Two weeks ago N.J.-based investor and software engineer Ken Kay, who is well-known in the angel community as a founder of Jumpstart NJ Angel Network, announced he is launching N.J.’s first tech startup accelerator, Ecelerator. It will be located somewhere in the Newark or Hoboken area. The twist: Ecelerator will focus on business-to-business (B2B) startup opportunities.
Tech accelerators take very early-stage companies, provide them an office space and connect them with seasoned mentors, corporate executives, angel investors and venture capitalists, helping them grow while learning through a network of built-in contacts. Kay says Ecelerator will be modeled after the programs Y Combinator and TechStars. Through a three-month residency program, early-stage companies can hone their business skills and gain guidance from experts in the field.
“Our concept is to bring the corporate people into the same room as the tech entrepreneurs and get them solving problems that are enterprise-oriented. I think a B2B accelerator plays to the strengths we have here in N.J. I’ve reached out to the corporate community: Merck & Co. (Whitehouse Station), Dow Jones & Co. (New York), Johnson & Johnson (New Brunswick) and other key leaders. They are all very enthusiastic about this concept,” he reports.
Kay says it’s really not in the culture of large corporations to innovate in the way that tech startups do, but they really want to tap into that creative energy. “They are too busy keeping up with their basic infrastructure to innovate inside or through their vendor network. I really believe they need a third party to help them do that and move their technology along.”
Right now funding for the B2B accelerator will be provided by angel investors and VCs who are interested in early-stage companies. Kay has also applied to be a part of the New Jersey Economic Development Authority (EDA) Edison Innovative Tech Accelerator Initiative. If that money comes through, it will also help fund the fledgling companies. He believes his concept is unique. “I’ve talked to a lot of people about this, including universities, venture capitalists and angel groups, and no one is moving in this direction except me,” he says.
Ecelerator will provide funding to startup teams of up to three founders, one of whom must be a software developer. Each team will receive $6,000 per founder and $7,000 per company. Ecelerator will receive an initial six percent equity interest in each company. The company isn’t limiting entrepreneurs to homegrown N.J. residents, welcoming anyone to apply. Kay is currently looking for both founders and mentors for the first “class” that will be launching in the spring.
Besides Kay, the Ecelerator team includes senior advisor Safa Sadeghpour, senior engagement manager at McKinsey & Co. (New York); Joan Smith, of Artspan.com (Lambertville, N.J.) as marketing director; Aaron Price, founder of NJ Tech Meetup; and Yiannis Kourakis, executive board member at the MIT Enterprise Forum of New York City. Among the advisors to the organization are David Sorin, co-managing partner of SorinRoyerCooper LLC (East Brunswick); Mel Biada, who started Bluestone Software and is now with BaseCamp Ventures ; Scott Case, a founding CTO of Priceline.com; Steve Sashihara, CEO of Princeton Consultants; and Maxine Ballen, founder and CEO of the New Jersey Technology Council.
Kay says he got the idea for Ecelerator after visiting an entrepreneur at DreamIt Ventures (Philadelphia). He began speaking to colleagues about the idea of launching an accelerator like DreamIt in N.J. to energize startup activity in the state.
To help publicize Ecelerator and make B2B entrepreneurs aware of its existence, Kay, along with others, put together an evening panel discussion in New York on Sept. 27. The event featured speakers from three verticals, healthcare IT, financial services and enterprise software, discussing how they think about buying startups.
Kay is also planning to get some N.J. hackers and budding entrepreneurs together for a trip on the StartupBus, a unique concept through which strangers collaborate to create a company during the grueling migration to the annual South by Southwest Conference in Austin, Texas.
Esther Surden is Publisher and Editor of New Jersey Tech Weekly , and a contributor to Philly Tech News. This article originally appeared (with the exception of two updates) in New Jersey Tech Weekly.