Accelerator doubles startup investments as it starts third year
Hardware startups in the next batch at Highway1 can have twice the money to work with than the most recent founders got.
That is double the amount that the last batch got and five times the $20,000 that founders in the first and second groups got two years ago.
Hardware startups are expensive, especially in San Francisco. And, frankly, the market is there. There are more accelerators giving more money, Forrest said.
For comparison, 500 Startups offers $125,000 for a 5 percent stake in companies that go through its accelerator. Y Combinator companies get $120,000 for a 7 percent stake. Both have increased the number of hardware startups they work with.
“For a hardware startup to release a quality product at the end of a program, they need more time, or to shrink that time they need more dollars,” Forrest said. Highway1’s program is four months long. Y Combinator and 500 Startups are three-month programs.
Highway1’s batches are also much smaller, with about 10 startups to be accepted in the next one. 500 Startups typically has three times that number in a batch. YC lately has been around 100 companies per batch.
Forrest said he expects founders to apply who didn’t before because they needed more money than Highway1 gave for their projects.
“I think we will get some companies that just were not able to make their products with $50,000,” he said. “”I’m looking forward to seeing what companies do with the money.
“I think we will get some companies that just were not able to make their products with $50,000. I'm looking forward to seeing what companies do with the money. ”
Brady Forrest - VP - Highway1
Founders have until November 16 to apply to be part of Highway1’s Spring 2016 batch.
There have been 58 companies in the program’s first five batches in its first two years. They attracted a total of $65 million in funding.
Forrest and his program had a brief flash of celebrity as part of “Bazillion Dollar Club” this fall, a show that also featured 500 Startups and its founding partner, Dave McClure. The SyFy channel canceled the show after one episode, but its producers are still shopping it around.
“I am optimistic that the rest of the series will air,” Forrest told me.