Ten startups have been offered the opportunity to participate in the VC FinTech Acceleration program powered by global technology services provider FIS and hosted by the Venture Center in Little Rock.
The center is leasing space at 107 E. Markham St. from the Little Rock Technology Park. The start-ups’ names have not been released because legal paperwork is pending, according to Steve Rice, the Venture Center's spokesman.
The 12 weeks of support and mentorship from FIS' financial technology industry experts and Venture Center mentors will begin May 16, he said. The launch event will include a private founders’ dinner with Gary Norcross, chief executive officer of FIS.
The program’s goal is to help startups gain at least $1 million in annual recurring revenue.
It will provide a $50,000 initial investment for a 6 percent equity position, with up to $300,000 in additional investment possible. An investor demo day at the Clinton Presidential Library is set for Aug. 3.
VC FinTech Managing Director Gary Dowdy said that model works well for startups that don't know what they're worth or are worth less than a benchmark of around $833,000.
But some companies joining the accelerator are more established, so the 6 percent doesn't work for them, he said. Dowdy said the program offers those a simple agreement for future equity, meaning companies "let us decide what (they're) worth on the pretense of knowing that (they're) going to raise more money in the future." So the percentage bought by the $50,000 would be determined based on how much the company is worth after completing the accelerator program, although there would be additional negotiable provisions.
Dowdy said the startups chosen for the program include one Arkansas company.
The group is comprised of one online lending team, several digital banking (personal financial management) teams, one merchant (mobile/point of sale/payments) team, two services (benchmarking/regulatory) teams, one wealth management team and one money movement team, he said. They're coming from San Francisco, Atlanta, Nebraska, New York, Chicago and Geneva, Switzerland, Dowdy said.
He also said one of the companies had figured out a way for people to pay for goods with their phones 30 feet from a terminal and charge the vendor a "card present" fee instead of the more expensive "card not present" fee.
Lee Watson, the Venture Center's president and CEO, said in a news release, "FIS' senior leadership has been incredible to work with. Tariq Bokhari, Rob Lee, Chris Cline, Patrick Rivenbark and many others have really stepped up to make this an incredibly successful FinTech accelerator."
The list of applicants was narrowed from 150 to the top 13, Rice said. The three who didn’t receive offers are alternates in case one of the 10 is unable to come to Little Rock at the last minute, voluntarily drops out or something else unexpected occurs, he said.
FIS, based in Jacksonville, Florida, can trace its origin back to Systematics of Little Rock. Its west Little Rock campus, acquired in 2003 when FIS bought Alltel Information Services for $1.05 billion, is home to roughly 1,300 employees.