For UpRamp, the CableLabs-backed program, the benefits go both ways – the startups selected get some valuable exposure with cable operators and some guaranteed commercial deals, and, in exchange, UpRamp gets a small stake in the startups that are selected.
“[W]e ask for a 3% equity stake as warrants in each private company in the program,” Scott Brown, VP of technology outreach at CableLabs and managing director at UpRamp, explained via email to an inquiry about the investments. “We find this is small enough to be practical for companies this scale, but big enough to make sure that all interest are aligned. We do not view this as a profit center, but rather a way to make certain that all sides have skin in the game.”
Those arrangements are also clearly stated on UpRamp’s application web page, which makes note of the 3% equity take, that it funds up to $120,000 per team, and it funds four programs per year. “This is about doing deals, not demo days,” it explains.
He noted that the percentage is flexible for public companies that participate in the UpRamp program. For example, Edgewater Wireless, an Ottawa-based maker of high-density WiFi silicon that was one of the first four startups recently selected by UpRamp for its “Fiterator” program, announced it would issue 3.02 million shares (or roughly 2.1% of shares) outstanding in the form of warrants at $0.375 per share, with a forced conversion if shares trade above $0.45 for ten days.
UpRamp, an accelerator program launched earlier this year as an “executive MBA for startups,” also selected MediaHound (personalized video search and discovery); VelociData (advanced data services); and Trinity Mobile Networks (focused on the integration of WiFi and mesh networks alongside cellular connections).
They’re on board for a three-month, non-resident program that meets every other week in Boulder Colo., where the companies will be paired with paired with “C-level” executives and subject matter experts.