The concept certainly is attractive: an entrepreneurial hub where people can share offices, ideas and talent to boost their start-up business to the next level.
And judging by the full house listening to a pitch for StartingBlock Madison on Jan. 27, there is no shortage of interest.
“The idea is to bring together all the critical components to build our local entrepreneurial ecosystem for the long term,” George Austin told a gathering of the Wisconsin Innovation Network at the Sheraton Hotel.
Modeled after successful business incubators in other cities such as 1871 in Chicago and 1776 in Washington, D.C., StartingBlock Madison has been in the discussion phase for more than two years.
Things have been moving forward quickly over the past few months, however, including a solid location in the suddenly trendy and rapidly redeveloping Capitol East District along East Washington Avenue.
Gebhardt Development — the same firm that built the Constellation apartments on the 700 block of East Wash and is now constructing the Galaxy mixed-use project on the 800 block — has submitted a proposal to the city to build a 10- to 12-story building with up to 140,000 square feet of space and four floors of parking.
StartingBlock Madison would anchor the project, slated for the south side of the 800 block of East Wash across from the Galaxie. It would take about 50,000 square feet in the new building, which would be owned by a nonprofit.
While more of the details need to be worked out, some major tenants have already been identified including the Capital Entrepreneurs networking group, business accelerator gener8tor and Sector67, a hands-on hacker space currently operating at 2100 Winnebago St.
Two of Madison’s old line companies — American Family Insurance and Madison Gas & Electric — have thrown their support behind a project aimed at helping new ones get off the ground.
“My interest was piqued by a cultural shift,” said MGE CEO Gary Wolter. “Instead of thinking about what company I’m going to work for, young people are thinking what can I add to the community.”
American Family has committed an undisclosed but apparently sizable amount of money to the project, which is slated for a late summer groundbreaking if everything falls into place. The city of Madison has also pledged $1.5 million to the project in its 2015 capital budget.
Austin, the president of AVA Civic Enterprises who directed other successful projects including Monona Terrace, Overture Center and the Wisconsin Institutes for Discovery, is looking to raise another $3 million from other donors.
The goal is to create a facility that is free of a mortgage and can operate sustainably off rents and program revenue. Included in the project is a venue for meetings or music shows.
While project costs haven’t been determined, Austin said a $10 million figure is a good starting point.
“Securing financial health up front will be critical,” he said, acknowledging that incubators in other cities have struggled to maintain solvency without the support of a major backer. In the case of Chicago’s 1871, that has been venture capitalist J.B. Pritzker.
Joining Austin and Wolter in the presentation was Anne Smith, co-founder and co-director of the Law & Entrepreneurship Clinic at the UW Law School, and Troy Vosseller of gener8tor.
Smith said even with an improving job market and Madison’s low unemployment rate, she doesn’t anticipate any slowdown in entrepreneurial activity or interest.
“People will say ‘This is what I do during the day but my real passion is this,’” she said.
Vosseller said an incubator like StartingBlock will help inspire others to keep trying even if their first or second idea is a bust.
“The more start-ups you have, the more likely other people will come out of the entrepreneurial community and realize it’s totally OK to fall flat on your face,” he said.
The timeline for the project shows a move-in date of early 2016. ￼
StartingBlock Madison would anchor the project, slated for the south side of the 800 block of East Wash across from the Galaxie.