Joe Kirgues, co-founder of gener8tor, addresses the crowd at 2013’s premiere night at Milwaukee’s Turner Hall.
When Richard Yau looked at the wine business, he saw an inefficient industry ripe for disruption.
Well-known winemakers like Yellow Tail and Barefoot spend more money per bottle on marketing and things besides the wine itself than lower-profile wineries.
“A wine like Barefoot has significant brand marketing overhead,” says Yau. “We find wine where the production cost went into the juice, what’s in the bottle. That gives us an advantage.”
Yau and Joe Laurendi co-founded Bright Cellars, a monthly wine delivery service that uses a proprietary matching algorithm to find subscribers vintages they’ll love.
The two met while living in the same dorm at the Massachusetts Institute of Technology.
Bright Cellars is one of five startups that spent the past three months in Madison working with gener8tor, a Wisconsin business accelerator, to hone their investment presentations, court customers and do everything else required in getting a young company off the ground.
The process will culminate in “Premiere Night,” May 14 at the Barrymore Theatre, when each startup will give a four-minute pitch in front of venture capital firms, angel investors and seasoned entrepreneurs.
“It’s the pinnacle of our program,” says gener8tor co-founder Troy Vosseller. “It’s a chance for over 400 investors and community members to see the five companies onstage. It’s their public coming-out party.”
But it’s not as if Yau and his fellow founders have been locked in a basement writing computer code this whole time. Since the program kicked off on Feb. 6, they’ve met with dozens of prospective investors and gotten mentorship from the gener8tor team, as well as successful entrepreneurs who advise pro bono.
“Our companies go through an investor swarm where they pitch over 40 angels, angel funds or venture funds,” says Joe Kirgues, another gener8tor co-founder. “We try to create a marketplace for investment.”
The current class was selected from 430 applicants, says Vosseller. Alternating between Madison and Milwaukee, gener8tor spends half the year recruiting, the other half nurturing.
One needn’t wander far from gener8tor’s Capitol Square headquarters to find some of its biggest success stories. EatStreet, an online food-ordering service and a member of gener8tor Madison’s inaugural 2012 class, now employs over 100 people at its offices on West Wilson Street. Abodo, which aims to ease the apartment-finding process, is located just a few blocks away.
Vosseller says the 33 companies in the accelerator’s portfolio have raised over $40 million, and that number continues to rise.
Could Bright Cellars be the next hit? Current indicators are positive, says Yau, noting that the service has over 1,500 active members.
“We’ve been growing every month,” Yau says. “Since we joined gener8tor, the business has progressed a lot, both in vision and in operations. We have a clear path to becoming a market leader in e-commerce wine.”
Yau says Bright Cellars is still contemplating where to locate once the 12-week program ends. Returning to Boston, where he and Laurendi started the company in 2014, is one option. Northern California is also appealing: It’s where Yau grew up, where the overwhelming majority of venture capital dollars flow from, and home to Napa Valley, a world-class wine region.
But the company is also contemplating staying in Wisconsin. “The talent is here,” says Yau, citing as an example Jared Buckner, a senior computer science major at the UW who interned for Bright Cellars and has agreed to join full-time after graduation. “[Buckner] was looking to go to Silicon Valley,” Yau says. “That’s fairly typical if you’re studying CS and want to work in tech. I think it’s a huge deal that he wants to stick around and work with us.”