With double-digit unemployment and relatively few companies that seem to be growing, Rhode Island would be glad to see some of its young firms become breakout successes. A new company called Betaspring, founded by a team of local technology entrepreneurs, aims to do just that.
Betaspring is, formally, a micro-seed venture capital fund – meaning the firm will provide small loans, averaging $20,000, to early-stage startup companies. But its organizers say what is equally if not more important about Betaspring is its plan to offer young entrepreneurs an intensive, 12-week mentoring program to help them get their new business off the ground.
“Our goal is to start a lot of companies, and start a lot of companies fast,” said Allan Tear, Betaspring’s managing partner and a prominent Providence-based technology consultant. “We have to have a critical mass of startups here in Providence.”
To create that critical mass, Betaspring is following an approach pioneered by similar firms like Y Combinator, in California’s Silicon Valley, and TechStars, which Tear credited with turning Boulder, Colo., into a startup haven, and which recently expanded to Boston. Although the founders hope to attract participants from the tens thousands of students here, the program will be open to entrepreneurs from all over the country.
Betaspring will take applications from startups, 10 of which will be picked to receive seed capital and go through a 12-week startup “boot camp” in Providence, during which they will be mentored by an experienced businessperson. They also will receive free legal assistance to formalize their tax status and sort out other basic business issues. And at the end of the 12 weeks, they will get the chance to pitch their businesses to a group of prospective investors.
Tear readily acknowledges that some of the firms will not succeed – in fact, he said, that’s the point. If you only back one firm, the thinking goes, the odds are low that it will turn out to be the next Google. But if you support enough of them, your odds improve.
Tear and his two partners – Owen Johnson, owner and principal broker of Providence brokerage firm Reagent, and Jack Templin, co-founder of the Providence Geeks – have recruited more than 30 entrepreneurs, venture capitalists and technology and design experts to serve as mentors.
One of the mentors is Charlie Kroll, who founded Providence-based banking software firm Andera while he was still a student at Brown University. Kroll said receiving guidance early on in a new venture is vital for entrepreneurs to succeed. “I would not have done anything successful without mentors,” he said.
Betaspring’s first set of startups is currently going through the program, although this group is not receiving the initial investment that future participants will. They include Alan McClanaghan of Warwick and his business partner, Ji Kim, whose startup, DiJiPOP, would offer manufacturers and retailers a new way of merchandising products.
McClanaghan said he thinks Betaspring will provide valuable assistance to local entrepreneurs. “The startup process is not easy,” he said. “I think this will help.”
Another group of entrepreneurs taking part has developed a system that allows doctors and patients to use text messaging to communicate and share information. The prototype is already being tested by a small-town doctor in Brazil.
Hamzah Ansari, who received his master’s degree from Brown last month, said he and his four partners are optimistic about the possibilities for their product, particularly as the medical industry seeks efficiencies to pay for health care reform. “There’s this overall trend movement toward preventive care, which requires more contact with patients,” he said. •
