Startup incubators offer cash and mentoring

What’s even better for a startup than receiving intensive mentoring from experienced entrepreneurs? Mentoring plus two big whacks of cash.

Vincent Cheung is among a growing number of entrepreneurs benefiting from this double-barrelled support for their startups. Cheung is CEO of Shape Collage, a Toronto-based developer of software that allows users to upload photos quickly and turn them into a collage of any shape. He’s one of five entrepreneurs accepted into Vancouver-based GrowLab, one of a new breed of startup accelerator programs offering both mentorship and financing. The pioneering program is Mountain View, Calif.- based Y Combinator, whose alumni include smash-hit startups Dropbox and Airbnb.

In return for a small equity stake, GrowLab invested $20,000 to $25,000 in each company whose CEO it accepted into the program. Starting last August, experienced entrepreneurs and others well versed in launches gave GrowLab’s first cohort three months of intensive mentoring in Vancouver. The CEOs of the five firms then flew to Silicon Valley for three weeks of extensive networking with prominent venture capitalists.

GrowLab offered an enticing prize to any company that graduated from the program: $150,000 in financing from the Business Development Bank of Canada. “The BDC did no checks or evaluations on whether we deserved this money,” says Cheung. “They said they’d accept GrowLab’s word.”

Cheung says the organizers assumed that one or two of the firms in the program would flunk out, “but were surprised and happy when all five companies graduated.”