Accelerators offer startups an introduction to government markets

When Daniel Bock and Istvan Lorinz founded Morpheus Space in 2018, they knew the German university spinoff’s propulsion technology might appeal to U.S. government customers, but they knew little about government contracting.

“We had no idea how it worked,” said Lorinz, Morpheus president. “We started from zero, literally.”

The 2019 Techstars Starburst Space Accelerator introduced Morpheus Space to potential government customers, mentors and advisors.

The Morpheus founders met every member of their advisory board directly or indirectly through the Techstars accelerator, said Bock, Morpheus CEO.

Startup accelerators are an important ingredient of the evolving space ecosystem. These intensive programs, which tend to last two or three months, connect founders with advisors and mentors who can help them raise money, craft go-to-market strategies and identify potential customers. Entrepreneurs say accelerators are particularly helpful for startups looking to break into the military space market.

The Techstars Space Accelerator attracts companies ready or almost ready to sell their technology. Before accepting companies, Techstars personnel research the market to determine whether the technologies companies are proposing are, in fact, feasible and whether there is demand for the products or services in the civil, military or commercial space sectors.

Firms that join the accelerator receive $20,000, which founders often use to cover living expenses during the Los Angeles-based program. Techstars receives a 6% equity stake in companies in return for funding and guidance.

“Obviously, I’m a fan of accelerator programs that get founders supported by mentors who have a lot of experience, can make introductions and offer advice,” said Matt Kozlov, Techstars Los Angeles managing director.

Similarly, Starburst Aerospace runs an accelerator that connects startups with corporate partners, investors and government officials in a three-month program. In return, Starburst receives shares in a company worth $120,000.

Orbital Sidekick participated in the Lightspeed Innovations accelerator for aerospace startups in 2017. Lightspeed paired each startup with a U.S. Air Force officer. Since that introduction to military space, the hyperspectral imagery startup has claimed Small Business Innovation Research contracts, funding from the Air Force Strategic Financing program, known as STRATFI, and backing from In-Q-Tel, the investment arm of the U.S. intelligence community.

“It’s important to surround yourself with advocates and advisors that have ties to the defense and intelligence community,” said Daniel Katz, Orbital Sidekick CEO.

Other space startups find advisors through the Catalyst Accelerator established in 2018 by the Air Force Research Laboratory Space Vehicles Directorate to support small businesses’ market technology with both commercial and military applications. Catalyst provides startups with $15,000 and office space at its Colorado Springs Catalyst Campus. In addition, each company that participates in the accelerator is paired with a liaison to help them navigate the defense market and a “Commercial Sherpa” to help startups connect with other businesses and hone sales strategies.

This article originally appeared in the March 2022 issue of SpaceNews magazine.