We launched that in 2000, I guess 2009.
And I've been in and about this cyber security industry really since that time.
Either you know, consulting to cyber security companies, running them,
raising more for them.
For them, you know, a variety of different capacities.
>> Right, right, very interesting.
So, MACH37, tell me about what you guys do and
what benefits you provide the entrepreneur, that type of thing.
>> So, the purpose of the accelerator is to
launch disruptive cyber security product companies in the strategic relevance.
Of this area is this you know, more than any other place on the earth.
There are individuals that are running around with deep domain expertise,
particularly as it pertains to the threat.
>> Right.
>> We have whether it's work that's going on inside the intelligence community.
Inside DOD or, or
a federal civilian sector whether it's you know the intelligence that's been gathered
in the commercial sector by companies like Mandiant that are based in this region.
>> Mm-hm. >> We have that expertise more than
any other place on the earth and, and
we're harnessing this that by bringing those other.
That are critical to successful startups.
That would include taking tech, what are mostly technical entrepreneurs and
imbuing them with a vision for an early-stage business.
We have a curriculum that we teach these entrepreneurs what your company needs to
look like in six weeks, in six months, and ultimately through exit.
We have built an extremely robust mentor network that
includes seasoned executives that may be on the buyer side so I would say your
Fortune 100 are former Fortune 100 >> Mm-hm.
>> We have successful entrepreneurs that have been in this industry and.
You know, sold for
multi-hundred million dollar exits, that are advising our companies.
And we have, industry analysts that are really shaping that market and, and,
you know, defining what the market is that work with our,
our entrepreneurs, you know, on a, a daily or a weekly basis.
And so we've, all of that expertise is available to the entrepreneur customers.
Also, you know, access to, and
importantly, access to customers that are willing to say-
>> Mm hm. >> I have a problem you're trying to
solve, I like your approach and I'll, I'll partner with you,
with you through your alpha and beta.
Ages of, of software development.
All those are extremely critical pieces, and then finally, you know, access to that
early-stage capital, which is, if you've ever done a startup, and I know you have.
>> Oh, I have, yeah. >> It's hard.
It, you know. >> Yeah.
>> Especially for, you know,
where we've [CROSSTALK]-
>> Thank you, by the way.
>> [LAUGH] >> because I've said 100 times on
these video lectures, raising capital is hard.
>> And it, and, you know, it's it gets easier at your second and
third time around.
Good for, for where we specialize or mostly first time entrepreneurs.
There's some exceptions to that but, it's hard.
You don't have the credibility of,
of bringing a return on investment to the investor community and
getting those those first seed round investors in, takes a lot of work.
You have to borrow a ton of credibility from other people to
believe in what your doing and we really do facilitate that.
>> Right. So how, I mean, do you,
you make an investment within these companies?
>> We do. >> And, and, and
fund them with some cash, I understand.
>> We do.
>> and, and then.
So the purpose of that is to hopefully generate value that you can
continue to do this thing into the future so that maybe you can supplement some of
the funding coming out of the Commonwealth, maybe.
Perhaps, I don't know.
>> That's so abso, actually I'm committed to that.
>> Okay.
>> I absolutely want this this operation to be self sustaining.
Currently we were funded, seeded by the Commonwealth.
>> Right. >> The expectation by the Commonwealth is
that I'll find private sector sources for that.
We are in the midst of, of that campaign now with I'll just say I've,
I've been humbled by the level of interesting.
>> Right. >> That,
that we've gotten by the commercial sector that wants to
align let's say large multinational brands-
>> Yes. >> With security innovation and,
you know, it's a good to, you'd be doing that.
>> Oh, yes. >> [LAUGH]
>> Security's
a good market.
>> Right. >> For sure.
>> So and we're doing that, you did mention that we do make an investment.
>> Yeah. >> Our economics are,
are pretty standard, we make a $50,000 investment.
>> Okay. >> We take 8% for that investment.
We work diligently, or some would say exhaustively.
>> Mm-hm.
>> With our entrepreneurs for, through a 14-week program, really imbuing them.
And with that, vision for, a business that venture funders or seed funders
are going to, feel comfortable about >> Right.
>> It'll be familiar to them, and and
then as we help them raise, additional funding we'll also if, when they raise,
their first hundred thousand dollars from a, a, season investor.
>> Right. >> Will match another $100,000
investment >> Ok, okay.
>> In that company.
The, the $50,000 is interesting and the economics have been interesting.
I think, we, the, there's an implicit valuation when you
take eight percent on a $50,000 investment.
>> Right, I'm hoping that my students are out there calculating
>> Yeah, it's, the math is easy, right?
>> Post-money valuation. Based upon our, our-
>> Yeah, pre and push, right?
>> [LAUGH] Right.
>> that, so post money evaluation, $625,000.
>> Right. Yeah.
>> The all of the companies that we invest in are worth more than that.
>> Mm hm. >> They know it and
we know it and we don't argue about it.
>> Right.
>> We we also-
>> It's the cost of them getting into the [INAUDIBLE].
>> That's right, and so
we also we also know that the value of the program is, is worth more than that.
And so really, part of our DNA, and
I think where we have probably surprised ourselves or sort of outdone our
own expectations is in the expectation that we are going to create more value.
For those companies, then we're claiming in that 8%.
>> Mm-hm.
>> And all I'd say is all you have to do is check Twitter for
the companies that have gone through the program and
without a doubt everyone feels like they got a good deal.
>> Yeah. Well, accelerators are, I mean,
the data out there suggests that companies that go
through accelerators do much better than companies who don't.
So. >> I've, I've seen some of that data, too.
>> Yeah.
>> So I'm no expert on accelerators, I'm an expert on ours.
>> Right.
>> And our company's are doing very well.
>> Right. >> Yeah.
>> So how do I get into you,
to MACH37, if I'm an entrepreneur who has a cyber security solution?
What do I have to do to, to be accepted into the program?
>> So there's an application process.
We generally batch our acceptances.
We run two sessions a year, one in the Spring, one in the Fall.
You really can apply any time, and, and if you apply early, we'll actually, you know,
start cultivating the relationship with you early, but the program itself is,
is that we run in the Spring and the Fall is, is pretty.
Demanded and we, you know, expect our participants to be there, you know,
for most, if not all of it and so, there, you know,
that's generally what we are sort of driven by, that, that schedule, where we
will, you know, focus on the cohort that we have, if we are that 14 week period.
And then when, once they graduated with a demo day,
then we'll really start focusing on bringing in the next batch.
>> Right. And there's a pretty competitive, I mean,
there, are there a lot more applications than actually get into the cohort?
>> Absolutely.
>> Yeah. >> It's, it's-
>> So. >> It's and it's gotten more competitive.
We get applications from all over the world.
>> Okay.
>> The I will tell you, we've made 17 investments so far.
>> Okay. >> Of those,
seven have not been from this region, so we did recognize that there's a lot of
intellectual capital here that that could birth disruptive companies.
But that intellectual capital exists in other places as well.
And just, just in the U.S. we've invested in companies from Austin from Montana,
from Palo Alto Florida, all over.
And then we've we're also getting applications from.
We've actually invested in a company from Berlin.
We've gotten applications from Turkey, from Morocco.
From the UK, from Australia, and I don't see that trend subsiding at all.
We, we generally built a global reputation for being the place to go for