Philadelphia-based accelerator Dreamit Health has announced that in its next class, it will offer the startups the option to keep their equity if they do not accept cash from the program. The accelerator, which offers the program in partnership with Indepence Blue Cross and Penn Medicine, said they added this option in order to get later stage companies and serial entrepreneurs to participate.
The company is still accepting applications for its next program which launches in March 2016.
Dreamit Health used to take an 8 percent equity stake in its accelerator companies. In exchange, companies got $50,000 in seed funding with a possible $250,000 in follow-on funding, as well as other benefits: free workspace, mentorship, legal advice and counsel, and access to healthcare personnel at Penn Medicine and Independence. Moving forward, those companies who choose not to give up their equity will still get those other benefits.
Over the years some 40 health-related companies have been through a Dreamit program, CEO Avi Savar said in a statement. These companies have raised a total of about $12.3 million to date, on top of the $3.1 million Dreamit has invested in them.
Two Dreamit alums were acquired last year.
One of the startups, telepsychiatry startup 1DocWay, was acquired by Genoa, a QoL Healthcare Company, a behavioral health specialty pharmacy chain, a few months ago. Another startup, Aircare, focused on creating a software program to prevent medical readmissions, was acquired by RightCare, which has developed an offering to improve care outcomes for patients.
Another startup, Biomeme, which has developed a smartphone peripheral that performs DNA analysis, signed a multi-million dollar contract with the US Military.
Last summer, DreamIt Health named Steve Barsh as its new managing director. The former lead Elliot Menschik, who helped create the health tech program, stepped down after running the accelerator for three years.
A couple of other accelerators have shifted their model in the last few years.
In 2014, another accelerator, Techstars, which has launched a few healthcare-focused programs, announced the option for startups to lower or eliminate the amount of equity they gave to the accelerator program. Some of the healthcare programs Techstars has launched include a Mayo Clinic post-accelerator program, a program with Nike, and a mobile health accelerator with Sprint.
In September 2013 Rock Health transitioned away from being an accelerator to focus on being a seed venture fund.