Virginia may be for lovers, but if a new accelerator program is successful, the state may also become a prime destination for cybersecurity innovators.
The Virginia Center for Innovative Technology (CIT) launched the Mach37 Cyber Accelerator on Thursday, Sept. 12. The program will provide seed funding to help create the next generation of cybersecurity companies in the state. The Virginia General Assembly appropriated $2.5 million to the CIT to fund and operate Mach37 for two years.
The accelerator consists of two 90-day sessions featuring four to six startup companies each. Every startup is given an initial round of funding from the CIT to develop their business. At the conclusion of the sessions, demo days will be held to showcase the companies’ product to investors. If a company is successful, it will receive a second investment from CIT and additional funding from private investors to continue work.
The five companies chosen for Mach37’s first 90-day session are:
The five participants will start work on approximately Sept. 16. The companies will meet weekly with Mach37 Managing Partner Rick Gordon, General Partner Dan Woolley and Associate Partner Ledger West. The meetings will feature guest speakers ranging from successful past entrepreneurs to other experts in cybersecurity. The demo day for all five Mach37 Cyber Accelerator companies will take place in mid-December.
Gordon said the accelerator was created due to a lack of disruptive, innovative cybersecurity products coming out in the region. The idea is to encourage cybersecurity professionals and technologists to step forward with their best ideas and turn them into product-oriented, market-facing businesses. He believes the program differs from other accelerators because it has specifically focused on attracting established experts, rather than young people who are new to the field.
“To develop that expertise takes a long time, so most of them are in their late 30s or early 40s,” Gordon said. “They have significant financial responsibilities, mortgages and families. So we tailored the program to the risk-averse.”
The three Mach37 partners have developed their own hypothesis of what state each company might be in at the end of the 90-day session. That includes what the partners need to do to help each participant to reach its maximum potential.
A company’s product or concept is validated by a network of “several hundred” cybersecurity stakeholders, including buyers and other entrepreneurs. That gives the accelerator participant valuable feedback as to whether the company addresses a true problem and if someone ultimately will buy the product.
If the accelerator works as designed, it will take a significant amount of risk off the table for a future investor that may be interested in the technology.
The second 90-day session will run from March to June 2014. Mach37 will also look to raise capital so it can support itself once the funding from Virginia runs out.
“I think the proof will be in the pudding,” Gordon said. “Folks will understand that we’re able to identify talent ... and create companies that are on a pathway to being successful. If we can do that, I think the funding issue will resolve itself.”