A new program that began earlier this year is looking for five IT-centric entrepreneurs to receive seed funds along with a series of services. Located in an underused mixed-use office building in downtown St. Louis, the program is run by two venture capitalists - Judy Sindecuse and Hal Gentry - who have formed a new entity called Capital Innovators. And yes, each of the five selected will receive $50k, along with free Internet hosting services, accounting and legal services, and intensive hands-on mentoring for 12 weeks.

Any firm can apply, but must agree to move to St. Louis and take up residency at the Capital Innovators offices for the mentoring period. The program is housed in a mostly empty office building called the Railway Exchange that has a branch of Macy's department store on its ground floors. Earlier this year, Macy's reduced its footprint from nine to three floors of the building. That, plus a layoff and reassignment of its St. Louis headquarters staff freed up more than a million square feet of the building. Capital Innovators has moved into part of one floor of the facility, and other non-IT related entrepreneurs are looking to lease space.

Interestingly, the Railway Exchange building dates from 1914, and was the tallest building in downtown St. Louis when it was built and one of the earliest mixed-use buildings before the concept became generally popular. Today, downtown St. Louis has a different kind of transportation exchange: most of the major cross-country Internet pipelines have points of presence in various office buildings, so Web startups have access to a variety of connectivity. There are a number of hosting providers who offer services from downtown St. Louis locations, including Datotel, Xiolink, Hostirian and Slicehost.

The entrepreneurial program is supported from grants of the Regional Chamber and Growth Association (the local Chamber of Commerce branch), the Partnership for Downtown St. Louis and the St. Louis Economic Development Corp., each of whom kicked in $30,000 to pay for improvements and leases for the office space for the next year. Each of the five finalists will receive free rent for the duration of their mentoring deal and then have the opportunity to rent out other space in the building at extremely low monthly rents if they wish. At the end of their mentoring period, each venture will pitch their business to local and national investors in a "Demo Day."

It is an interesting idea, and one that has been tried in other cities that have more of a tech heritage than St. Louis. Capital Innovators has put together a complete package to help startup businesses who want to grow to the next level, refine their offerings and get connected to the right advisors. The $50k seed money isn't a grant, but an equity investment by Capital Innovators.

The first group of ventures moved in last month, and includes:

  • Yojoe.com, a site for GI Joe doll collectors
  • DiningCircle.com, a restaurant reservation service
  • Gremln.com, a social media consolidation and analytics tool
  • JBara Software, a SaaS-based customer retention tool
  • Norse-Corp.com, a real-time Internet security vendor

One of the applicants that didn't make the initial cut and is re-applying is Intellitek Systems in Fort Wayne, Indiana; operating at break even with five employees selling SMB ERP packaged software. Matthew May is the Chief Project Engineer, and would consider moving the company to St. Louis because, "with the additional mentoring and capital, it is an opportunity to accelerate our profitability plans." He looked at other tech accelerators around the country but was attracted to Capital Innovators because of the various offerings and because it wasn't too far from his home base.

Applications are now being accepted for the second group of five finalists until the end of November. The form is a simple one, and your odds are good: the first group of five was picked from 165 entries.