Innovation is a drumbeat pounded into the head of every CEO in 2017. While creating it internally is ideal, looking outside your organization is often a necessity. This means investing in a tech startup, and it isn’t restricted to the Intels or the Googles of the world.
Getting in the startup investment game does not have to be as intimidating as it sounds. Find an accelerator that serves your industry—and don’t be afraid to look outside of Silicon Valley.
Take the case of Grinnell Mutual Reinsurance Company. Grinnell Mutual is a 100-year old company headquartered in Grinnell, Iowa, a town of less than 10,000 people. In 2016, Grinnell Mutual led investment in seed-stage financing rounds for two insurance technology startups: one which analyzes truck driver performance, and one which helps insurance agents more effectively market themselves online. Grinnell Mutual plans to deploy the startup’s technology in its own business, and believes the technology has the potential for further adoption in its industry.
Both startups came out of the Global Insurance Accelerator, a startup accelerator in Des Moines, Iowa, which just welcomed a new class of startups from Belgrade, Boston, Detroit, Munich, Toronto and Tucson. The Des Moines metro area is a national insurance hub, and the accelerator was formed to benefit from the mentorship the insurance companies in the area could provide.
These specialized startup accelerators are forming across the country, usually near high concentrations of the industries they plan to serve, and in places with lower overhead costs than the Bay Area. In Iowa alone, there are five operating accelerators with two additional accelerators under development. The two new accelerators both will seek to foster tech companies that serve the agriculture industry—which makes sense in a state that is the number one producer of corn, eggs, pork and soybeans. Being located away from the deep pockets of Silicon Valley venture capital means startups in accelerators like these can be more accessible for smaller investors.
Furthermore, some states in places with nascent startup scenes are offering creative programs to encourage investment in their companies. For example, the state of Iowa offers a tax credit program for investors in Iowa businesses that meet certain requirements.
This mixture of accelerator specialization, potentially undervalued startups away from the coasts and state incentives makes seed investing more accessible for CEOs looking for innovation. Find out more at iowaeconomicdevelopment.com.