ARK Challenge Readies for Third Installment

by Mark Carter  on Monday, Jul. 7, 2014 12:00 am  

The ARK Challenge launched in 2012 and its third installment will begin next month in Fayetteville. (Photo by Beth Hall)

The third installment of the ARK Challenge startup accelerator in Fayetteville, scheduled to run for three months beginning later this summer through September, will be leaner and meaner.

While no one expects genteel program director Jeannette Balleza Collins to crack a mean whip, or any symbolic whip for that matter, "ARK 3" will run with a tighter focus than its predecessors. The first two installments of this tech-based startup boot camp were federally funded, part of the $37 million Jobs & Innovation Accelerator Challenge. The inaugural run in 2012 included 15 teams from across the state, nation and globe, and the second featured 10. Each startup team accepted into the ARK received $20,000 in seed funding. Three winners were named following each run, and each received $150,000 in prize money.

This time, the ARK will fund just five teams, seed each with $50,000 and provide winners with beta contracts in lieu of cash prizes. While all but three ARK alumni startups still are in operation, Collins said the idea going forward is to attract more mature startups in the retail and logistics sectors.

The federal run is over, but the ARK is moving forward with state and private resources. A fourth installment is planned for the fall in Little Rock and will be led by Warwick Sabin, director of the Arkansas Regional Innovation Hub. The Arkansas Economic Development Commission is providing $300,000 for operating costs, and Innovate Arkansas, a program of Winrock International and AEDC, raised $800,000 in private funds for the ARK's 2014 runs.

This summer, 70 startups representing 12 countries and 16 states applied for the ARK's third installment, which will be based out of new office space shared by the ARK and Startup Junkie Consulting on the square in downtown Fayetteville.

Currently, ARK program staff has narrowed down the list of 2014 summer applicants to 10 semifinalists. Collins said staff members are working with industry advisers to select the final five who will be invited to northwest Arkansas for the program.

"The winnowing process was very difficult this year," she said. "The program staff intentionally recruited for more mature startups this year with teams who have had an established history with working with one another, have exhibited traction in their existing business and/or for a new product, as well as who are coachable."

That's a bit different from previous ARK teams, some of which were very early stage startups. Collins said program organizers wanted to find startups ready to provide scalability and returns for ARK investors.

"We always want to provide more value than we capture for our founders, our investors, our mentors, our industry clusters and our ecosystem," she said. "We want to incorporate our learnings from past experiences, consider our resources and do our best to select the right mix of founders to whom we can deliver the greatest value."

This year's ARK is taking on a more big-picture perspective, keying in on solving problems in the region's key cluster industries and helping raise the state's competitiveness on a global scale, Collins stressed.

"From an ecosystem perspective, we always are looking to attract, retain and develop talent, as well as facilitate capital formation for companies at every stage of the funding continuum," Collins said. "The startups we select this year, we hope, will create future jobs over time, inspire future entrepreneurs with their incremental successes and yield future exits, as well as future mentors and future investors."

The ARK was one of just 20 programs selected nationwide for the Jobs & Innovation Accelerator Challenge, and its first two years produced a fair amount of good publicity and general buzz about the NWA startup ecosystem and even for the state as a whole.

Collins noted several new organizations and programs that have sprung up and complemented the ARK, including the Natural State Angel Association, the NWA Entrepreneurship Alliance, G60 pitch contests, the Arkansas Angel Network, 1 Million Cups, the Arkansas Fellowship program, Noble Impact and new meetups devoted to women founders, student entrepreneurs and more.

"We have had an explosion of interest in giving back to the ecosystem via our state's growing mentor base, and it has been heartening to see the momentum growing across Arkansas," Collins said. "The talent here is abundant, and we love meeting new founders and aspiring entrepreneurs with every new inquiry or event. Additionally, we are seeing interesting inbound interest from outside of the region and state from all sides — new companies, venture investors and economic developers."

Organizers would like to see the ARK continue past 2014, and that all boils down to securing future funding.

"With every new installment of the ARK, there are two main needs for funding: program operations and private investment to seed the selected companies," Collins said. "Right now, we are focusing on delivering two successful ARK Challenge programs in 2014, and just as it is true for the startups we accelerate, we are running the day-to-day operations, raising funding, evolving with small, fast learning loops and looking for our next best iteration based on those learnings."

 

 

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