Big-bucks business accelerator teams with Grinnell to open Des Moines office

After years of flirtation with the area, the leaders of one of the richest and most well-connected business accelerators in the country will try to boost the local tech sector with a new Des Moines office.

Techstars and Grinnell College formally announced a partnership Tuesday morning, bringing together Iowa's best-endowed higher education institution and an international startup incubator. According to a 2018 audit, the trustees of Grinnell College have about $2.5 billion in assets.

Techstars, meanwhile, boasts a $265 million venture capital fund. It also announced a $42 million infusion from Silicon Valley investors SVB Financial Group in July.

Techstars had 46 business accelerators in cities including London, Toronto and Dubai. It also claims a roster of 7,500 mentors who work with startup founders and 11,900 investors, and has launched incubators in partnership with companies like Amazon, General Electric and Barclays.

Grinnell Chief Investment Officer Jainen Thayer said Tuesday that the college will provide "sufficient funds" to operate a Techstars Iowa office in Des Moines for three years.

Techstars will kick off its first Des Moines cohort from September through December with 10 entrepreneurs. Each company will receive $20,000 from Techstars and Grinnell College, as well as the option for a $100,000 convertible note. 

Thayer said he hopes the college's students and professors will participate in the incubator.

“We are really trying to integrate a liberal arts education into today’s economy," he said. "What does that mean? We can offer students opportunities both after graduation to stay here in Iowa and to develop, but also, during their undergraduate experience, of having a different type of opportunity, an internship or work study.” 

Boulder, Colorado-based Techstars will be the fourth incubator in Des Moines, along with the Global Insurance Accelerator, the Iowa Agritech Accelerator and BrokerTech Ventures. But Ben Milne, the founder of Des Moines-based e-commerce company Dwolla, has said Techstars' network is larger than most of its competitions. 

Thayer began pushing for a partnership with the accelerator weeks after starting his job with the college in September 2018. 

"As companies come out of some of these local accelerators, the question is always, ‘OK. What next?’" Thayer said. "I think that this Techstars Iowa is really meant to answer that question and say, ‘Here is what comes next. Here is dedicated financing. Here is opportunity and a conduit to additional relationships that can help fuel that growth.’”

Claudia Reuter, the managing director of Techstars' Hartford, Connecticut, accelerator with Black & Decker Corp., said she was not aware of another partnership between Techstars and a college. 

“This has to be a good investment," Thayer said. "This is going to be something that we hold in the endowment that we look at and evaluate, as I said, over the years. I’m pretty confident that this is going to be a very interesting investment.” 

Kerty Levy, who previously served as the interim director for the Iowa Agritech Accelerator, will be the managing director for Iowa Techstars. She said she was drawn to the new job because it will allow her to work with more types of technology businesses.

Levy and Thayer said they are looking for more investors and organizations to partner with the new accelerator. Tuesday's news conference occurred in the Dwolla office off Locust Street, though the company did not announce any partnership with the accelerator or Grinnell.

Milne and other Des Moines entrepreneurs have deep ties with the team that launched Techstars in 2006. Through a separate company, a couple of venture capitalists behind Techstars invested in Dwolla during 2017 and 2018 funding rounds. 

Brad Feld, one of those venture capitalists, also spoke at local entrepreunerial conference Thinc Iowa in 2011 and Monetery.  And Gravitate Coworking founder Geoff Wood also helped host a "Techstars Startup Week" in Des Moines in 2014.

Techstars Iowa will accept applications for its first cohort class from Feb. 17 to May 10.

Tyler Jett covers jobs and the economy for the Register. Contact him at 515-284-8215 and tjett@registermedia.com. Follow him on Twitter @LetsJett.