What We Are Looking For at URBAN-X

At URBAN-X we just opened applications for Cohort 12 of our accelerator program. Here is where to apply, and the purpose of this article is to give you a sense of what we’re looking for.

After accelerating 72 startups over 10 cohorts, URBAN-X is still very much following the mission it was created for: supporting early stage innovation to make cities more sustainable, livable, and resilient. To see what the team has achieved so far, take a look at 6 years of urban innovation, including an impressive fundraising performance and a good track record for diversity.

If you want more information on how we run our accelerator, please read our thoughts on improving the accelerator model. Now, back to the reason we are here: what are we looking for in our founders and how can we help them become the game-changers of tomorrow?

Are you on Thesis?

Cities — that’s what we’re about. Is your product or idea going to solve one of the major challenges that cities around the world have? With all their differences, cities globally tend to face similar issues. For example, more efficient Air Conditioning technologies could help NYC reduce the heat island effect, decarbonize buildings, and alleviate strains on the grid at peak use. The same technology could be used for air conditioning in cities around India, which faces increasingly hot summers and has a growing middle class that’s shopping for AC units.

While tech in the urban context includes many sectors, we’ve chosen these seven as our focus: Built environment and Real Estat;, Infrastructure and Industry; Energy and Grid; Transportation and Mobility; Food, Waste and Water, Public Health and Safety, and Govtech and Civic Solutions. Though we don’t really use these sectors for our selection or even to structure our programming, they give us a rough framework. For example, we don’t work on healthcare, education, or banking, even though they are relevant sectors in an urban context.

Most companies we select are Climatech (or Cleantech) related, but this is not a requirement. Some social impact founders might not focus on sustainability but have ideas to make cities more livable and equitable and we definitely want to hear from them. And sometimes we onboard companies that make sense for our sister innovation units iVentures and Startup Garage to bring innovation to MINI and the BMW Group.

Early stage, but not too early

You must have taken a significant amount of time and effort to understand the market and technology potential. At a minimum, you should have some rough prototypes of the product, hardware or software, that you are aiming at bringing to market. You need some initial validation such as: Letters Of Intent, pilots, partnership or distribution agreements. We won’t turn you down if you have some revenue, but if you make more than $1M in Annual Recurring Revenue, you’re probably a better fit for our growth support.

Your startup needs to be your main professional focus, i.e. your full time job. If you’re about to make the leap and haven’t handed in your 2-weeks notice, that should happen before the onboarding. Keeping a part time gig (10 hours or less) consulting is tolerable and could make sense if your burn rate is quite low (less than $10K), but anything more tells us you’re not serious about your venture, and we’ll be hesitant to pour our resources into what we see as a side project.

Hardware and/or software

About half of our companies have a hardware product, and the other half is pure software. Most of the hardware has some software piece attached to it — a controller, a network, some ML or data play. Sometimes, the hardware stands on its own.

We like to work with hardware because addressing issues related to climate change often requires action on the atoms, and not only the bits. We are also well suited for that, coming from BMW-MINI, an organization that has a strong industrial design, engineering, and manufacturing culture.

We love deeptech

Yes, more and more people say that but when it’s time to write the check or invest the resources, few do. It’s understandable because product development cycles are longer and translating the work from the lab to the market is a challenging change of mindset. But the most important problems to solve will require fundamentally new technologies and the biggest risk is not giving them a chance. The climate crisis is real, and we will need new technologies to fix it.

We are aware that five months is not a lot of time, and that some product development might need 12, 18, even 24 months in addition to years already spent on the technology in the lab. If we’re not able to accompany you all the way, we will help create a roadmap to continue on your own once the program has ended.

Solo founders are welcome*

Finding a co-founder can be some of the most serendipitous parts of building a startup because you’ll be spending more time with the person over the next 5–8 years than anybody else in your life. Ideally, you want to have worked with that person for at least a few months at some point in your career, or know them well enough to have a good sense of them and your interpersonal dynamics. A team of 2, 3, or 4 cofounders is great — you can split the responsibilities, the skills sets, and the connections needed to make your idea happen. When one is not feeling so great, the other(s) can take the lead.

But, to us, that doesn’t mean that being a solo founder is not viable. We’d rather have one than a team that hasn’t found a way to work well together or has members who have one foot out the door. Solo founders do have to have a fairly rounded skill set and experience, and cover both the technical and business sides of the venture. They’ll have us as their team during the accelerator, and we’ll help them hire the people they need when they get their funding.

As a note, we use the term founder loosely, referring to anyone working full time at the startup, regardless if they were there at the beginning or joined two years after the company was incorporated. We are still at the seed stage and the risks are sky high.

Born in the USA

Or maybe not quite. We have companies coming from around the world, but our resources are here in NYC and that’s where we can really help your breakthrough. We are currently working to expand our network and capacity in Europe, but for now, we can’t do much unless you have strong plans to expand to the US.

In practice, this is not an issue since the attraction of the US market, even in comparison to the 500M people of the European Union, is still predominant, and NYC is the epitome of the megalopolis. If you make it here you can make it anywhere, and as importantly, if you can have an impact here, you can translate it to most other cities.

Fluent in english

Our team is quite international — from Germany, China, France, England, Chile, and yes, the USA — but we all work in English. The conversations we are going to have on your product, brand, and business strategy require precision and nuance. Culture gaps can be bridged — that’s partly what we’re here for if you’re not from the US — but mastery of the English language is a must.

A clean cap table

There are a few red flags for an early-stage cap table:

• Too much equity given to friends and family. Yes, these people love you and support you unconditionally and you want to give back, but they have to fit into the bigger picture.
• Inactive cofounders with more than 10% equity. Again, you’re just at the beginning of the journey and there is so much work to be done. The idea is nothing; the execution, everything.
• Equal splits between cofounders who are clearly not contributing to the same extent, typically, one keeps their research job and the other one is full time on the startup. Although laudable, the spirit of generosity doesn’t work for a venture where other people are going to invest their time or money.

Even if you’re fine with it, there’s a point when it’s going to be a showstopper. You might be able to push it to your Series A round but not further, and you don’t want that to be the reason why you can’t close a round. It is critical to the growth of the company that incentives are aligned with actual contributions and time invested, now and in the future.

That’s it! We know there’s many of you out there. We’d love to hear from you; again, here is our application form and if you have questions on any of this, please reach out.