After a successful two-year run that brought more than a dozen early-stage technology companies to Portland, as well as global awareness to the city’s startup ecosystem, the Roux Institute is shutting down the Techstars accelerator.
(Disclosure: I worked for the Roux Institute Techstars Accelerator, as a contractor of Techstars, during its first year in 2021.)
The Roux Institute at Northeastern University last week informed Techstars, which it contracted to market and manage the program, that it was using an early-cancellation clause in its three-year contract to terminate the relationship after two years. Techstars is a Boulder-based company that organizes and runs accelerators around the world. Its current business model requires a corporate partner or quasi-governmental organization to fund the creation and ongoing management of the accelerator, which means that unless another organization stepped in to replace the undisclosed amount of funding the Roux was providing, Techstars would not continue to manage an accelerator in Maine.
Questions directed to the Roux Institute’s entrepreneurship and venture creation team were directed to a spokesperson for Northeastern University.
Marirose Sartoretto, Northeastern’s assistant media relations manager, sent Maine Startups Insider a statement that said the Roux Institute shut down the Techstars accelerator to focus on its own internal entrepreneurship programs, including its Founder Residency programs.
“We are proud of the work the Roux Institute at Northeastern and Techstars have accomplished together over the past two years. It has been a truly exciting partnership,” Sartoretto said in the statement. “Because of the rapid growth and success of the Roux Institute, we have built the capacity to scale this critical work in house. We are looking forward to growing the entrepreneurial ecosystem across the state of Maine.”
Northeastern’s statement cites the Roux Institute’s Founder Residency programs, as well as plans to run eight Start Summits across the state that will offer “engaging, low-barrier entrepreneurship immersion opportunities.”
Lars Perkins, who led the Techstars accelerator for its first and only two years, said he was “disappointed” in the decision, but looked forward to staying involved in Maine’s startup community.
Techstars accelerator a success by all accounts
The Roux Institute Techstars Accelerator launched in 2021 to great excitement and high expectations due to Techstars’ reputation for operating accelerators in the world’s most active startup communities and helping propel several companies to unicorn status ($1B+ valuation), including ClassPass, Digital Ocean, SendGrid, and Chainalysis. It was Techstars’ first accelerator in northern New England and helped raise Portland’s reputation as a hub of startup activity.
Over the course of two years, the accelerator hosted 20 startups. Three Maine companies—Omnic Data, Hey Freya, and Torque—went through the program, but the majority were from outside the state, including as far away as California, Washington, and Chile. Several companies, including Circa, Eskuad, Popsixle, and CICLA, relocated to Maine as a result of the program.
Techstars’ model includes investing in and taking equity positions in the companies it accepts into its accelerators. Techstars invests up to $120,000 in each startup, which purchases the right to 6% of the company, according to its investment terms. The Roux Institute, which paid Techstars an undisclosed sum to run the program, did not receive equity in any of the 20 startups that went through the Roux Institute Techstars Accelerator.
The Techstars accelerator’s second and final class of 10 startups wrapped up only last month with its Demo Day, the accelerator’s capstone event that provides a chance for the founders to pitch their companies in front of a live audience made up of friends, family, members of the startup community, and investors. Maine Gov. Janet Mills attended both of the accelerator’s Demo Days.
Lars Perkins, who founded the photo-sharing platform Picasa and was later an executive at Google, led the Roux Institute Techstars Accelerator during its first two years. He was, and still is, a Techstars employee.
“I’m disappointed to say there will not be a third Roux Institute Techstars Accelerator here in Portland,” Perkins told Maine Startups Insider. “I’m proud of what we accomplished these last two years, and am very grateful to all the mentors and supporters who selflessly donated their time to help the 20 companies that went through the program. Most importantly, I’m so appreciative of the support of the people of Portland and Maine who welcomed our founders, answered their questions, and helped grow their businesses.”
Perkins added: “Northeastern has been a great partner, and the 20 founders we’ve graduated will continue to be part of the Roux, Techstars and Portland ecosystems. I believe strongly in the Roux’s integration of entrepreneurship into their academic programs.”
Perkins said he personally looks forward to staying involved in the Portland and Roux ecosystems.
Roux Institute shifts focus to own programs
The Roux Institute, which itself launched in 2020 thanks to a $100 million gift from David Roux, has been developing its own entrepreneurship and accelerator programs alongside the Techstars accelerator for the past two years.
It has held what it calls its Founder Residency programs the last two years, during which time early-stage founders work out of the Roux and benefit from programming and mentorship tailored to helping startup founders scale their businesses. The Roux is preparing to launch its next Founder Residency program for female and BIPOC founders and another for healthtech startups. These programs last an entire year rather than Techstars’ intensive, three-month programs, and don’t require founders to be onsite the entire time.
Companies that have gone through the Roux’s Founder Residency programs include KinoTek, Forerunner, New England Marine Monitoring, Tanbark Molded Fiber Products, and Hey Freya (Hey Freya was also a member of the Techstars accelerator’s 2022 class). They have attracted some out-of-state companies, including Election Bridge and DeepCharge.
The Roux Institute is trying something slightly new with its Future of Healthcare Founder Residency, the aforementioned program for healthtech startups that is scheduled to begin in March. As previously mentioned, the Roux did not receive equity in startups accepted to the Roux Institute Techstars Accelerator, but it will indirectly receive equity in the startups accepted into its Future of Healthcare Founder Residency program.
To support the healthtech accelerator, the Roux created a fund and received $2 million in committed investments over the next three years from MaineHealth ($500,000 commitment) and Northern Light Health ($1.5 million commitment). MaineHealth, owner of Maine Medical Center, and Northern Light, owner of Eastern Maine Medical Center, are Maine’s two largest healthcare systems.
The 10 healthtech startups accepted into this program will each receive $50,000 and spend the next 12 months working out of the Roux’s Portland campus. During the year, they will have access to curated programming and mentorship; free business, design, and legal services; and opportunities to engage with clinicians, pilot projects, and explore research collaborations with MaineHealth and Northern Light.
In return for the $50,000 and the value of the services provided during the year-long program, the fund will receive 5% common equity stake in each company that participates in the program.
More details on how the Roux will operate the fund were not immediately available.
Conclusion
The Roux Institute Techstars Accelerator will be missed. The combination of Techstars, with its expertise running successful accelerators and its global network of mentors and portfolio companies, and the Roux Institute, with its commitment to investing in Maine’s startup ecosystem, world-class faculty, and beautiful space on Portland’s eastern waterfront, created a startup accelerator the calibre of which Maine had never seen.
While the Roux’s Founder Residency programs have been successful, it remains to be seen whether they will be able to meet the expectations the startup community had placed on the Techstars accelerator.
Writing as a member of Maine’s startup community, I sincerely hope the team at the Roux has what it takes to grow its Founder Residency programs into world-class startup accelerators that continue to raise our state’s profile as a hub of technology-driven entrepreneurial activity and propel our startup ecosystem into the future.
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