9Mile Labs started in January 2013 as a mentoring-focused enterprise/B2B startup accelerator in Seattle. The objective was to help companies build a business that was scalable, repeatable and profitable with the ideas they brought to us.
Since our founding in 2013, we have run 6 cohorts and invested in 59 pre-seed stage companies as part of the accelerator program. Many of these companies have gone on to raise subsequent rounds of funding while making great progress on their product and customer acquisition goals. The aggregate book value of our portfolio has consistently increased over the years as has the aggregate annual revenues of the portfolio companies.
In October 2016, in an effort to scale up the number of investments per year and reduce our overhead, we discontinued the accelerator program. Instead, we partner with top accelerators across the country to invest in their best startups.
Key elements of the new investment strategy are
- Invest in enterprise startups that are just entering their respective accelerator programs
- Make small investments of $50-100k in each company at a valuation of $1-3M
- Invest in companies with complete teams consisting of 3 roles - hacker, hustler and visionary
- Pick companies that have either growing revenue or demonstrated evidence of deep customer validation, such as Letters of Intent (LOIs).
Benefits of the New Model
There are numerous benefits from the new investment strategy. This investment strategy allows us to reduce costs (such as physical space, events, staff and other infrastructure). We are now able to partner closely with the growing numbers of accelerators and invest in a broadly diversified set of companies from all over the country.
This strategy also plugs a unique gap to support early stage startups and provides them funding before they raise their seed round of capital coming out of the accelerator program. We are also able to bring to bear the power of our world-class mentor network that we’ve built from Seattle’s thriving high-technology ecosystem.
Investing in startups is a challenging proposition. Investing in the earliest stage startups in an accelerator is even harder, since the path to positive outcomes is expensive, long and unpredictable. We believe we have embarked on a strategy that is broadly beneficial to entrepreneurs, other accelerators and to 9Mile Labs and look forward to making some great investments over the next couple of years.