Dawn LeBlanc, Managing Director, Hartford InsurTech Hub
Updated: April 20, 2020
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.
By Sean Teehan
Hartford has seen a number of startup accelerators launch downtown in recent years, relying on in-person collaborations 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 buildings amid strict social-distancing requirements.
Startup CEOs participating in Hartford’s accelerator programs related to insurance, health care and manufacturing, 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 advisor to multiple startup accelerators. “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 Accelerator, 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 burgeoning companies to success and connect them with investors.
After returning home amid coronavirus 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 sessions, since their time zones differ from the U.S. East Coast, said Dawn LeBlanc, the accelerator’s managing 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 investment per company. “This year we’ll be lucky if anyone leaves with any additional investment.”
Douglas Ver Mulm, CEO, Stable Insurance Inc.
Douglas Ver Mulm, a member of InsurTech Hub’s current cohort and CEO of Brooklyn-based startup Stable Insurance Inc., said the seemingly reduced appetite among possible 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.”
Claudia Reuter, Stanley+Techstars Accelerator
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 program in Hartford run by Stanley and Colorado-based accelerator Techstars. That’s because Techstars invests up to $120,000 in each startup that participates in about 50 accelerators the company runs worldwide each year.
Social entrepreneurship
The all-digital approach does disrupt the camaraderie company founders 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 company whose hardware and software monitors assisted-living residents.
That problem goes beyond missing out on socializing and making friends with like-minded individuals, Pollock said.
A lot of innovation comes from spontaneous 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.”
Shana Schlossberg, CEO and Founder, Upward
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 opportunities 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 accelerators.
“I think that if we’re looking 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-person 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.”
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