[NJTW is out of the office for a few more days. We are re-posting this article, which was our most popular article in 2016 so far.]
Brainchild of Jared and Dave Sorin, Veterans of the New Jersey Tech Community
In a move that could significantly strengthen the tech startup ecosystem in New Jersey, Dave and Jared Sorin, a father and son team and avid supporters of the New Jersey tech community, have unveiled entreprenYOURS, a one-stop source for access to information, networking, and financial and professional services for entrepreneurs.
Not quite an accelerator or an incubator, but similar to both, the entity will have a unique financial model that features cross-ownership of companies to give startups incentives to actively collaborate with, and enjoy the potential upside of, each other. The organization begins soliciting startup members today at entreprenYOURS.com.
Where a typical accelerator might provide mentorship, advice and guidance to its member startups, entreprenYOURS takes this to a higher level. In addition to these valuable services, membership in entreprenYOURS will have the added benefit of an equity stake in entreprenYOURS itself. The entreprenYOURS entity will in return secure an equity stake in the tech and tech-enabled startups and emerging growth companies that are selected for membership.
Novel Cross-Ownership Model
According to Dave, this should prove to be a model that will not only mitigate risk to investors and entrepreneurs, but also enhance the likelihood of success, increase diversification and encourage its members to support one another.
Added Jared, “cross ownership will provide and encourage collaboration to empower an ecosystem of tech and tech-enabled companies, each incentivized to help fellow entreprenYOURS because their success has a tangible benefit to everyone.”
Many accelerators can provide some of the elements of the new entity, “but the mutual benefit and cross-collaboration aspect is new and novel from everything we’ve seen in the market, and really distinguishes entreprenYOURS from a garden variety accelerator program,” he added.
The first class of seven-to-10 entreprenYOURS companies is expected to operate in New Jersey and New York. An independent group of advisors, which includes serial entrepreneurs and leading venture capital investors, will assess the applications, the founders said.
This board of advisors includes Brett Topche, managing director at MentorTech Ventures (Philadelphia, Pa.); Alex Katz, partner and CFO at ff Venture Capital (Hoboken); Frank Rimalovski, executive director of the NYU Innovation Venture Fund & Entrepreneurship Programs; Katherine O’Neill, executive director of Jumpstart NJ Angel Network (Mount Laurel); Greg Besner, founder and CEO of CultureIQ (New York, NY) and serial entrepreneur with several successful exits; Marc McCabe, executive director of the national sales and marketing team at Crystal & Company (New York, NY); and Asael Meir, partner and leader of the technology and life sciences industry practice at CohnReznick (New York, NY); in addition to Dave and Jared, both of the law firm McCarter & English (East Brunswick).
EntreprenYOURS was made possible by the generous sponsorship of some of the leading, best-of-breed service providers in New York and New Jersey, including CohnReznick, Connected VC, Crystal & Company, McCarter & English, and Phone.com, the Sorins said.
Roots in the New Jersey Tech Community
Dave’s roots in the New Jersey tech community go back to before the founding of the New Jersey Technology Council in 1996; in fact, he was one of the cofounders of the NJTC. When the New Jersey tech community needed money for growth, he helped form the NJTC Venture Fund and thereafter helped found Jumpstart New Jersey Angel Network, an angel group. Jared grew up active in the entrepreneurial community and, after law school and an initial stint practicing exclusively in New York, decided to become active in creating and nurturing an environment that is hospitable to entrepreneurial success.
The two Sorins are very active not only in the New Jersey, New York and regional tech communities, but, through their law practice (Dave heads the venture capital and emerging growth company practice at McCarter & English and Jared, who decided early in his legal career that he wanted to represent tech and tech-enabled companies, is an associate at the firm), they support the tech meetup community as well, offering financial support, thought leadership and programming for multiple meetups, and assisting aspiring entrepreneurs on a regular basis.
In an interview with NJTechWeekly.com, Dave said that the idea for this new entity came from discussions the two had had about the problems facing the tech startup community in New Jersey, but noted that it was mostly Jared’s idea. Jared denied this. In fact, the two often brainstorm ideas, as both have entrepreneurial inclinations, like the founders they represent in their legal practices.
“We recognize, as is true for all startup companies, that those with whom you surround yourself will tremendously impact a company’s likelihood of success,” Jared said. “Our entreprenYOURS will be surrounded by leaders in the industry, including approximately 60 mentors who lead, participate in and serve the entrepreneurial community.
Regarding New Jersey specifically, Dave recognized that “New Jersey has an incredibly strong technology community that often succeeds in spite of itself.
“One of the biggest challenges we face is the absence of a true center of commerce in our region. Technology is all over the state, and there is no glue that holds tech companies together in one physical space like there is in Silicon Valley or the Route 128 corridor outside of Boston that achieved fame in the 1980s to date. Executives from companies in these areas rubbed elbows with each other, interacted and collaborated.”
Coworking spaces like Mission50, JuiceTank, Cowerks and Bell Works’ ViHub, in New Jersey, and WeWork and others in New York, are creating centers of influence. “We hope to partner with these excellent coworking spaces to provide colocation services and solutions for members of entreprenYOURS,” said Jared.
Resources to Accelerate and a Way To Diversify Risk
In addition, tech startups frequently face substantial hurdles in finding and determining which resources to use and rely on to accelerate their businesses successfully, a problem that entreprenYOURS will address, Jared stated. “Forming a company and implementing a strategy is often very intimidating for a would-be entrepreneur. Having the legal background, the connections and the contacts with service providers and others, we knew we could bring together these critically important resources to help startups.”
He said that the new entity would provide direct access to leading professionals — lawyers, accountants, insurance consultants, employee benefits specialists, finance people and more — who have dedicated their careers and continue to do so to early-stage entrepreneurs and the investors who support them. “By understanding the market, we know what is necessary to be successful, and are fortunate to have developed the connections and resources to assist. This knowledge is powerful and it is what so many of the accelerator programs provide.
“But entreprenYOURS seeks to do more than just that. We came up with a platform by which member entrepreneurs can both diversify their risk and enjoy the upside of being affiliated both economically and otherwise with their fellow members.”
As stated above, each company that’s selected for entreprenYOURS will receive an equity stake in entreprenYOURS, and entreprenYOURS will receive an equity stake in each member company. “This structure will help provide all the members the potential upside of every other member, and to us this is a clear risk-diversification mechanism to offset the risk and enhance the overall risk/reward profile of starting a new business,” Jared said.
Added Dave, “We seek a 5 percent equity stake. We believe that we are going to add significant value and enhanced network effect, but we are not going to try to maximize our stake in any of these companies because we believe in the long term that everybody’s interests will be better served if everyone is willing to be more flexible in how they approach this.”
The fact that every member company will receive an equity stake in entreprenYOURS is what differentiates entreprenYOURS from all other accelerators.
The companies that participate won’t be offered free workspace, as is often the case in traditional accelerators. Dave pointed out that there are many options for coworking spaces out there for these companies. However, he anticipates that many of them will choose to colocate. One goal is to find companies with complementary services, solutions or products to group together within an entreprenYOURS class, so the benefits of collaboration can be heightened and maximized.
Also, member companies will not be required to use the same service providers. The entreprenYOURS organization will, however, provide access to leading accountants, banking organizations, lawyers, human resources professionals, public relations providers, marketing experts, business consultants and the like. “They’ll have these preferred advisors available who will be able to sell a productized solution to the startups on a much more cost-effective basis than they could otherwise obtain. That will benefit the companies who join us,” Dave said.
“We will only allow best-of-breed service providers to join,” he added. That way, the startup founders won’t have to spend time trying to separate the wheat from the chaff.
Best of Breed Service Providers
“We know the accounting firms in New Jersey that are truly committed to the entrepreneurial enterprise. We know the law firms that are truly committed, we know the banks. We have an understanding of, and relationships with, the venture capital funds to be able to provide the right kinds of introductions,” he continued.
Jared and Dave said they are thrilled with the level of interest they have received when speaking with potential mentors, including leaders from six active venture funds in the region; angel investors; serial entrepreneurs with numerous successful exits; and representatives from leading accounting firms, law firms, and the like.
Many early-stage companies “mistake activity for progress,” Dave added. They don’t know whom to contact, so they (or sometimes their advisors) throw everything against the wall to see what sticks. “This is a terrible productivity and time suck when those of us who have been in this marketplace can more readily help them fine-tune their search,” he said.
The entreprenYOURS founders plan to overcome the very isolating experience of being a first-time startup entrepreneur by creating a structured process for networking and interacting. “We are going to do regular events and group collaboration panels to help provide the resources, networking and discussions they need to get to know one another and see how they can complement one another in their different businesses,” Jared noted.
Dave and Jared invite you to learn more by visiting the website, http://www.entreprenYOURS.com, where you will find additional information about the program, the advisors, mentors and events, as well as an application to join the first class of entreprenYOURS, or to email them any questions or comments at firstname.lastname@example.org and email@example.com.