(Photos courtesy of NextCorps)
NextCorps has surpassed its goals since its arrival in downtown Rochester’s Innovation Zone in early 2018.
The nonprofit, which calls itself a catalyst for entrepreneurship and innovation-based economic development, aimed to nurture 100 startups over five years; in its first three years downtown, NextCorps supported 106.
With two accelerators under NextCorps’ belt, the outlook looks bright as it eyes a third possibility—a software accelerator—as another way to continue growing the regional economy.
Launched in 1987 as High Tech Rochester, the nonprofit had three founding members: the Greater Rochester Chamber of Commerce, Rochester Institute of Technology, and the University of Rochester. In 2007, NextCorps underwent a corporate restructuring and UR became the sole member. It currently employs a total of 28 full-time and part-time staffers.
NextCorps receives substantial financial support from Empire State Development’s Division of Science, Technology, and Innovation. Additional funding comes from the National Institute of Standards and Technology Manufacturing Extension Partnership.
In the year ended June 2020, NextCorps had $10,757,400 in total revenue and expenses of $8,395,628. Jim Senall, president of NextCorps, says the organization operates each year on a cash flow break-even basis. He expects revenues to top $12 million in fiscal 2021.
“We were very pleased to hold topline revenues to a similar level as fiscal year 2019, given COVID impacts,” Senall says.
In addition to growing incubation efforts, NextCorps has also expanded other programs with national and international scope, including the Luminate NY Accelerator, and our Scale for ClimateTech and Venture for ClimateTech accelerator programs, he says.
He attributes the incubator’s success to a solid team and community support along with work to fill gaps, better coordinate efforts, develop new programs that satisfy distinct needs. These steps have helped elevate Rochester’s “collective game to rival any other startup cities in the U.S.,” Senall says.
Since 2018, NextCorps has awarded $450,000 in Ignition Grants to 18 companies, facilitated 900 one-to-one meetings, and hosted more than 4,000 people at its events, public workshops, and webinars.
A key finding of a new NextCorps impact report is the fact that Rochester has more entrepreneurs with ideas for technology startups than estimated, Senall says.
“This is fantastic news, since according to studies from the Kauffman Foundation and others, it’s young companies that create a disproportionate amount of job growth in the U.S.,” he says. “So, the more new companies our community can help get off the ground, the better our long-term prospects are for economic growth, creating job opportunities and retaining talent.”
On NextCorps’ 2020 list of incubating companies and associate members are more than 60 companies, including Leep Foods, which won third place last year in the Grow-NY food and agriculture competition, and WexEnergy, which also has garnered attention.
“Compared to 10 years ago we’ve come a very long way. And seeing the recent successes of companies like Datto, Cloudcheckr, AeroSafe Global, and many others, demonstrates that you can scale here, and investors from outside the region will invest here,” Senall observes.
At the same time, he acknowledges that there is no silver bullet to growing the crop of successful startups in the region. It requires a robust ecosystem.
“It’s a marathon and not a sprint, but we are well on our way,” Senall says. “As we collectively support more and more entrepreneurs going forward, we will need to attract more investment into programs and services—support that helps founders overcome the challenges that can impact their success rate.”
He points to Scale for ClimateTech as an example. Part of NextCorps’ Cleantech Accelerator, Scale for ClimateTech helps startups refine their design, fulfill first orders and take other steps related to entering the marketplace faster. Its new cohort features nine companies in need of manufacturing assistance.
“Many companies fail when transitioning their prototype into mass production. We’re one of four programs that we know of in the country that offer founders manufacturing support in this area,” Senall says. “We also need better connections to willing companies that could be first customers for these startups to validate their new products and services, or that are willing to take on the manufacturing or supplies aspects of initial small runs as the startup ramps up sales.”
NextCorps is known as one of the highest-performing hubs for the Manufacturing Extension Partnership in New York. In the 12-month period ended October 2020, NextCorps completed 152 projects with 136 manufacturers in the nine-county region. In its report, NextCorps says it generated an economic impact of $137 million and created or retained 737 jobs through MEP.
This year, as part of MEP, NextCorps will work with Catalyst Connection, which serves Southwestern Pennsylvania, to provide training, education and other support to help companies move from prototype to commercial product.
On the optics, photonics and imaging front, the Luminate NY accelerator has successfully completed its third year; all 30 startups are still in business, with a combined portfolio valuation of $160 million. It has raised $26 million in additional investments with 80 new jobs in the region. Twenty-five contract manufacturing jobs were supported by the accelerator’s work. At the close of recruitment for its fourth cohort in January, Luminate NY had received applications from 126 startups.
As he looks ahead, Senall would like NextCorps to continue to evaluate best practices and stay connected with needs of its client companies to provide appropriate support, including filling gaps related to evolving market demand. Two-thirds of its 65 incubation companies are software-related, for example.
“To help support that demand we are in the process of starting up a software-specific accelerator program to provide more robust support for software entrepreneurs,” Senall says. “We also continue to evaluate new models, like startup and venture studios, which can combine private-sector and nonprofit sector benefits.
“To help us continue furthering our mission, NextCorps is always looking for additional partners, mentors, and investors who are passionate about helping local companies and building an engine of growth.”
Smriti Jacob is Rochester Beacon managing editor. She assists with RocStarts.com, an informational resource for entrepreneurship in the Finger Lakes region, administered by NextCorps.