Based on the idea that the Sacramento region is “primed for success” in launching new businesses, but that entrepreneurs needed help in getting started, Mark Haney and Monique Brown founded a new business accelerator based in Rocklin—the Growth Factory. On March 10, Monique told a big crowd online at our Perspectives event what she is doing and how that might help cleantech entrepreneurs.
There were two parts to her story. First the Growth Factory puts on a serious 12-month long training and coaching program intended to take pre-seed companies from “Minimum Viable Product (MVP) to fundable traction” in a structured program. Their first cohort in October 2021 included 15 companies that first got 4 months of coaching and then began 16 weeks of classes. These 15 got over $500,000 in investment to propel them forward. Seventy-five companies applied, validating the notion that there are plenty of entrepreneurs here with good ideas that can become viable businesses with a little help. Applications for the next cohort are open now, with space available for 8-10 companies. The deadline to apply is April 15. The focus is on high-growth, tech-related, scalable companies and cleantech companies are welcomed. If you aren’t ready for this cycle, applications for Cohort 3 will open in September. If you are not accepted, apply again in a future round. Monique says there will be two application periods each year.
The second part of her story, and a big one, is the creation of a venture fund alongside the training program to invest in the most promising companies that complete the accelerator program. Growth Factory Ventures has raised $10 million from 99 accredited investors as limited partners. This is a huge step in the region because it is the kind of money that is hardest for entrepreneurs to get and it has come from a pool of small investors that had not previously been tapped. The idea is to use the fund to put $25-50K each into accelerator companies, giving them that crucial first funding that can get them to having a viable product and a solid business plan. Monique and her partner Rick Spencer in this venture fund have been careful to set realistic expectations for investors. They have been saying that this will be a long journey for these fledgling companies and it could be 7-10 years before returns are realized. Even with this note of caution, investor enthusiasm has been good. Founders of existing small companies have stepped up to participate and fund investors have been willing to make direct investments outside of the fund to companies in which they have a particular interest.
These initiatives go a long way to filling some gaps in our local startup ecosystem, creating the most intense training and coaching programs to date and coupling that program to a source of early-stage investment that brings in money from an untapped source. Previously, these kinds of opportunities were only available outside the region and resulted in young companies moving away to take advantage of them. Thanks to the Growth Factory, the region can more easily retain these rising stars and create a “virtual circle” that can stimulate the success of even more.
You can learn more about the Growth Factory and access an application to join the next cohort here. Monique’s complete talk is available on below.
ABOUT THE AUTHOR
Gary Simon is the Chair of CleanStart’s Board. A seasoned energy executive and entrepreneur with 45 years of experience in business, government, and non-profits.