Silicon Valley is home to numerous accelerators and incubators, but perhaps none is as unique as one located right in the heart of Stanford Research Park: StartX.
StartX is exceptional by several measures: The average amount of capital that its founders raise ($4.5 million), as well as the number of StartX-launched companies that are still operating and successful (87%). However, what truly makes StartX stand out is its business model: StartX operates as a mission-based nonprofit and takes zero equity from the companies that go through its program.
Yes, you read that right. Zero equity.
How does a zero-equity nonprofit accelerator manage to lead the world as one of the top-ranked accelerators? Part of its formula stems from the giving-back ethos that is at the core of StartX’s mission. In fact, when taking a tour of StartX’s headquarters and speaking to StartX’s staff members and accelerator members, the mission of giving back is palpable.
StartX’s Culture is an Extension of Stanford’s Entrepreneurial Community
StartX was founded in 2011 by a Stanford alum, Cameron Teitelman, and today, many of the core team staff members are from Stanford. In almost all cases, StartX requires that each founding team that applies has at least one member with ties to Stanford University.
The connection to Stanford goes beyond the founders who are admitted to the program. It seeks to provide a vital experiential education within Stanford’s various schools, ranging from the Stanford Graduate School of Business to Stanford’s many design and engineering programs. From hosting events on campus, to giving lectures, to pulling in students as volunteers, the StartX team seeks to give back to Stanford by educating students about entrepreneurship, providing event space, and most importantly, attracting some of the world’s leading founders into StartX’s accelerator program.
As a nonprofit, StartX has an incredibly distinct accelerator program: It invites its founders to ask questions, share their business concerns, and find community from fellow founders, mentors, and StartX partners. In more traditional accelerators (which are often managed by VC firms who are seeking to nurture new companies), founders are often cautious about revealing business challenges, as there is an inherent drive to show continued signs of success to the host who has an equity stake. However, because StartX is a zero-equity model, it frees the founders up to ask questions, seek mentorship, and make business decisions fostered in a more open and transparent environment. In fact, many StartX founders and staff members comment that going through the program has the same educational and community philosophy that defines Stanford’s culture.
StartX is Open to a Variety of Companies and is Stage Agnostic
StartX – unlike traditional accelerators – will take in companies at various stages and from a variety of sectors. Many of the companies that enter into StartX have already received a first round of funding, and the founders are seeking a strong, collaborative environment where they can carefully and wisely build companies that are set up for success.
Founders who apply to StartX’s program go through an intense screening process. Applicants are carefully vetted. StartX invests time in understanding the founders themselves rather than just their company. They’re seeking to attract founders who intend to stay with their company for the long-term, and also wish to stay involved with StartX throughout their life as an entrepreneur. The majority of StartX founders come back and continue to contribute to StartX – as mentors, lecturers, or even partners – carrying on the chain of giving back to future entrepreneurs.
The current breakdown of StartX-founded companies is roughly 25% medical, 20% hardware, and 55% consumer enterprise software products. With a strong presence on Stanford’s campus, StartX is able to attract a cross-functional mix of students, and even faculty members, who are hoping to launch the next great company.
StartX Med Launches Companies that are Making Vital Developments
To attract companies focused on developing groundbreaking technologies and services within the medical realm, StartX has a division called StartX Med, which caters specifically to medical entrepreneurs, ranging from biotechnology to care delivery innovation. Stanford Health Care is a main partner of StartX, and many of its founders have come from Stanford’s biodesign and medical engineering programs.
StartX Med has built a leading community of mentors and Stanford faculty advisors, and has additional resources geared specifically toward medical startups. Founders in the StartX Med program are able to use StartX’s lab amenities, and go through specialized instruction on intellectual property and the FDA approval process. Some of StartX’s biggest success stories have come out of the Med program. To date, StartX Med has launched 25 companies; 70% of which have demonstrated commercial viability.
StartX’s Location in Stanford Research Park is Vital to its Success
When speaking with StartX staff members and founders, one aspect of their success is abundantly clear: Its location. Situated near Page Mill Road, StartX has strategically placed their entrepreneurs in the Stanford Research Park, keeping its founders close to the Stanford campus, and easy access to crucial founder partnerships, including investors on nearby Sand Hill Road and leading law firms. Founders also have abundant networking opportunities with some of the world’s most successful companies located within Stanford Research Park. StartX and their entrepreneurs benefit from a world-class address with a rich history of successful companies that came before them, and a vibrant, dynamic ecosystem that nurtures and grows new ideas.