The independent student newspaper of Northeastern University

The Huntington News

The independent student newspaper of Northeastern University

The Huntington News

The independent student newspaper of Northeastern University

The Huntington News

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IDEA named fifth largest investor

IDEA+named+fifth+largest+investor

By Jose Castillo, inside columnist

Marketing firm PitchBook Data Inc., dedicated to providing the latest data on venture capitals, recently listed Northeastern University’s venture accelerator IDEA as one of 2015’s most active investors in Boston companies.   

Earlier this month the firm released several data graphics displaying venture capital (VC) activity across the US in the previous year. IDEA was tied for fifth in most active investors within the Boston area, alongside global companies including MassChallenge and Atlas Venture.

IDEA chief executive Annika Morgan said she was pleasantly surprised by the achievement.  

“We were definitely curious about how [Pitchbook was] measuring us, given that we were ending up on a list with some really big names,” Morgan said.

According to PitchBook’s website, survey criteria was solely based on the number of active investments, which Morgan stated may have led to IDEA’s high ranking.           

“The report measured quantity of investments, and not how much money [was invested],” Morgan said. “In a year, IDEA invests in 20 early stage ventures, and that’s why our quantity is up really high; we only invest $10,000 at a time, as opposed to any of those larger firms that invest $500,000 to $6 million at a time.”     

IDEA isn’t a venture capital firm, she added, but instead a venture accelerator, dedicated more to developing ventures and providing learning opportunities, funding and receiving advice from experts within the Northeastern community.         

“It’s cool that our frequency matches pace with some of those larger firms … those are some of the top firms in the nation,” Morgan said.            

Over its six years on campus, IDEA, one of the first venture accelerators established at a university, has assisted 800 teams with their projects. Forty of those ideas have launched successfully, each raising more than $200,000 in seed funding from outside companies. Altogether, these ventures have raised more than $46 million from various investors.            

The program operates on a “stage-gate” process that consists of three steps: Ready, Set and Go.

“Ready” establishes the marketability of a product, and if approved, the product goes into the “Set” stage, in which the business model is created. After a business plan is finalized, the venture must pitch again, and if successful, moves on to the final stage of “Go.” In the “Go” phase, the startups receive gap funding.

Ventures to come out of IDEA include Fresh Truck, a fresh food mobile supermarket; The Handle Bar, an indoor cycling studio in South Boston; and more. Senior business administration major Connor Russo founded his startup Mealtime, a web app designed to help users create meal plans that use 100 percent of a grocery list, with support from IDEA.

“A lot of people went and watched people go grocery shopping, and found that people shop pretty inefficiently; a third of the cart goes to waste,” Russo said. “So what we do is create optimized shopping lists that you can use 100 percent of in three recipes.”             

Russo, who is preparing to launch a beta app on Feb. 1, praised IDEA for its overall support during his time at the program.            

“It’s really hard mentally,” Russo said. “A founder’s main job is managing their own psychology, and having the mentors here is what really gave me perspective.”

Ali Kothari, a junior finance major and co-founder and chief financial officer of New Grounds Food, another IDEA-backed venture, also praised the program.

“The support that IDEA gave was very beneficial, and they are always supporting us when they can,” Kothari said.

New Grounds Food sells trademark CoffeeBars, an all-natural energy bar containing a serving equivalent to one full cup of coffee.             

IDEA will continue to be an asset for students to reach full entrepreneurial potential, and remain competitive when compared to larger VC companies, according to Morgan.

“We judge ourselves on learning, and on that the ventures coming out of the program are revitalizing Northeastern community,” Morgan said. “They’re hiring Northeastern co-ops, they’re hiring Northeastern undergraduates full time, and so it’s a really, really valuable ecosystem within the Northeastern community.”

Photo by Nola Chen

 

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