In the world of innovation funding, MassChallenge is a big deal, an accelerator that comes up in conversations alongside Techstars and Y-Combinator, and it’s poised to be yet another game-changer in Houston’s ever-evolving innovation ecosystem.
One of MassChallenge’s greatest selling points is that it does not take equity from participants. Relying instead on government grants and funds from philanthropic and corporate partners, for startups looking to change the world, it’s an ideal situation to allow for growth without sacrificing ownership.
That’s just one reason Central Houston, in partnership with the Downtown Redevelopment Authority and City of Houston, worked hard to bring the Boston-based accelerator to Downtown Houston in early 2019.
City leaders knew MassChallenge Houston’s success wouldn’t just reflect the strength of innovation in the local market but would also showcase how Houston complements innovator-friendly Austin, and eventually Dallas and San Antonio, making Texas competitive with powerhouses California and New York.
Luckily for the MassChallenge Houston team, their inaugural (albeit abbreviated) cohort met and exceeded their standards. What started with 286 competitive applications became 25 teams that set the stage for their first full-length program, slated to start in 2020.
Here’s what the newest companies can expect for the next round.
It all starts with a simple application that takes around 15 to 20 minutes to complete. Because MassChallenge is a non-equity accelerator, the selection criteria focus on more than just potential profitability.
“What we want to know is, is the idea a game-changer? Will it create massive impact?” says Jon Nordby, managing director of MassChallenge in Houston. “We want to know, how are you thinking about changing the world, and how big is the problem you're addressing? Can you execute on your plan, and is it sustainable?” Understanding how MassChallenge can help companies overcome obstacles and progress to the next stage is also helpful.
A minimum of five judges reviews each application, and every startup gets feedback from experts. That means companies get feedback from five experts for free, just for applying.
At the end of this judging cycle, expert feedback will determine the finalists invited to the cohort, less than 10 percent of original applicants.
After making the initial cut, participants attend an orientation the first week to learn the mechanics of the MassChallenge program. Because the companies are still running their businesses while participating, cohort members can choose to come into the office or attend sessions remotely in the following weeks.
Sessions consist of content focused on topics like sales and marketing, legal and IP issues, early product validation, and industry-specific notes. But, according to Nordby, “The heart and soul of the process is the mentor connections.”
“In the first week of boot camp, mentors show up and meet the companies, and the mentor matching is an ongoing thing. Startups can see all the mentors in the network, so they have the ability to reach out and set up sessions,” says Nordby.
In addition to these experts, the MassChallenge staff provides office hours to participants to help them figure out where their challenges are, find the right mentors and work to connect them to the right people. According to Nordby, “Feedback has shown that's the most valuable thing ... the strongest value proposition to a lot of startups is the mentorships, and we are very specific about our partners.”
At the end of the program, each startup, called a finalist, participates in a pre-final judging that consists of a 20-minute pitch. Based on scores and feedback from the judges, a variable number of finalists are selected, based on the strength of their pitch, the impact of the company, and what they gained from the program.
Cash prizes go to the top teams, and judges decide who wins and how much each team receives. One to five cash winners are typical, though the number fluctuates between cohorts. Teams that don’t receive a cash award are eligible to reapply for another MassChallenge competition.
From that first list of impressive applicants, we spotlight the three finalists that continue to make waves.