A Silicon Valley startup accelerator known for its deep pockets and high-profile leadership is expanding to Vancouver.
Expa Labs, which grew out of a company started by Uber co-founder Garrett Camp, launched last year in New York and San Francisco. Earlier this month, it begun recruiting the first group of companies for its Canadian program, which will begin in June.
“I think that Canada has massive untapped potential talent and some great entrepreneurs that just need a little bit of support,” says Milun Tesovic, a partner at Expa and founder of online song lyric website MetroLyrics, which was acquired by CBS Interactive.
Startups selected for the program will receive an investment of $250,000 (U.S.) or $500,000, as well as access to office space, “support, mentorship, access to our network and help fundraising once the program is over,” Mr. Tesovic says. In exchange, Expa Labs will take between 10 and 20 per cent in equity.
The size of that initial investment sets Expa Labs apart from similar programs, he says.
Fewer than half of the startup accelerators and accelerator-like programs (which through a competitive process offer investment and support in exchange for equity), in Canada make investments in participating startups, according to a 2013 study conducted by MaRS. Those that did invest $50,000 on average.
Even in the United States, the most prominent startup accelerators tend to invest no more than $150,000 in companies entering the program.
Mr. Tesovic says it’s increasingly important to give startups more time to get things right and, by making a bigger investment off the bat, startup founders can spend more time working on their product, instead of worrying about raising more money.
“Companies need a longer runway in order to figure out whether or not their product is going to work,” he says.
Building a startup is often about trial and error, says Mike Schmidt, who participated in the first edition of Expa Labs with his startup Dovetale. It uses image recognition software to help brands identify popular online commentators or “influencers” to work with.
“The whole notion of buying yourself more time to figure it out, especially in this climate, is pretty incredible,” he says.
Mr. Schmidt, who grew up in Toronto, has founded several companies and gone through accelerator programs in Canada and the U.S.
“Expa is so, so different from everything else I’ve done,” he says.
While the money was important, he says working next to people who have helped build some of the world’s largest tech companies was helpful and inspiring.
Mr. Tesovic, who grew up in Vancouver, says he wants to provide entrepreneurs with the type of support he wished he had when he was first starting out.
“When I got going with my first couple of companies, I didn’t know anybody in the Valley and I think it put me at a major disadvantage,” he says.
Boris Wertz, the founder and general partner of Version One Ventures, a Vancouver-based venture-capital fund, says he’s excited to see Expa Labs expanding to Vancouver.
“Over all, adding more pieces to the Vancouver ecosystem is a good thing, especially when it’s experienced investors or accelerators that have a little bit of a broader view than just Vancouver,” he says. “Whenever you have someone that’s world-class and you bring them into an ecosystem like Vancouver, I think it elevates the whole ecosystem.”
He says that he while expects Expa Labs to make a difference for some companies, it’s overall impact could be limited because it will only be funding a small number of startups.
Six startups participated in Expa Labs’ initial six-month program and while Mr. Tesovic says he expects that number to grow, there is no specific target for this year’s round. He says that will be decided by the strength of the applications.
“The first thing we look for is a great team; the second thing would be the market and what kind of idea they’re looking at pursuing,” Mr. Tesovic says. “We don’t have a particular mandate where we’re very focused and we just want to invest in a particular category.”Report Typo/Error
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