There’s more green on the horizon for startup companies accepted into an IT-focused, San Francisco accelerator program. And by green, we mean cash. Greenstart, the startup accelerator that funds and mentors cleantech companies focused on information technology has announced an additional $100,000 convertible note to startups in the program. That money will be handed out on top of a $15,000 seed investment provided to those in the program.
That means companies will be able to focus 100 percent on building their companies during the accelerator program, instead of fundraising to make ends meet. The convertible notes will be drawn from a $6 million fund from a growing syndicate of leading angel investors, family offices and venture capital firms. The fund will cover the next 60 companies to come through the program, and has already been offered to the current five companies in program.
“In addition to our mentoring, networking, in-house design services and the many other benefits Greenstart offers, companies selected for the program now have access to a total of $115,000 in funding,” Managing Partner Mitch Lowe said in a statement. “This allows the startups in the program to stay focused on customer and product development instead of hitting the streets for investors. It should also help Greenstart attract interest from a much wider pool of innovative entrepreneurs for our upcoming programs.”
Convertible notes are frequently used by startups to raise seed capital. The way they generally work is, the startup issues the investor a promissory note, for the investment amount, with an agreed upon mechanism for converting the debt to equity at some juncture (often when new investors are brought in).
Greenstart has already begun accepting applications for its Fall 2012 program. The deadline for submission is April 11. Startups can apply through the Greenstart website.