Hundreds of local startups this month are competing to be one of 10 companies that will participate in the 2011 Excelerate Labs program.
While the price for those selected is not insignificant - six percent of equity in exchange for up to $20,000 and 13 weeks of entrepreneurial boot camp - the payoff is potentially immediate and immense. According to Excelerate CEO Troy Henikoff, eight of the 10 startups that graduated last year (the first year of the program) have raised a combined $6 million while creating approximately 60 new jobs in the process.
One of the company’s at the head of Excelerate’s first class is edulender, which helps students search for and select college loans. The 6-person company, which is based in the Clybourn Corridor on Chicago’s north side, recently raised $1 million in its first institutional round of venture capital financing.
“Most of the fundraising relationships came from Excelerate,” said edulender co-founder and CEO Sue Khim, who is 24, grew up in Hyde Park, and dropped out of the University of Chicago her senior year partly because of her own student loan issues. Series A investors in edulender include Hyde Park Angels, San Francisco-based Kapor Capital, West Loop-based Sandbox Industries, Chicago-based New World Ventures, and Excelerate co-founder Sam Yagan (who recently sold his company OKCupid to Match.com for $50 million).
Khim describes edulender as “the TurboTax of student loan consolidation.” The company pulls together offers from more than 250 pre-screened lenders and lets students search around for free. Premium services that assist in the loan assessment and application process range between $20 and $200 a pop.
Khim said she plans to invest proceeds from the round into hiring and product development. She also has pointed advice to companies hoping to participate in the 2011 class.
“Even if the product is really early, it helps to have something to show,” she said. “Actually getting started, not just having something on paper but demonstrable execution is really important.”
Companies have until March 18 to apply. For more information, visit exceleratelabs.com.
GrubHub orders up $20 million round
Less than six months after raising $11 million from top tier venture capital firm Benchmark Capital, Chicago-based online restaurant delivery company GrubHub just raised $20 million in a Series D round of venture capital financing. The new round was led by Palo Alto-based DAG Ventures.
The company, founded by University of Chicago business school students Matt Maloney and Mike Evans five years ago, plans to double its geographic footprint and expand into 26 companies by year-end. GrubHub, which raised its first venture round from Northbrook-based Origin Ventures, has raised more than $34 million in funding to date.