Instead of just getting free office space and credit toward classes like before, the company is upping the ante for the four companies that will join the spring cohort 2017 with a seed investment of up to$25,0000. There’s also an opportunity for follow-on funding. NextFab will take equity, according to marketing manager Laate Olukotun.
“NextFab’s $25,000 investment will be in the form of an S.A.F.E. instrument, which stands for ‘Simple Agreement for Future Equity,” said Olukotun. “Using this type of investment keeps legal costs low allowing for each company to spend more on de-risking their product to attract future investment. In short, no equity will be initially exchanged for entrance into the RAPID program. NextFab’s investment will convert to equity once a company raises an equity round of financing.”
It’s the first time NextFab is funding companies, which is of note.
“Upon acceptance into the accelerator, we develop custom plans for each team based on their specific needs and goals,” said Ken Tomlinson, NextFab’s CFO and venture services director. “This allows us to help teams maximize the value of the resources available at NextFab, including our advanced-manufacturing equipment, our team of engineers and designers, our new venture consultants and mentors, our network of industry and market contacts, and our connections to capital.”
The name RAPID, btw, is an acronym that stands for Revenue through Advanced manufacturing, Product development, Innovation and Design thinking.
— NextFab (@NextFab_PHL) January 19, 2017
Per Todor Raykov, NextFab’s venture services manager, the company is looking for teams who already have a physical prototype and an estimate of market size, but also, a “commitment to stay and grow in Philadelphia.”
At the end of the program, participants will pitch their ideas to a panel of entrepreneurs, advisors and NextFab staffers. Once they graduate from the accelerator, they can use their dedicated desks for three more months, with an option to transition to one of NextFab’s “business incubation offices.”
Here’s a look at the previous cohort, according to NextFab:
- GuestOf: a QR-code door-control system allowing for greater control of building access for multi-tenant residence buildings.
- Tory Surgical Solutions: a surgical tool tracking platform.
- Blue Sky Nano: an active water-testing platform utilizing microfluidics and graphene technology.
- Hacker Prep: “soft” IoT devices as entry level educational tools.
For NextFab, the accelerator seems like a good move. It’s a way to offer services outside the traditional makerspace model, as well as a customer acquisition tactic.