Gary Chen, co-founder of Raise Robotics, strides on stage at the University of California, Berkeley wearing a bright yellow hi-vis vest. The attention-grabbing outfit is his ploy to stand out to an audience of investors and convince them to hand over $2mn. If successful, he and his robots will continue on a journey that might one day end in a billion-dollar valuation. If not, it could spell the end of his company.
This is Demo Day at Berkeley SkyDeck, an accelerator created to support early-stage start-ups. Like the most widely known accelerator Y Combinator (whose success stories include Reddit and Airbnb), it provides investment and an intense programme of training and mentorship in exchange for an equity stake in the companies it backs. SkyDeck takes 5 per cent for $105,000 and is highly competitive to get into, accepting just 1 in every 100 applicants.
Early-stage investors have been part of the Silicon Valley ecosystem for decades. They sift through thousands of requests and take on the risk of inexperienced founders and new ideas. The hope is that one or two will be successful enough to attract a buyer willing to pay tens of millions of dollars, which will give backers a high enough return to cover losses elsewhere.