On the record with Accelerate MSP CEO Pam York


PamYorkAccelerateMSPAccelerateMSP has lingered in the shadows for over two years since their Ohio precursor JumpStart failed at introducing a public-private venture development organization (VDO) in Minnesota.

After a year long CEO seach, the wife of an original AccelerateMSP board member was chosen to be the leadership face. The plan of directly investing into startups was scrapped in favor of a $750k annual budget for a “roll-up-your-sleeves approach to mentoring seed-stage companies.”

Local legacy media has attempted to provide insight around AccelerateMSP’s intentions [1][2][3], however absent of any real questions. We sat down with CEO Pam York for an on the record conversation:

Jeff Pesek (JP): Thank you for taking the time to talk.

Pam York (PY): Thank you for the interest.

JP: Let’s start with the basics – what is the legal business entity name, type and where are the corporate articles located?

PY: AccelerateMSP is really more of a working title, it doesn’t have an official final name. We’re not incorporated yet, the University of Minnesota is currently acting as the fiscal agent. It’s definitely going to be a non-profit, but part of what I’m aiming to figure out is where does this thing live?

JP: Who are the legally registered owners, board members, or directors?

The fiduciary responsibility currently lies with the University of Minnesota. Current advisors to AccelerateMSP are: Joy Lindsay (Startec), Tom Kieffer (Virteva), Jon Stavig (University of Minnesota), Brad Lehrman (Soffer Charbonnet), Ernest Grumbles (Adams Grumbles), Steve Mercil (RAIN Source Capital), Cecile Bedor (City of St. Paul), and Ellen Muller (City of St. Paul).

JP: When were you chosen to be the CEO?

PY: In October.

JP: You are married to Jay Schrankler from the University of Minnesota’s Tech Transfer office who was a board member of Accelerate MSP up until around the time you were hired. At what point might that be considered a conflict of interest?

PY: I don’t think there is any conflict there, he’s no longer on the board. Once I threw my hat into the ring, he left the board. He had no influence on my appointment as the CEO.

JP: Has there been any funding received to date; if so, what type (public/private) and what amount?

PY: Yes, we have received $150k which has come from a variety of resources. A $75k grant was received from the Ford Foundation – which necessitated a 1:1 match. Other funding has come from the McKnight Foundation, GreaterMSP, the Knight Foundation the University of Minnesota, the City of St. Paul and the City of Minneapolis.

JP: Has any money been spent to date? If so, on what?

PY: Part of it has been spent on paying my salary of $120k annually and we have no other expenses at this point. My appointment right now is based on contract and first the six months term that would be $60k.

JP: I read that the annual budget stated (public/private) is $750k. Where do you see this sourced from?

PY: That’s the challenge that I’m pursuing is to determine where the budget financing would come from. I foresee some from corporate companies, some from foundations and some from public money through economic development initiatives. It depends on the value we can add and who is interested in putting money into that.

JP: In addition to your own salary, what would this funding be applied towards?

PY: The vast majority of it would go towards other salaries to support services. Some towards sponsorship of events, other maybe to creating a regional portal communication tool.

JP: Who would be making the decisions about where the funding would be applied?

PY: It would be the board making these decisions.

JP: Why do you feel the need to use the money that public pays in taxes to support AccelerateMSP?

PY: In an ideal world, we wouldn’t have to. The way I see it is that the state is already spending money on economic development initiatives, much of which is directed towards large corporations. We can have a debate about whether that money should go into these things, but since it already is, I’m suggesting let’s redirect some of it into entrepreneurial initiatives.

JP: Is that a debate you’d be interested in having at a future date?

PY: I don’t know that I’m prepared to do that, it’s not something I’ve studied or spent time thinking about very much.

JP: Can you describe what AccelerateMSP’s value proposition is to the entrepreneurial community?

PY: I would say the number one thing is helping people build their businesses. To be clear, we’re looking at technology based companies that require capital to get off the ground, grow and scale. I want to focus on where there are not resources being applied.

Even for experienced people building companies, there’s a lot of challenges to navigate. Figuring it out is hard and its best done in teams of people who really understand the field. We want to add value in the early stages.

JP: Why the decision to be a non profit entity vs. a for profit entity?

PY: It’s a good question, I think my view would be that if the environment were ripe for that in a for profit to make sense, it would already be happening. Why aren’t there any for-profit accelerators here?

JP: Could you expand on that?

PY: I do consider this to be an accelerator of sorts. My job is to be a student of the environment and determine what gaps need to be filled, I’m still in that process and as I talk to a lot of people, we have some for profit initiatives but why not our own version of what we see elsewhere. What are the reasons for that, I wonder?

JP: Why do you think that is?

PY: I think there’s an interest for it, but pulling the people together who are interested in that has not yet happened. We have everything that’s needed, let’s just make that happen.

JP: What evidence is there to indicate that AccelerateMSP is needed and/or wanted by Minnesota’s technology entrepreneurs?

PY: That’s what I hear from people…

JP: People as in entrepreneurs?

Yes, entrepreneurs that I talk to.

JP: Any entrepreneurs individually or groups that you’ve talked to?

PY: I don’t know that they would want me to say who they are. To be clear, I have not interviewed numerous entrepreneurs, I am to some degree going off the opinions those who are working with entrepreneurs on a regular basis, those on the advisory board.

They say AccelerateMSP is desired, that entrepreneurs do need it. However if the entrepreneurs do not want or need AccelerateMSP then it will not be successful.

JP: So if the board feels strongly that AccelerateMSP is needed, why would they not be financially supporting it themselves as opposed to going through foundations and city/state to use taxpayer money?

PY: I think that there will be a time when that happens, we’re just in the very beginnings. There will be that opportunity for them.

JP: Wouldn’t the beginning stages be the greatest opportunity for them to directly show their support by backing what they consider necessary?

PY: It’s been in the formative stages and that opportunity is coming. If they don’t want to put their own money in that would be a sign.

JP: A sign of what?

PY: A sign that they are not supporting it…different people would have different reasons for why they would put their own money into it…

JP: Or why they don’t?

PY: Yes, or why they don’t.

JP: Recent data shows that Minnesota’s tech funding grew 26% YoY 2012-2013. Yet it was noted that “Part of the organization’s mission will be to determine if there is a lack of funding or just a perception that there is not enough funding.”

Besides the fact that any “determination” — regardless of who makes it — is still a matter of perception, what is yours?

PY: My impression is that it’s a mixed story. I’ve heard the expression that ‘good companies get funded’ and I think that’s probably true. A lot companies get financed by people who are under the radar screen, so it’s hard to say. Where I think there’s a gap is at the earliest stages of tech companies, those that necessitate significant capital for proof-of-concept.

If you look at the angel investors here, it doesn’t seem like many of them are investing in the seed stage. And again, when it does, it’s often times unknown.

JP: How do you define seed stage?

PY: Pre-revenue, early formation.

JP: In your opinion, what would qualify as “enough” seed stage funding?

PY: I don’t know if I can answer that, or that there is such an answer. Part of what we’re looking to do is determine for every company that is getting funded, how many are not? If we could help them make that shift and become fundable, how many would there be to finance? I don’t know the answer to that, but perhaps those are the ones we could help.

JP: Why not let the open market of private investors determine what’s fundable or not, that is to say, invest when it fits their risk-reward profile and where makes sense to them?

PY: There aren’t many investors here who operate in the seed stage, which is the hypothesis I have and the premise we’re operating on. Now if that turns out to be false, then it it’s false.

JP: How would you determine if that were true or false? What’s many by your judgement?

PY: It’s a matter of really digging in and understanding what the pipeline is and I think ultimately it is a market judgement.

JP: So on one hand you’re suggesting that there’s further judgement to be made by AccelerateMSP, on the other you’re saying it’s the markets to make.  Can you help me better understand this logic?

PY: I really want to understand…my sense is there’s a huge opportunity here and we want to better know how capital is being deployed by working with those who are investing.

JP: What kind of opportunities and for who?

PY: I think for the Twin Cities region and beyond.

JP: A region is a very general concept that encompasses a lot of different people and aspects, could you be more specific about who within the region?

It’s on many levels and as an environment and ecosystem overall. To me, that seems like a great thing for the community, to transform this into a place that’s more appealing to everybody. Creating a mindset where people feel empowered to chart their own course is a big part of it, one where they can make money as entrepreneur and/or investors, but even beyond that.

JP: You have said “This kind of thing has to be created and owned by people who understand what’s really needed.”

My question based on that is: who would you suggest better understands what’s really needed more than the entrepreneurs and investors themselves?

PY: What do you mean?

JP: Who are the “people that understand what’s really needed?”

PY: A lot of what’s happening here is a grassroots effort going on and a degree of vectoring going on. If we want to do that, then we can allow that to happen serendipitously or we can intentionally vector it.

JP: What is vectoring?

PY: Vectoring means we’re here and we want to go to here (motions hands low to high). It’s about the culture and the environment. So who is there best suited to do that? Well entrepreneurs are best designed to build their own companies, but who is designed to vector a community?

JP: If you’re asking me, that would be entrepreneurs engaged in “vectoring” as you term it…

PY: Well I am an entrepreneur, that’s my background, I don’t know how much you know about it.

JP: Very little…are there any other current entrepreneurs involved in the formation of AccelerateMSP?

PY: Tom Kieffer.

JP: One?

PY: One.

JP: I’m informed that you were recently asked to meet with the Governor’s team on “access to capital.” Did this meeting occur?

PY: It did occur.

JP: Were any entrepreneurs present?

PY: Aside from myself, no.

JP: Why not?

PY: I don’t think that’s something that we should discuss right now.

JP: OK. That concludes my questions, thank you for the time. Is there anything else that you would like to add?

PY: It’s important to note that there is a group of people who have brought it to this point and those are the people on the board. What needs to happen now is the board needs to be constituted and comprised of the next set of people to move this forward, that’s what’s on my mind.


  • http://twitter.com/casey__allen Casey Allen

    Excellent interview to both Jeff and Pam.

    To the outsider this might seem like a brutal line of questioning but it’s a relief to finally have someone actually ask direct questions of a group that has always taken public money, was created for the sole purpose of taking public money, and had what I could only call “horrific” signs of incompetence at the beginning. Their plans for an accelerator program was, in my professional opinion, a joke.

    The board of advisors deserves some props for trying to take the wreckage that Jumpstart left and trying to make it less wrecked. But from the outside this has felt like it’s iterated as fast as a DNA strand.

    Kudos to Pam for going on the record. Opening up about the state of the group was past due.

    My PSA to entrepreneurs (since AccelerateMSP’s focus as always been funding hyper-early stage):

    If you are reading this and muttering under your breath that you indeed concur that there is an appalling lack of seed, pre-revenue funding laying out there ready for you to simply opt into due to the fact that all MN investors are conservative fools, then I’m sorry to be the one to hand out the dose of reality. It largely doesn’t exist much of anywhere. Not in Chicago. Not in NYC. Not in SV unless it’s your 2nd or 3rd startup (which out there is usually the case). This is not unique to MN. Tech ideas simply do not get funded* anymore (anywhere) except by friends and family. Once you accept this as your reality it’s liberating because you then get to focus on what’s important: customers and revenue.

    *sure there are outliers. But statistically, you are likely not one.

    • http://www.linkedin.com/in/JeffPester Jeff Pester

      Not true.

      The suggestion that “Tech ideas simply do not get funded* anymore (anywhere) except by friends and family” is just not correct. The amount and volume of angel-backed deals in the Bay Area is extremely robust and NYC is catching up quickly. While VCs have indeed moved upstream by requiring more traction than in the past, angel funding and the emergence of Angel List specifically have filled that void to a large extent.

      The fact is the Twin Cities (and most cities) just doesn’t have risk capital and/or funding appetite for higher risk early-stage technology companies. That’s not a rap, it’s just a fact of life. However, there seems to be lots of local companies that have found a path to success without it.

      Ask any of the MN entrepreneurs who have left for the west and/or east coasts and they’ll tell you the same thing: If you have a big, bold idea where the existing market is small or non-existent, your best chance of success is to move to where the true risk capital is. If you have an idea/business where you can bootstrap yourself through the initial launch and growth stage(s), by all means stay in MN. Just understand that if your business needs moderate to significant growth capital to scale, you’re going to have to get your money somewhere else. Again, there are several local companies that have been able to do just that and stay in the region.

      My main point is this: If you have a good team with a good idea, there is definitely seed-stage funding available TODAY. If you want money, you have to go to where the money is. Asserting that that funding doesn’t exist anywhere is simply not true.

      • http://twitter.com/casey__allen Casey Allen


        Technically you are correct, but don’t you think you might roll in a circle of entrepreneurs who perhaps are slightly different caliber than “normal”?

        If an entrepreneur personally knows several active investors, has a background of execution in a highly well respected startup, and has deep expertise in the very space they are launching a startup in, than it’s conceivable they will raise a round pre-launch, albeit not necessarily with ease.

        But feedback from coastal investors I know say otherwise as a whole. Decks do not get funded. Even functional prototypes do not get funded unless you’re Kevin Rose. Even a cursory look on AngelList shows that 95% of companies that successfully close rounds are ones that already have solid customer or revenue (or both) traction. The ones that are struggling to raise are the ones that don’t. This is geography-agnostic.

        My point is that a vast, vast majority of founders need to show traction to overcome the fact that they lack that combination of background, expertise, and network. Not every entrepreneur is an ex-product manager from Google and has ~50 millionaires on speed dial.

        • http://www.linkedin.com/in/JeffPester Jeff Pester

          First, in your response you mentioned “seed, pre-revenue” funding, not “deck-only, pre-launch” funding. Big difference. In fact, you made no mention of getting funded off a deck alone at all. On that I agree – but that’s been the case for years.

          Secondly, I would refrain from statements like “Even functional prototypes do not get funded” if you’re not absolutely sure that those statements are true. Again in this case, you are incorrect.

          Finally, I’m not sure what your statement “Not every entrepreneur is an ex-product manager from Google and has 80 millionaires on speed dial.” is supposed to convey. That group includes virtually no one who is currently building a seed stage pre-rev company, and suggesting that those attributes are something an entrepreneur needs to build, fund and launch a company is misleading and unproductive.

          • http://twitter.com/casey__allen Casey Allen

            You’re talking about edge cases, not the norm. I’m talking about the norm, which is where the majority of entrepreneurs lie.

  • http://minnovation.co Joe Serrano

    Wow. That was a candid interview. Those that pave the way often get their teeth kicked in.

    Casey, in my experience you are painfully correct on all accounts.

    A line of thinking I have heard a lot around town has been: “We aren’t Silicon Valley. We need to find our own Minnesota-type path.”

    While that feels like a battle call, I find when I ask the same folks who make this statement what it means – they have no actionable answer. Making the statement is a great first step though.I think the time is nigh that we figure out what that is.

    Back in the 40s and 50s, we were well on our way to becoming a major tech center, but forgot how to embrace innovation and it died out. ( http://www.twincities.com/business/ci_14103602 )

    What does it mean to me?

    -Working together as entrepreneurs and investors. Educating and supporting each other with patience and urgency. I have learned this the hard way – but we have to praise each other for even trying to make things happen at all. Praise to Techdot for leading the path. I still feel like we are missing easy collusion tools. There was talk about this at Minnebar, but I am not sure of actions taken but I would like to know more.

    – Adopting each others first prototypes and providing great feedback.

    – Big companies getting more involved and understanding the new realities of tech startups and how to work with them LOCALLY. In my own experience with this, there is a big disconnect on both sides.

    – Piecing together dream team startups tackling something BIG and creating Minnesota’s PayPal-like win. A 3D printed pitcher in the shape of MInnesota at Startup Weekend does not count. (No offense…) If you are going to spend precious time and grind out a startup, grind BIG. Is this something Accelerate MSP can help with? Perhaps starting even BEFORE the idea, recruit a great team to FIND a great idea and take action on it?

    – Moving FASTER

    – Don’t be afraid to stick your neck out. Learn in public. Start something. Start today.
    (In other words, I could be completely wrong about all of the above.)

    We need all the help we can. Entrepreneurs are the answer – in many capacities. Let’s create a rising tide here.

    • http://twitter.com/casey__allen Casey Allen

      The actionable answer (for entrepreneurs) is simple:

      1. Don’t waste time fundraising pre-rev.

      2. Know what MN is strong at. Enterprise. Slight bent towards healthtech and edutech, but we have multiple successes in every space. Look at what gets funded and exited. It’s not hard. If you do not fit this framework, jump to #3

      3. If you need to move to a city more friendly for investors, talent, and advisors, then do it without hesitation. There’s no shame in this. Just come back later and share your knowledge, connections, and if possible, money. If you decide to stay in MN, jump to #4

      4. Know that raising 1/2+ of your round from Chicago or elsewhere is smart, efficient, and usually necessary. So long as you have traction you can likely keep your company in MN for now. This might change series A or B, but worry about getting there first. If you have no traction you’ll waste all of your time trying to get meetings, won’t get any work done, and will just demoralize yourself.

  • Chompy

    These grant and publicly funded accelerator programs are always boondoggles, with the employees and administrators of the programs pocketing most of the money.

  • stay classy

    In summary: a group of business people in cahoots with political people are meeting in private, conspiring ways to obtain tax payers & foundation money to “help entrepreneurs”. Oh, and these entrepreneurs are not invited or allowed in the meetings with Dayton. Bonus! the CEO is married to a “former” board member.

  • Ernest Grumbles

    Driving a successful startup economy takes multiple players working at multiple levels in multiple ways. There is no one right group and no one way. This is true with world hunger, public health, homelessness, sex trafficking…. If someone’s working to fight hunger, they’re working to fight hunger. Undoubtedly, some will work better than others…for periods of time. Then the game shifts. To those helping startups, whatever your role, stay heads down, ignore infighting and soldier on.

  • http://paulprins.net Paul Prins

    One of the most engaging and pointed interviews I’ve read in a while. Well done Jeff and I appreciate your willingness to ask the tough questions. The discussion in the comments has been interesting as well – figure I’d toss in a few cents worth. Though I admit my experience is more limited then many of the other folks writing here.

    As a member of the local start up community I can tell you that most of my peers are not seeking investment early on (bootstrapping or self funding), and if they do they’re seeking it from friends/family. I cannot tell you why this is – since everyone seems to have their own unique reasons. As they become profitable the game changes for them, some have closed rounds in the 6/7 figure range (with most of it not coming locally), while others have chosen to focus on leveraging their revenue forward.

    While it would be nice to have more access locally it seems foolish to devote resources into cultivating it. All the work people are doing to raise awareness will be accomplished 1000x with the first big successful local startup making it big. Short of that I don’t expect to see the local investment community really change their behavior. It would seem that the better job we could do at highlighting local success on a state level might actually accomplish more then pre-rev funding.

    It isn’t surprising that so few entrepreneurs are involved with them. Would you rather try to change the culture of the investment community in the state, or take a phone call/flight to people who already get it. Just the thoughts of someone in the trenches. It also seems to make sense why so many people like trying to raise funding in Q1 – they get to escape the cold for a few days.