Meet the incubator: DreamIt Ventures
A Q&A with DreamIt Ventures CEO Kerry Rupp. The Philadelphia-based incubator was founded in 2008 by Steve Welch, Michael Levinson and David Bookspan. DreamIt operates accelerators in Austin, Baltimore, New York, Philadelphia, and Tel Aviv, and according to the firm, has launched 157 companies. Incubated startups have also raised more than $171 million in follow-on funding, and have an enterprise value greater than $524 million to date.
SUB: Please briefly describe the vision behind DreamIt Ventures.
Rupp: DreamIt believes companies are more than just the products they sell. Our vision is to help driven, high-potential entrepreneurs with big ideas build fundable, scalable companies.
To support this vision, DreamIt’s three-month accelerator program helps teams develop their path to real revenue growth, prove their business models, and acquire paying customers—the activities necessary to ensure their dreams turn into real companies.
SUB: Generally, what kinds of companies does the DreamIt team seek out to incubate?
Rupp: DreamIt looks for the brightest, high-potential teams who are looking beyond quickly building their products. We accept teams who range from just having an idea to already have existing revenue or funding. They need to show that a large market exists and the team has a plausible and affordable path to reach that market, plus that the market has a willingness to pay for a differentiated solution. We consider whether the business can be accelerated from one market milestone to the next in the short three-to-four months of our accelerator program.
We are relatively agnostic about industry, except in our partner programs where we focus on specific types of companies. In our DreamIt Health programs—conducted in conjunction with major industry players like Penn Medicine, Independence Blue Cross, Johns Hopkins University, Northrup Grumman, and Kaiser Permanente—we are specifically seeking companies working on health technology solutions, typically in the enterprise health arena. Additionally, our DreamIt Access programs, conducted in partnership with Comcast Ventures, are focused on providing minority-led startups the resources they need to succeed.
SUB: More specifically in terms of founders, what characteristics do you look for in founders when you are considering an applicant?
Rupp: We look for founders with a track record of entrepreneurial activity—people who have had proverbial early lemonade stand businesses. Given the short time frame of the accelerator program, it’s critical that teams can execute on moving the business forward, so we look for doers. For tech companies, that means we expect a full-time, in-house technical team member who can build and iterate on product from day one—or preferably before they arrive. We also look for someone on the team who can hit the streets, talk to customers and sell. Ideally, we prefer a full complement of skillsets within each team—however, we do consider whether we can supplement them with other resources, as long as they have the fundamentals.
SUB: How do you see the tech startup economy here halfway through 2014? Is it on an upswing in terms of investment? Do you see real innovation happening?
Rupp: From our point-of-view, the tech startup economy is thriving. We continue to see startups come out of the gate with truly innovative ideas that will solve real-world problems. There are thousands of startups today with ideas that will be true game-changers, and we help them turn those ideas into real companies. For example, BioBots is revolutionizing regenerative medicine by building 3D bio-printers that address the previous technical hurdles of 3D bio-printing and help scientists build and prototype artificial 3D tissues at a low cost.
Investors are taking note and are participating in funding the innovation, albeit more selective today than ever before. Dozens of our portfolio companies are going through follow-on financing right now, substantially more than we’ve managed at one time in the past.
SUB: What kinds of companies/sectors would you say are leading the way in technology innovation right now?
Rupp: Healthtech is one of the strongest industries today because they are focused on taking core problems and finding a better, or smarter, way to solve them. For example Biomeme, who participated in DreamIt Philly Health 2013, has developed the ability to turn your smartphone into a convenient, low-cost lab for quick DNA diagnostics and disease tracking in the field. Tissue Analytics, who is in our current DreamIt Philly Health class, is bringing wound care into the 21st century by turning your smartphone into a sophisticated imaging platform, helping clinicians make more informed decisions. Tissue Analytics, Biobots and the rest of our current DreamIt Philly Health class will be presenting at demo day on October 30.
SUB: You recently announced that the DreamIt Austin application period has opened up—tell me more about this program in particular in terms of why entrepreneurs might want to apply.
Rupp: We’re extremely excited to bring back the DreamIt Austin program for its third year running. The cycle will draw applicants from all over the country and the world to Austin for the three month program. Past DreamIt Austin classes have included companies from Brazil, Spain, Sweden, South Korea and Israel.
Teams in the program will focus on developing and executing the strategies that will create long-term business success, and they’ll receive $25,000 in Seed funding, highly personalized weekly meetings with hand-selected mentors, and more. Applications are due November 7, 2014.
SUB: What is the one primary piece of advice you would offer to entrepreneurs just starting out and building a new technology startup?
Rupp: Look at your startup scientifically. Focus on quickly identifying the key assumptions behind your business, and testing those assumptions as quickly or cheaply as possible. If you find they aren’t true, you need to figure out how to pivot so that you can get on track to becoming successful. If they are true, then you’ll have the proof you need to start building and selling, and you’ll begin building up the key metrics you need to start pitching your company to investors.