One is a gluten-free snack-food company. Another is a pest-control firm. They are two of the six members of Northeastern University’s first graduating class of start-ups.
Launched in a basement classroom, nurtured with the help of students, professors, and alumni mentors, these fledgling companies have matriculated through Idea, Northeastern’s accelerator program, which is distinguished by its management team: The incubator, which hosts about 80 start-ups, is run by students.
This month’s launch of Idea’s first crop of start-ups to leave the program marks a coming-of-age moment for the two-year-old program, which so far has awarded a total of about $160,000 to more than a dozen businesses that involve Northeastern students.
As in the outside world, most of the budding student start-ups will not bloom into functioning companies, but that is not the only idea behind Idea.
“We see this as a huge experiential learning lab,” said Dan Gregory, a Northeastern business school professor and Idea’s faculty adviser. “We want to build great ventures, but we really want to build great entrepreneurs.”
Idea’s grants are funded by alumni contributions and are awarded in sums of $10,000 to start-ups, whose business plans are vetted by student managers and members of an alumni advisory board. It has $210,000 to award in the coming year.
Unlike many other incubators, which are often run by venture capital firms, Northeastern does not take an ownership stake in the companies it funds. “As soon as you start placing a value on them, the nature of the relationship changes,” Gregory said, adding that Idea’s goal is to help the start-ups become self-sufficient. “We think the service that we should provide is to make them investment-ready.”
Northeastern graduate Xavier Xicay, 26, said his company, Tuatara Corp., an online resource for students and one of Idea’s six graduates, is beginning to talk with investors. The company is using its $10,000 grant from Idea to pay for product focus groups as it builds a Web-based platform for electronic textbooks and other education materials.
The Idea concept originated with 2009 Northeastern graduate Ashkan Afkhami, after he was not able to get several tech start-ups off the ground. At the time, he said, the school did not have an incubator, though similar programs were active at such schools as the Massachusetts Institute of Technology and Boston University. “Northeastern would be stupid not to do this,” Afkhami told administrators.
Afkhami helped raise Idea’s initial funding from alumni such as Bob Lentz, a veteran of the Massachusetts technology scene and former chief executive of Digital Reef, a Boxborough software company.
Lentz donated about $25,000 to the Idea fund and serves as chairman of its advisory board, which means he is part of the group that decides what companies get funded.
“When I went to school, the world was built around big companies,” said Lentz, a 1973 Northeastern graduate. “Now, the world is built around young companies. Some are successful, and they may turn into the next Facebook.”
Access to business incubator programs — on campus and off — is rising, said Emily Mendell, spokeswoman for the National Venture Capital Association, a trade association in Arlington, Va.
Start-ups “can come together and get a lot of value out of working in the same space, and having venture capitalists come in and support them,” she said. “The success rate of these ideas is probably somewhat higher [than average], because there is a lot more interest in the VC community in funding early-stage ideas.”
A number of students embrace the chance to launch their careers with the support of an incubator program, said Christopher Wolfel, 22, the Northeastern senior who is the chief executive for Idea. “The biggest thing for us is to not only educate people to start a business, but to be involved in a start-up,” he said.
When Wolfel graduates next year, he will pass on leadership to another student, and like all of Idea’s volunteer student managers, he is responsible for finding candidates to replace him. Faculty advisers then decide who gets hired to run Idea.
“It’s not very hard to find people who are interested,” Wolfel said. “It’s a very real learning experience that you can’t really match without running your own company.”
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