Accelerate Long Island is back in business, and it’s main private-investment partners are coming along for the ride.
The seed-funding business accelerator, which has been publicly quiet since awarding its 10th and final first-round stipend in December, has been awarded $3 million by Empire State Development to establish the Accelerate NY Seed Fund, with matching private investment planned.
Unlike the original Accelerate Long Island charter – through which Accelerate teamed with the Long Island Emerging Technologies Fund, a venture vehicle powered by Setauket investment firm Jove Equity Partners and Roslyn’s Topspin Fund to exclusively seed Long Island-based high-tech startups – the new fund will back deals across downstate New York, including the Mid-Hudson, New York City and Long Island regions.
The fund will invest up to $100,000 in pre-seed stage startups emerging primarily from university-based research, according to New York Ventures, the innovation-support program administered by Empire State Development, Albany’s main business-development engine.
Investments made by the Accelerate NY Seed Fund will be matched by private-sector investments at least dollar-for-dollar, according to ESD, which selected Accelerate through a competitive Request For Proposals process.
Noting “innovation and entrepreneurship are essential to the 21st century economy,” ESD President and CEO Howard Zemsky said Albany is optimistic about the new seed fund and the opportunities it will provide.
“New York State is providing critical resources to enthusiastic entrepreneurs across the state,” Zemsky said in a statement. “We are excited to partner with the Accelerate NY Seed Fund to support their pursuit of identifying downstate opportunities for high-tech growth, which will generate private sector capital throughout the regions.”
The fund has already established partnerships with the City University of New York and State University of New York systems to “conduct deal sourcing across the downstate regions,” according to ESD. The fund will also work with other research institutions and economic-development agencies to identify worthy investment candidates.
Mark Lesko, the executive dean of Hofstra University’s Center for Entrepreneurship and the former Accelerate Long Island executive director, said the new fund will build on Accelerate LI’s “proven track record of making investments in promising startup companies.”
“The $3 million award … will allow Accelerate Long Island to greatly expand its efforts in the downstate region,” said Lesko, who will co-manage the fund with Peter Donnelly, head of technology licensing at Stony Brook University.
The two will benefit from an advisory investment committee, Lesko told Innovate LI, and while the size and makeup of the group is yet to be determined, it’s expected to include Douglas Adams, director of CUNY’s Technology Commercialization Office.
“He’s not going to co-manage the fund,” Lesko said. “But we expect to be formally working with him as a member of our investment committee.”
As for those guaranteed matching investments, Lesko said the new fund’s modus operandi would closely resemble “the model established by the first Accelerate Long Island fund,” with Jove Equity Partners and the Topspin Fund serving as “our primary investment partners.”
“The core is very similar to the way Accelerate Long Island operated,” Lesko said. “But we expect to add additional funding partners, and we may add them on a deal-by-deal basis.”
While the Accelerate New York Seed Fund – one of several statewide pre-seed accelerators funded by ESD, including Buffalo-based Z80 Labs – is responsible for other locales besides Long Island, it is still very much an Island program, according to Lesko.
“What we’re doing is taking a model that worked very well on Long Island and moving it westward,” he said. “And this fund is still being managed by Long Island people.
“This allows us to expand the Accelerate Long Island economic model geographically, and that means we’re going to see a larger amount of higher-quality deals,” Lesko added. “Our hope is this will attract into the program professionals investors at many different levels.”