Seth Priebatsch is one name that David Bookspan won’t soon forget. Priebatsch is the founder and CEO of LevelUp, an alternative payment service business where consumers can go to merchants and charge their purchases through a QR code.
“LevelUp is in a lot of different cities now and they are just killing it,” Bookspan says. “Seth is a force of nature. He was a 17-year-old freshman at Princeton when he came into DreamIt. He was full of energy, scary smart and just a rock star. He needed some additional business support and we connected him.”
DreamIt Ventures is a seed-stage accelerator and startup fund. Plans were announced on Dec. 11 to open DreamIt’s new world headquarters at the University City Science Center, one of the oldest and largest urban research parks in the United States. It will be part of a new Innovation Center jointly established by UCSC and Drexel University.
Drexel is committing $3 million to DreamIt Fund II, a $30 million fund to invest in startup companies participating in the accelerator program.
“One of the objectives that Drexel has is to create an innovation neighborhood in west Philadelphia and they saw DreamIt as an opportunity to anchor that neighborhood,” says Bookspan, the founder and managing partner of DreamIt Ventures.
Since its inception, DreamIt has launched a total of 127 companies, including 74 in Philadelphia.
Priebatsch is one of the entrepreneurs who got his start with the accelerator. So are Jack Groetzinger and Russell D’Souza, founders of Seat Geek.
“Seat Geek is the largest ticket service for event ticketing,” Bookspan says. “It can show you what are the best deals, and it does it through an algorithm they have developed that judges everything from the specific setup in the arena to the demand for tickets. They also use predictive analytics to tell you whether you should buy now or wait.”
Plant the seeds
There are some misconceptions even within the business community about the difference between an accelerator and an incubator.
“It’s important for fledgling companies to have office space where they can work and incubators can provide that and also provide support services for those companies,” Bookspan says. “But accelerators are much more about finding out in a short period of time whether the business has potential and can succeed. An accelerator is for a very short defined period of time. The companies either fly or die.”
In the case of LevelUp and Seat Geek, neither company had a problem taking flight.
“A lot of early-stage companies hit a valley of death where it’s difficult for them to raise the next round of funding,” Bookspan says. “The DreamIt fund provides that source of capital as well as an extraordinary return profile for the investors in the fund.”
A tough economy is often a motivator for would-be entrepreneurs to take a go at launching their dreams.
“Since big business is not providing as many opportunities or careers during down economic times, very talented people are much more willing to pursue their own dreams,” Bookspan says.
The biggest challenge Bookspan faces is keeping up with the demand for supporting startups in new cities.
“Philadelphia is emerging as a fantastic startup community,” Bookspan says. “Companies locate themselves where there is a confluence of four different aspects: capital, talent, customers and lifestyle. Philadelphia is now making big strides to have the convergence of capital and talent. There are also a large number of businesses that can be early customers for these companies in Philadelphia and certainly in the Northeast.”
