Straight Shot’s Managing Director shares his perspective on the future of Omaha’s first startup accelerator.
David Arnold has something to be proud of at Straight Shot.
To date, the Straight Shot accelerator has invested in 20 companies with $400,000 in seed investment. Of those companies that have gone on to fundraise, they have collectively raised $4.5 million.
Clearly the program has found a demand in the region, but adding more teams each year may not be the best way to grow, according to Arnold.
“The hardest thing for any accelerator is growing without sacrificing the quality of the teams,” said Arnold. “Could we have two classes a year? Could we have a class of 15? Yes, but I don’t think we would be able to increase the level of talent in companies.”
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In order to stay competitive on the national level Straight Shot will be increasing its seed investment in its teams this year from $20,000 to $25,000 for 6% of the company.
“The average is 6% for $23,000. I didn’t want that to be the reason that we lost companies,” said Arnold. “That hasn’t happened, but I wanted to get ahead of it.”
A focus on founders
Arnold has realized through his experience at Straight Shot that an accelerator is really betting on people, not ideas.
“It’s easier to mold an idea than a founder,” said Arnold. “It’s fun to talk about ideas. It’s fun to talk about markets. But if someone can’t execute, you go nowhere.”
That makes evaluating founders key. Last year he referred to the 2015 cohort as a “founders class,” because so many of the teams were led by veteran entrepreneurs.
“You saw an older, more experienced class last year and that wasn’t unintentional,” said Arnold.
Straight Shot also used Gallup’s EP10 test to identify the entrepreneurial strengths of candidates. Arnold said it was a helpful tool during selection, when pairing interns with founders, and when providing counsel during the 90-day program.
“A lot of what I do comes down to how I talk to each person, and a lot of that comes down to personality,” said Arnold. “I would say it was effective in that.”
Omaha’s best internship?
Last year Straight Shot also launched an internship program with Creighton University, which was widely received as a success.
“I was blown away by the sophistication of Creighton internship prospects. They were sharp, they were well prepared, and it was hard to select 7 out of the 20 or so who applied,” said Arnold.
It is perhaps one of the most unique internships available in the area, with no tightly-defined role, the need to wear a lot of different hats, and the opportunity to significantly influence the success of a company.
“It’s easier to mold an idea than a founder”
“They would say things like, ‘I felt like I was treated like a co-founder,’” said Arnold. “And by that they mean they were busy. They were stressed out. They sometimes had real concerns about the business.”
Creighton decided to continue the program again this year, with UNL also providing an intern for the first time.
Making the right ask on corporate innovation
During his tenure Arnold has been an advocate for creating an accelerator that matches the unique corporate community of Omaha, and he’s made significant progress in building partnerships within the business community. Last year’s class was notable for its first corporate innovation team from ES&S.
Putting a small team from an established company through a startup program was a learning experience. Arnold recognizes that it’s a big ask to make of a company, and he doesn’t know if there will be another corporate team this year.
“I thought it would be easier to get the next ES&S in. And it’s really difficult,” said Arnold.
The problem, as Arnold sees it, is that the people who work in established companies are incentivized against perceived risk.
“They get why these programs are valuable. They get excited about them,” said Arnold. “Where it starts to breakdown is when it gets to, ‘What are we going to bet on?’ We’re asking a lot.”
That said, Arnold still sees corporate partnerships as worthy of continued exploration. The way forward may not include corporate teams going through a traditional accelerator but rather helping companies with innovation at whatever level they need.
Arnold has plans underway to work with corporations to offer talent identification expertise and to partner with research organizations to help them bring ideas to market. Straight Shot will also be working with the Greater Omaha Chamber on a food related business development program for ex-ConAgra employees.
“I’m planning seeds for the future,” said Arnold. “But I’m not sure when the crop’s going to yield.”
Straight Shot is now accepting applications.
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Ryan Pendell is the Managing Editor of Silicon Prairie News.
