator program. To close out the program Energy Excelerator brought on stage three interns from Hawaii Pacific University and the RISE program who worked within the three energy companies. It's rare to see interns featured in a program but it worked well for this demo day. They were billed as the next generation of entrepreneur and the organizers did a good job of demonstrating the potential pathway from college into to startup. Although intuitively obvious, but not often well executed, having a continual pipeline of graduates looking to start new companies is key to a healthy ecosystem. It appears the concerted effort demonstrated at Startup Paradise shows the focus on nurturing this pipeline. It will be interesting to follow not only the companies graduating from the accelerator programs but also the accelerators themselves. Karl Fooks from the Hawaii Strategic Development Corporation told me that he is not seeking any funding from the 2015 Legislative session. Previous sessions helped fund LAVA and the Hi Growth Initiative. Chenoa Farnsworth, Managing Director of Blue Startups, said they have enough money to go another year. They received funding from LAVA and from founder Henk Rogers. To reach sustainability and to eliminate the need for public money, Blue Startups will need to cash in on their equity stakes in successful startups. So if this model is successful, we should see some of the graduating companies reaching a point of acquisition to trigger a liquidity event. To see this in the fourth year would be awesome but if they do seek public money to continue for a couple more years, I think it is well worth it. The momentum created with #StartupParadise needs to continue to grow and thrive.
Navy commits $30 million to Hawaii’s energy startup program The Navy’s Office of Naval Research (ONR), under the Asia Pacific Technology Education Program, announced today that it will invest $30M dollars in the Hawaii-based Energy Excelerator. The Energy Excelerator helps innovative energy startups succeed in Hawaii and the Asia Pacific region with non-dilutive funding, strategic relationships, and a vibrant ecosystem. The startup program has helped 17 energy companies bring technologies to market and raise follow-on funding of over $38M. The new Navy commitment triples the funding that the program operated with over the past 3 years, showing that they recognize the value of Hawaii as an ideal place for new energy innovation. The Energy Excelerator funds seed-stage and growth-stage startups with compelling energy solutions and immediate application in Hawaii. “Hawaii has the best economic conditions for launching a clean energy company on the planet. We have electricity prices that are quadruple the average on the U.S. mainland, we pioneered the most aggressive clean energy goals in the country because our government is very serious about getting off imported oil, and we already have a deep bench of renewable resources that we are looking to integrate more powerfully,” says Dawn Lippert, Senior Manager of the Energy Excelerator. The Energy Excelerator looks for technologies that can solve real-time problems such as managing renewables on the grid, integrating smart energy efficiency technologies, and reducing the use of oil in transportation. Once companies have proven their technologies and successfully delivered in Hawaii, they become very attractive to island nations in the Asia Pacific, as well as certain markets on the U.S. mainland. “The Energy Excelerator is unique in that they’re not afraid of hardware companies. They know what will succeed in these markets, and they’re very focused on helping companies win customers,” Patti Glaza, Principal of Arsenal Venture Partners. For seed-stage companies with a working prototype, the Energy Excelerator awards nondilutive funding up to $100,000 to develop and execute their go-to-market strategy, aided by a team of experienced mentors. For growth-stage companies with significant customer traction, the program awards up to $1M of grant funding for a project in Hawaii. Growth-stage projects require 50/50 cost-share with customer financing or private capital. “The Energy Excelerator was transformative for us,” says Michael Pfeffer, CEO of Ibis Networks. “We went from a cool technology with big aspirations to a company with angel investors, a differentiated value proposition, and real customers. It’s exciting to see ONR doubling down on this excellent program.” The Energy Excelerator is currently accepting applications for its next round. The program attracts hundreds of applicant companies, and selects less than 5% for funding.