The two young entrepreneurs did everything right to launch a startup company in Baltimore: They developed a bright idea. They won a local business competition. They networked.
But when it came time for Nick Miller and Adam Zilberbaum to take their business to the next level, the creators of Parking Panda — a smartphone app that helps people rent out their parking spots — took their fledgling company this month to the Big Apple.
What lured them away? A business accelerator that offered the pair $25,000, three months of office space in Times Square and the chance to schmooze with New York's high-profile entrepreneurs and venture capitalists.
"Having the opportunity in New York and not having one at all in Baltimore makes the decision a little bit easier," Miller said. "It's really a great opportunity to meet people who will help our business grow."
Baltimore might have had its own private accelerator in place this summer, but organizers couldn't pull together the necessary funding. Miller and Zilberbaum applied for it.
From Silicon Valley in California to Silicon Alley in New York City, business accelerators are drawing attention from venture capitalists and attracting startups striving to be the next Facebook or Twitter. For many fresh-faced entrepreneurs, such programs fill the gap between having a good idea and creating a working prototype.
Some in Baltimore worry that the city risks getting lapped in the race to lure promising entrepreneurs if the local technology community can't develop its own accelerator program.
Accelerators are "kind of a global trend," said David Troy, an entrepreneur and prominent advocate for Baltimore's technology community. "The challenge here is that there's really no reason why those guys [Miller and Zilberbaum] shouldn't be doing that here in Baltimore."
Accelerators are short-term, intensive boot camps, helping founders through the earliest steps of building a solid business plan and a prototype website or product.
In exchange for money and guidance, an accelerator company will give its investors a small stake, ranging from 4 percent to 10 percent.
They differ from business incubators, which might nurture an already focused startup for a couple of years and help it attract new customers.
The accelerator model is becoming "a vital part of any economic ecosystem," said Tom Sadowski, president and chief executive of the Economic Alliance of Baltimore, a regional economic development organization. "You have to be thinking about the next generation of industry and business. It's part of the vital infrastructure we have to have in place."
Most of the accelerators grabbing headlines these days are funded by private investors. The concept has spread beyond the usual tech hubs to cities such as Philadelphia and Boulder, Colo.
There are also publicly funded programs that are typically associated with universities, but they tend to be more focused on commercializing highly specialized research rather than, say, building Web applications for consumers.
The Johns Hopkins University, the University of Maryland, College Park, and the University of Maryland, Baltimore County each have their own accelerator programs.
The College Park accelerator is tied to the university's research and engineering programs, which encourage students to work on commercial applications. MTECH Ventures focuses on solving science and engineering challenges, program director Dean Chang said.
"We want to make sure we keep our best entrepreneurs here," Chang said. "Those are the people who will end up becoming the next angel [early-stage] investors."
In exchange for access to mentoring, lab space and research equipment, Chang said, the university takes a single-digit-percentage stake in the companies it helps build.
In Baltimore's entrepreneurial and technology circles, the environment for fostering startup companies has blossomed the past few years. There are several technology networking events and startup business plan competitions. Several alumni from one big company, Advertising.com, have gone on to form their own businesses, including Millennial Media, a top mobile advertising network based in Canton.
Entrepreneurs in the city and the state expect to see a boost in the growth of new businesses, thanks to Gov. Martin O'Malley's InvestMaryland program, which is authorized to pump at least $70 million into early-stage companies over the next five years. But the investments are to be put into more sure-footed startups, and not those entrepreneurs who may need the early hand-holding available in an accelerator program.
Many entrepreneurs saw the planned Startup City accelerator program for Baltimore as a missing link in the city's offerings for local technology entrepreneurs. But organizers Mike Subelsky and Monica Beeman couldn't persuade enough investors to pump in $15,000 each into the program.
