LaunchBox expands to Triangle

LaunchBox Digital, one of a new breed of "business accelerators" that are in the business of helping technology start-ups survive and thrive, is expanding to the Triangle.

Founded in 2008, Washington-based LaunchBox provides start-ups with up to $20,000 in seed capital, free or heavily discounted professional services such as legal and accounting, and an intense 12-week program in which entrepreneurs work daily with a team of mentors and advisors. In exchange, LaunchBox receives a six percent ownership stake in the business and warrants that allow it to make an additional investment.

LaunchBox, which works only with software and Internet companies, plans to offer its first 12-week session in Durham this fall for between eight and ten companies, said Chris Heivly, executive director of the company's Triangle operations. Heivly, the former chief operating officer of Cary software company Ultimus, is working out of temporary space in the American Tobacco Campus in downtown Durham, and the company is in late-stage negotiations to lease permanent space in Durham.

LaunchBox's arrival is "a huge win for RTP," said Joan Siefert Rose, president of CED, formerly the Council for Entrepreneurial Development.  

Rose views LaunchBox as a vehicle for attracting start-ups to the Triangle. Entrepreneurs from around the country are likely to attend its accelerator sessions, and those that like what they see here could decide to set up shop locally rather than returning home, she said.

LaunchBox's first two accelerator sessions, held in Washington, each attracted 250 to 300 applications from across the country, said Heivly. Of the 17 companies that have gone through the program, one was acquired, 14 are still in business and eight have received follow-up funding from outside investors, he said.

"I think that sounds like a great record, particularly when you overlay the economic environment," said Mitch Mumma of Intersouth Partners, the Triangle's oldest and largest venture capital firm. "It was, and still is, a hard time to raise capital for that stage of company."

Mumma said he would view being a "graduate" of LaunchBox's accelerator program a plus when evaluating whether to invest in an early-stage IT company.

Rose said LaunchBox is one of the  pre-eminent business accelerators in the country. Others include the Silicon Valley's Y Combinator and Tech Stars of Boulder, Colo.

What distinguishes these accelerators, said Rose, is that they offer "very much a hands-on experience."

"We'll surround them with a community of advisors and mentors" -- both internal staffers and experts from the region, said Heivly. "The goal is to give them as much feedback and data points about their business as they can possibly handle."

Heivly was working on an accelerator of his own, Triangle StartUp Factory, when he met with LaunchBox executives and decided that joining forces with an established, name-brand company made sense.

The Triangle's "technology base" -- thanks to its strong universities and companies such as Red Hat and IBM -- and its quality of life make the region "just so perfect and ripe for one of these accelerator programs," said Heivly.

Following each 12-week session, LaunchBox invites venture capitalists from across the country to attend a "Demo Day" in which entrpreneurs pitch their businesses.

"The whole object is to set these companies up for the first round of funding," Heivly said.

The up to $20,000 in seed capital that LaunchBox provides is "basically enough for two to three people to live on for three to five months, and maybe pay a few expenses," he said. "We call it doing the Ramen noodle diet."

Companies interested in applying for the fall program, which is scheduled to begin Aug. 31 in Durham, can submit applications here. Applications must be submitted by midnight June 30.