"Put Your Money Where Your Town Is"
"Put Your Money Where Your Town Is"
by: Steve Hayton |
November 8, 2022|
Monique Brown, Mark Haney, and Rick Spencer are the team behind the Growth Factory in Sacramento, CA. This team has helped 26 startups since launching their accelerator. And to date, they’re one of the most successful accelerators. They credit this to what they call the ‘backyard advantage’. I recently spoke with them about how they structured their accelerator to get incredible startups to join it and get incredible returns in the early days of their program. Here’s how they did it –
They initially began by activating local, high-net-worth individuals, corporate business leaders, civic leaders, and community leaders around the most promising founders to build a successful ecosystem. To date, Growth Factory has 99 LPs in their fund, which is the max under SEC regulations with 70% of those being new to the asset class.
Brown said: “This is critical for communities like ours to engage and educate these high-net-worth individuals because if they learn, have fun, and succeed as they support our startup founders today, they are potential future fund managers. They may invest in our next fund. And getting that capital off the sidelines is a huge component to ecosystem building.”
In the early days, before formalizing the Growth Factory, the three were helping startups grow. What they learned from this experience was that if they had the additional capital-building capacity and better, stronger communities, founders would be able to succeed even faster and without all the battles, scars, stress, and anxiety.
As a result, the trio formed Growth Factory and focussed their energy on founders with, as Brown said; “an unwavering commitment to seeing things through despite all of the many challenges that inevitably surface along the way”.
The impact-oriented accelerator has a huge passion both for the region and for entrepreneurs. Its community is its source of power, and as a somewhat skeptical Spencerfound out, love is a core competence of this success.
“I come from a multinational business building background. And so when I first connected with Mark, he talked about his mission of having business partners in his backyard who love one another. And I thought that sounded romantic and not like a business strategy. And then, as you know, I dug in. I saw that actually love was this x-factor for community building,” said Spencer.
As this love for their community and what they do grows, more and more founders and mentors are coming to the Growth Factory seeking to be a part of the backyard advantage. It has meant that the trio is now starting to think about what the future might hold.
“I think what we’re really excited about is this blueprint of the backyard advantage, not just working in Sacramento, but becoming something that can help other regions and other ecosystems.”
Brown and Spencer are now spending most of their time thinking about the terms they’re offering startups. This is the key to the success of the Growth Factory, with a keen focus on community, this accelerator is deadset on providing a quality experience to its founders. That’s proven when the trio talks to their founders about the value they’re getting;
They’ve found that accelerator terms are changing all the time and with some of the more mainstream accelerator programs offering up to $500,000 for a 7% equity share. Spencer believes the answer, for the Growth Factory at least, lies within the backyard advantage. Spencer has been able to draw comparisons between the Growth Factory program and other programs because they have founders that have experienced both firsthand.
“And so we’ve asked them to compare, how is this experience with that experience? And they talk about the backyard advantage like, look, I can go through Y combinator, it’s a great network, but also it’s become such a large ecosystem that it’s hard to have these relationships that can really move the needle. Yes, I’ll find capital. Yes, I’ll find some mentorship, but if I had a community that really loved the success of this region and would invest in me through customers and capital and advice and mentorship, then that, I think, will give me an advantage.”
“They’re looking at intangibles like energy, love, feeling supported, more confident, and also empowered. These kinds of things are the things that cause them to come back and say, this is making a difference in my business because I believe in myself because you believe in me. And we really do.”
Growth Factory and currently offering startups up to $100K for 3-5%, alongside a 12-month program and an incredible network.
The Growth Factory Accelerator is a nonprofit pre-seed accelerator and accompanying venture fund, on a mission to scale truly great companies in the Greater Sacramento region. Their goal is to help founders rapidly move from MVP toward product-market fit positioning them to raise funds and achieve an ARR of $1M within 3-5 years.
Founders apply to be accepted into a small cohort that receives 12 months of structured support. Each team begins by creating a customized action plan and is paired with a lead mentor who will serve as an accountability and thought partner throughout the program.
Workshops, founder forums, and office hours accelerate learning, connect founders with experts and resources, and provide community. Founders also participate in curated local pilot projects to support in testing their hypothesis, developing case studies, and building relationships with potential customers.
Fall, Spring, Winter
4465 Granite Drive, Rocklin, California 95677