On Thursday, Austin entrepreneur Kirsten Dickerson will take the stage at a California venture capital conference to pitch her startup, a jewelry and apparel maker.
As she makes her case to investors, Dickerson will be using the script she honed earlier this year at Austin accelerator Incubation Station.
“I come from the nonprofit world, and before Incubation Station I had no idea how to how to talk to investors,” Dickerson said. “Now I can get up on a stage and explain why they should back our business.”
Unlike most of Austin’s growing list of accelerators and incubators that focus on technology, Incubation Station is designed for startups that sell consumer packaged goods.
Launched by a group of veteran Central Texas entrepreneurs in 2012, the mentoring program includes an intensive 14-week boot camp with mentors including Clayton Christopher, co-founder of Sweet Leaf Tea and co-founder and CEO of Deep Eddy Vodka; Leon Chen, co-founder and CEO of Tiff’s Treats; and Scott Jensen, co-founder of Rhythm Superfoods and former CEO of Stubb’s Bar-B-Q.
Mentor Dan Graham, CEO of BuildASign, which makes custom signs, banners and other products, said he wants to help entrepreneurs avoid making the mistakes he and his co-founders did.
“We made a lot of errors that very easily could have cost us the business, things we were ignorant about, like financing, and dealing with suppliers and vendors,” Graham said. “It’s incredible to see entrepreneurs come in with very little business background and leave talking about financials, cash flow and marketing plans.”
Participating companies receive up to $20,000 in cash, as well as professional services including legal counseling and accounting, sales and marketing support. In return, the incubator receives a 2 to 10 percent stake in each company.
The goal was to help nontech entrepreneurs connect in the way that Austin’s tech startup community does.
“We have a thriving industry in Austin, and people love investing in a consumer good that they can put their hands on and understand, but there was no organized effort to bring them together,” said Shari Wynne, co-founder and CEO of MWR Legal and managing director of Incubation Station.
Now Incubation Station is gearing up for its third annual program, with applications being accepted through Dec. 15, with classes starting on Feb. 4. It will culminate with a May 20 showcase where companies will make presentations and field questions from entrepreneurs and investors.
More than 100 companies applied for the most recent program, and six were accepted. This time up to 10 will be chosen.
New this year is a $100,000 fund that will allow Incubation Station, which operates as a for-profit business, to make investments of $25,000 to $75,000 in participating companies.
The fund was created by 10 incubator mentors who put in $10,000 each. The size is expected to grow as Incubation Station invites additional mentors to put money in.
Wynne said the fund allows Incubation Station to be the lead investor in its startups at a time when industry trends are working in favor of small consumer goods companies.
“Large companies don’t develop a lot of their own products anymore. Now they’re looking at people who have developed from the ground up — whether it’s artisan chips, organic shirts, vegan food — they’re watching them grow and they’re buying them,” she said. “That’s great for investors — we can put the money and the expertise in and make them attractive for the big companies to buy.”
None of Incubation Station’s 11 companies has been acquired yet, but collectively they have secured or are the process of raising more than $9 million in funding.
And some breakout candidates have emerged, including:
• Primzie, which sells crisp bread cracker chips and has expanded to almost 900 stores nationwide, including Central Market and Whole Foods.
• Verb, which sells hair-care products, has closed on $800,000 in funding and has distribution in the Midwest, East and West coasts through major beauty distributors.
• Criquet, which sells organic cotton golf and polo shirts, and will post revenue of nearly $1 million this year, up 400 percent from a year ago.
The program couldn’t have come at a better time for Dickerson’s startup, Raven + Lily, which was founded in 2008 as a nonprofit. It designs jewelry, accessories and apparel and hires women in Ethiopia, Cambodia, India and the U.S., most of whom are HIV-positive or were formerly enslaved or living in poverty, at fair trade wages to make the products.
In 2011, Dickerson and co-founder Sophia Lin decided to move to a for-profit model in order to build a sustainable business. Incubation Station’s program last spring helped them take the business to the next level, Dickerson said.
They examined all aspects of their business, working with advisers including Lee Valkenaar, co-chair of Whole Foods Market’s nonprofit Whole Planet Foundation, and entrepreneur Kendra Scott, CEO of Kendra Scott Design.
Now Raven + Lily, which has been funded by the founders and a few small loans, is seeking to raise $500,000.
“It has been giant huge learning curve, but we now are ready to go out and tell investors our story,” Dickerson said.