StartingBlock Madison Announced

startingblock-madison-buildingA startup hub in downtown Madison that will be anchored by Sector67 and gener8tor has just been announced. StartingBlock Madison’s goal is to create a centralized location for the Madison region’s entrepreneurial activities. The facility will provide Madison-based startups with affordable, flexible office and co-working space, accelerator support, peer and mentoring resources, education and training, and community building activities that will make the entrepreneurial community more accessible.

Leaders from the Capital Entrepreneurs community have been closely involved in shaping the project, and have also been working with leaders from the civic and broader business community. The project will create up to 90,000 sqft of space in the Capitol East District dedicated to early stage and growth companies. StartingBlock Madison’s facility will provide:

  • A permanent home for Sector67, Madison’s successful hackerspace/prototyping center for next-generation manufacturing technologies;
  • A location for gener8tor, a startup accelerator that provides expertise, mentorship, and capital through a 12-week intensive curriculum;
  • Subsidized office space with short-term leases and flexibility for young startups;
  • Quality at-market office space for high growth companies;
  • A healthcare IT incubator to support the growing number of healthcare IT startups;
  • Space for other entrepreneurial resources, such as funders, investors, law firms, and other professional service providers; and
  • Community and auditorium space for Capital Entrepreneurs and other entrepreneurial activities and events.

Based on a survey of Capital Entrepreneurs companies, Madison startups want to be co-located near other startups in the downtown area. They also value having an abundance of “third spaces” and people nearby beyond the walls of their office. The vibrant urban neighborhood around the StartingBlock site with its many restaurants, coffee shops, bars, and diverse housing options made it a great fit for this project. The surrounding area also holds a lot of growth potential to develop into a strong startup, tech, and creative district.

This project builds on the success of other business incubators already in the neighborhood, and took inspiration from other successful projects from around the country such as Chicago’s 1871. Check out articles on StartingBlock Madison in the Wisconsin State Journal, Isthmus, NBC15, and on Nibletz.

PerBlue Launches Greed for Glory

perbluePerBlue just released a significant update to their recently released Greed for Glory mobile game for Android. The latest update adds kingdoms, social features, and leaderboards to the 3D combat strategy game. Greed for Glory originally launched in June, and has since garnered over 700,000 installs from around the world. Download and play Greed for Glory here.

Madison Coworking Featured in Wisconsin State Journal

100state-logohorizon-logo2The growing coworking movement in Madison was featured in the Wisconsin State Journal. Coworking in Madison has continued to gain steam, with existing coworking spaces expanding and new ones forming. The article focuses extensively on the role coworking plays in the startup community, why the spaces are so valuable, and also highlights some of the companies currently working out of spaces.

Read the full article here.

New BrightStar Wisconsin Fund Formed

brightstar-logoA new nonprofit fund targeting investment in early-stage Wisconsin companies has formed. The BrightStar Wisconsin Foundation has raised an initial fund of $6 million, and is expected to raise an additional $60 million over the next 3 years. BrightStar’s non-traditional model mixes venture capital investments with charity. Investors in the fund don’t receive a return on their investment, instead, nearly all of the earnings will be re-invested in future early stage companies.

Read more about the fund in the Milwaukee Journal Sentinel here, and the Wisconsin State Journal here.

NPR Highlights Effect of Madison’s Food Scene on NYC

npr_logo_rgbA recent story on NPR focused on how high end restaurants in New York City are having an increasingly difficult time finding quality chefs. A big reason for this is thought to be that young, up-and-coming chefs are going to smaller, more affordable cities with their own vibrant food cultures – places such as Madison and Austin. Madison and similar cities offer greater connections to locally sourced food and farmers, as well as lower costs to live and open a restaurant.

Read or listen to the full NPR story here, and check out a Cap Times story on this topic here. The growth of Madison’s flourishing restaurant scene was also highlighted this week by another story in The Cap Times which can be found here.

Artup Weekend Coming July 26-28

artup-weekend-logoThe first ever Artup Weekend is taking place in Madison the weekend of July 26-28. Artup Weekend is an event where artists and entrepreneurs work together on teams to build amazing art or art businesses over a weekend.

The event was inspired by hackathon style events traditionally held in the tech community, but now with a focus of doing a similar style event in the art and creative community. The weekend starts with pitches for potential creative ideas to work on. Teams are formed around the top ideas, and then work throughout the weekend to bring their visions to life. The projects are then presented and prizes awarded on Sunday.

Artup Weekend is funding the event and handling registrations through an ongoing Kickstarter campaign. For more information and to register for the event, go here.

Madison a Top 20 Area for Venture Capital Per Capita

vc_DEALS_capitawebMadison made the short list of cities with the highest amount of venture capital investment per capita. The Atlantic Cities released a series of posts examining the new geography of venture capital and high-tech startups.

The Silicon Valley (#1) and San Francisco (#2) areas are still by far the top areas for investment, but the remainder of the list is increasingly dominated by smaller metro areas with major colleges that are home to strong research universities. Madison joined college towns including Boulder and Ann Arbor as a “High-Tech Challenger to Silicon Valley”, and had $11.5M invested and 1.9 deals per 100,000 people.

In additional to college towns playing an increasing role in the high-tech startup world, there is a shift in this activity from suburban areas (like Silicon Valley) to more urban areas (like downtown San Francisco). Venture capital and start-up activity today is associated with denser, more talent-driven, more diverse and innovative metros as outlined here.

“Young workers want to live in a city — somewhere they can ride bikes, shop locally, walk to their favorite restaurants and bars, and live in a dense urban or urban-lite environment with nearby amenities,” stated Bruce Katz of the Brookings institution’s Metropolitan Policy Program.

Read the full Atlantic Cities post and see the charts here, and check out an article in the Wisconsin State Journal about it here.

Firsthand Perspective: Office Space and Startups

IMG_5271_smallForrest Woolworth is COO of the mobile gaming startup PerBlue and co-founder of Capital Entrepreneurs. Forrest has been on the office space hunt on multiple occasions with PerBlue, and shares what it’s like to be a startup in the world of corporate real estate with us now.


Even with 2 million square feet of unused office space in the Madison area, the next generation of businesses are having a difficult time finding good places to set up shop.

The emerging lean startup businesses are a different breed of companies than traditional businesses. Many of these startup companies are bootstrapped, and others take on some amount of seed or Angel funding. They are high risk ventures that move at a brisk pace and are generally not able to plan more than a few months out.

Startups are not like law firms or consulting companies which generally have fixed contracts which guarantee revenue for multiple months or even years out. They’re also not like biotechs or life science companies which have long product development cycles and require large amounts of funding to be invested over a period of years. Startups require significantly less capital to get off the ground (thousands, not millions of dollars) and their products have much shorter development cycles (months, not years).

A startup’s existence depends entirely on the amount of runway it has. In order to give a startup the greatest chances of success, it needs to maximize its runway by keeping expenses as low as possible and making sure every dollar spent is spent wisely.

In startups there are relatively few overhead expenses: people, computers, server costs, and space to work. Once a startup grows beyond the coffee shop or coworking space it will inevitably encounter the complicated world of corporate real estate that doesn’t play well with startups.

Based on responses from a survey of Capital Entrepreneurs companies, some pretty clear trends emerge.

Capital-Entreprenuers-Startup-Office-Space-Price-Elasticity

Capital-Entreprenuers-Startup-Lease-Length

With average office space prices in the downtown area ranging from $17.56/sqft – $22.37/sqft, at least two-thirds of these new companies are priced out of the market. Even if they can find a price point that works, lease lengths often run 3-5 years.

There is currently a growing unserved gap in the office space market in Madison (and beyond). The new breed of upcoming businesses doesn’t fit well into the traditional office space model. Startups require flexible, cost effective leases. They eschew cube-land and fancy private offices for simple, open, and collaborative workspace. They want to be near other startups and close to downtown. They also value having an abundance of “third spaces” and people nearby beyond the walls of their office.

This is what startups want:

  • Month-to-month leases are ideal. 6 months is reasonable. 1 year is generally the max comprehensible length.
  • $10 per sqft is an ideal price target. Interest drops off quickly on anything north of $15/sqft.
  • No personal guarantees on leases, especially if the company employs people beyond just the founders. Founders are already shouldering enough risk.
  • Startups are not able to spend their operating capital on build out expenses, but they all want a simple open floor plan and collaborative office space.

Even as startups play an increasingly larger role in the corporate real estate market in Madison, few properties are catering to the actual market demands. Office space targeted at “emerging tech companies” priced at $30/sqft and requiring a 5+ year lease commitment is not going to fill with these companies. The greater lease flexibility required by this newer model will be absorbed in the fluidity of the startup community – existing companies are dynamic and are often growing or shrinking, and new companies are always forming and coming up the ranks.

Instead of forcing promising startups into basements, backoffices, and spreading them all throughout the city, we should look at ways space catered to the needs of startups could actually help them instead of acting as just another big hurdle they have to get over. By co-locating companies on lease terms that make sense, not only will these companies be able to find space that works for them, but it will actually help improve the startup ecosystem as a whole.

What would the biotech community in Madison look like without University Research Park? Would it be nearly as strong as it is today if each biotech company had to independently negotiate with a landlord and try to convince them to put in a wetlab where there once were cubicles? In order to give the next generation of businesses the best chance of success, office space is an important piece of the puzzle to ensure is done right.

Asthmapolis Receives More Funding and Award

Asthmapolis_Logo_WebsiteAsthmapolis, maker of the FDA-cleared mobile health solution for asthma and COPD, recently received a second investment from the California HealthCare Foundation (CHCF). Asthmapolis is designed to improve the care of people with asthma and COPD, advance understanding of symptoms and triggers and help them achieve control of these diseases. The CHCF investment in Asthmapolis, which now totals $1,047,000, is directed at helping to support respiratory health management with the underserved in California. Read more about this latest funding here.

Asthmapolis also received the Horizon Award in the 2013 TripleTree iAwards for Connected Health in recognition of its “unique advancements in chronic disease management via connected health.” Read more from the Wisconsin State Journal here.