By David Nicklaus
St. Louis Post-Dispatch
WWR Article Summary (tl;dr) As the founder of a very popular and successful accelerator in St. Louis called “Capital Innovators”, Judy Sindecuse is a woman who knows how to get things done. Twice a year, Capital Innovators chooses five or six startups, invests $50,000 in each and puts them through 12 weeks of mentoring and business development.
St. Louis Post-Dispatch
Judy Sindecuse hadn’t even heard of accelerator funds when she set out to create one.
All she knew was that some people wanted to invest in early-stage companies but didn’t know how, and that the St. Louis entrepreneurs she met were not quite ready to pitch their ideas to professional investors. A fund that put investors’ money behind the best ideas and mentored the founders, she figured, might close the gap.
When Sindecuse told a friend what she was trying to create, the friend informed her that a few groups around the country were doing the same thing. TechStars in Boulder, Colo., which called itself a technology accelerator fund, was one of the first.
Sindecuse raised $3 million and launched her own accelerator, Capital Innovators, in 2011. Five years later, it has raised an additional $8 million and invested in 64 companies that employ more than 600 people in the St. Louis area. Those companies have attracted $175 million from outside investors.
The TechStars model has now been widely emulated. More than 200 accelerator programs have been created nationwide, including four others in St. Louis — Prosper Capital, SixThirty, Yield Lab and Stadia Ventures.
Capital Innovators is a standout in that crowd. For three straight years it’s been among the top programs in the Seed Accelerator Rankings Project, which looks at various measures of success.
Last year, Capital Innovators was No. 4 for the amount of money its entrepreneurs have been able to raise and No. 1 for its survival rate. Sindecuse is particularly proud that all but one of her portfolio companies are still in business.
In Silicon Valley, that wouldn’t necessarily be considered a good thing. Entrepreneurs there are encouraged to “fail fast,” meaning to figure out quickly whether your business works and move on if it doesn’t.
That doesn’t fit with Sindecuse’s Midwestern sensibilities. “If we say we’re going to let a company go under and let investors take the losses, that to me is immoral,” she said. “My mantra is that failure is not an option. You have to pass the grit test, do whatever it takes to succeed, and I’m here to help you.
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So, what happens inside the accelerator? Twice a year, Capital Innovators chooses five or six startups, invests $50,000 in each and puts them through 12 weeks of mentoring and business development.
Grant Weber, founder of pet-treats maker Riley’s Organics, says that period “was about pushing boundaries.” Rather than patting him on the back for getting his product into grocery stores, he said, the mentors urged him to target specialty stores.
Weber was among the entrepreneurs making presentations at this week’s Capital Innovators Demo Day, a graduation ceremony of sorts. So was Bruce Wilkinson, founder of prescription software firm Ben Medica.
“The program helped shift us from product development to sales and growing the business more quickly,” Wilkinson said. “I’m not a sales person naturally.”
Meanwhile, Sindecuse is trying to expand Capital Innovators’ own capabilities. This year she launched a partnership with Maritz, the Fenton-based sales and marketing services giant, and she’s trying to convince other large companies that they can benefit from exposure to St. Louis’ startup scene.
She has encountered resistance, including from corporate managers who see startups as more threat than opportunity. But she doesn’t hear “no” well, and that’s a good thing. If Sindecuse hadn’t been persistent five years ago, a chunk of St. Louis’ startup scene wouldn’t be here today.