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Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

January 31, 2013 at 12:01 AM

Casey, Godreau join startup accelerator 9Mile Labs

Microsoft Vice President Tom Casey, head of the company’s online commerce platform, is leaving to help run a new business-focused startup accelerator.

Longtime Seattle venture capitalist Enrique Godreau III is also joining 9Mile Labs, which will begin training and funding its first batch of startups this spring.

Over the past few years the Seattle area has seen a proliferation of startup accelerators and incubators that provide training, mentoring and a small amount of financing to early stage companies.

In some ways they’re formalizing the keiretsu-type networks of serious angel investors in tech circles, adding more structured, standardized opportunities to newcomers. This has happened as venture capital firms in the area contracted.

Yet 9Mile believe there’s still a need for an accelerator focused on business-to-business startups, particularly as the economy picks up and the broad upgrade in corporate technology continues.

The Seattle area has deep expertise in enterprise software but has yet to spawn as many business-to-business companies as investors expected after the big rise of Microsoft. Godreau said that his former firm, Voyager Capital, set up shop here expecting to work with a flood of “Baby Bills” that never materialized.

“It’s not clear we’ve realized our full potential relative to the resources that are here,” he said.

One factor may be that Seattle has relatively few accelerator-type programs compared with other tech hubs, said Sanjay Puri, a 9Mile partner who earlier worked at startups, Microsoft and Hewlett-Packard.

“What we have lacked in this city is the early stage startup support system,” he said.

Casey, who is leaving Microsoft on Feb. 28 after 16 year at the company, said people are enamored with consumer startups, but the commercial technology market is big and steady. It’s also the core of the Seattle area’s tech industry.

“There’s a ton of talent on the sideline, a ton of great ideas. There’s quite a bit of money,” he said. “And if you look at the landscape for those things, you’ve got to scratch your head and say, ‘Why aren’t there more people driving investment in more of those firms in Seattle and the Pacific Northwest?’ ”

At Microsoft, Casey helped build the company’s enterprise business and runs the platform powering transactions such as the sale of apps and subscriptions.

So far 9Mile has raised $1 million but it has more on tap from a network of supporters, including dozens of enterprise software veterans from Microsoft and other companies who mentor the startups. The group has also lined up a customer panel of enterprise technology managers.

Participants will receive $20,000 and give 9Mile from 4 percent to 8 percent of their company, an arrangement similar to that offered by accelerators, such as TechStars. It plans to work with 18 startups per year.

Startups will go through a three-month training program at 9Mile offices in Seattle and on the Eastside, locations of which haven’t been disclosed.

Funding from accelerators is relatively small, and they take a significant amount of equity, making it “pretty expensive money,” said Bryan Brewer, a Seattle startup consultant who runs workshops on finding angel investors.

But the value of the mentoring and business contacts could make it worthwhile, he said.

“Having a contact who can open the doors for you can be priceless,” he said. “You just have to kind of look at the whole picture.”

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