New Jersey is going to get its first financial technology (FinTech) incubator — in Jersey City, where Scivantage, a provider of information-enabled software for the financial services industry, is located. The company is collaborating with Stevens Institute of Technology on this endeavor.
The Scivantage FinTech Incubator will function more like an accelerator, with a formal 12-week program to support and accelerate the launch of next-generation FinTech products and to seed the FinTech industry with innovation.
Applications for the first incubator cohort should be submitted by July 3, 2014. An application is available here.
Scivantage is providing $25,000 in seed money; office space in its headquarters; mentorship; and sales, marketing and design support in return for what it calls a small equity investment, as is common for accelerator programs.
Scivantage also expects to sell and market the commercial products developed by the incubator companies.
Stevens students, faculty and alumni are encouraged to submit applications, but they won’t be favored. Companies in the incubator will be encouraged to recruit Stevens students as interns, however.
The school will be providing education and mentorship for the accelerator companies. In addition, it maintains advanced, cutting-edge technology at the Hanlon Financial Systems Lab that incubator companies will be able to use to develop and test their software.
Jim Tousignant, executive vice president of sales and business development at Scivantage and a serial entrepreneur, said in an interview that Stevens is a natural partner for the company. CIO Andrew Haines is a Stevens graduate, the school is located in Hoboken, near Jersey City and Scivantage has hired Stevens interns in the past.
An Entrepreneurial Approach to Education
Stevens has taken an entrepreneurial approach to education, especially since Nariman Farvardin became president. All freshman engineering students take Introduction to Entrepreneurship, a two-credit course that covers the basics of entrepreneurship and entrepreneurial thinking. The goal is to instill enthusiasm and entrepreneurship values in the students, said Christos Christodoulatos, vice provost for innovation and entrepreneurship at Stevens.
Christodoulatos added, “Scivantage approached us several months ago to work together and create a program with Stevens where we can develop ideas from our faculty, students and also their employees. Now we are opening this up to others.”
From Scivantage’s view, Stevens has a “strong set of academic and research projects around financial engineering and financial services,” Tousignant said.
Tousignant added that he had approached President Farvardin with the incubator idea at a New Jersey Technology Council (NJTC) Leadership Summit in September 2013, at which Scivantage CEO Adnane Charchour and Farvardin were honored.
Scivantage and Stevens hope to draw applicants from throughout the U.S. and beyond. Said Tousignant, the applicants may originate from anywhere, “but they must be in residence in the New York and New Jersey market during this program, to participate.”
As many as 10 companies per year will be selected for the incubator, Tousignant told NJTechWeekly.com.
At the end of the 12 weeks, Scivantage and Stevens will hold a Demo Day, with leading FinTech executives and investors in attendance.
Charchour has said that the concept of starting an incubator is natural to Scivantage, since the firm was built from the ground up. “Scivantage understands firsthand the challenges that startups face when launching a new financial technology company or product,” he noted.
Getting the Financial Services Industry Involved
Tousignant added that Scivantage expects to bring on its customers as incubator sponsors. “We think this will accelerate the idea of leading financial institutions becoming more innovative … getting involved in innovation programs that help the industry and help develop new businesses. … This will give our entrepreneurs a sounding board for making sure that the products and services they are thinking about and we are supporting actually have commercial interest,” he said.
The program will provide participants exposure and easy access to the “dynamic New York/New Jersey entrepreneurial scene, as well as leading financial services and technology firms and top venture capitalists and angel investors,” Scivantage said in a statement.
The company also expects to acquire the rights to sell and market the innovative new FinTech products the new companies will develop. “Frankly, for a budding new business this is a great advantage, since often where companies are challenged is in getting those first sales and … first customers,” Tousignant said.
Tousignant sees this as another way for Scivantage to create innovative new products and services. The company had developed partnerships and acquired new companies from time to time, he said, and this is a complementary program.
“The principal goal for us is over time to build out a portfolio of products and new services that we can sell and market to our customers. We are not a venture capital firm. We are doing this principally to get new innovations seeded and known. We think this is important for the whole industry,” he said.
Tousignant provided NJTechWeekly.com insight into how incubator applicants will be evaluated. For each 12-week cycle, an evaluation committee composed of Stevens faculty, Scivantage executives and those from outside the company will be selected. That committee will then study the teams, evaluating ideas for their creativity and founders for their experience with building a company and their domain expertise. “We need to have confidence that [an] entrepreneur can take an idea and bring it to fruition,” said Tousignant.
The ideas themselves are important, but the startups will also be judged by how far along those ideas are in the cycle. The incubator will be looking for ideas that can be further developed into commercialization during the program’s 12-week span.
“We need to be able to help them advance to the next stage of their evolution and develop their ideas into increasingly viable commercial offerings,” Tousignant said.