When Ted Livingston was 23 years old, he had a problem not many people that age face: he had to get rid of $1 million.

Livingston is the Founder and CEO of Kik.com, the high-flying chat service that has almost a quarter-billion registered users. In 2011, the company was closing a funding round, and to make the deal work Livingston had to sell some of his own shares, for which he was to receive $1 million. He was worried that wouldn’t sit well with the other founders, so he donated every nickel to one of the organizations that helped him get started: Velocity.

“I wanted it to be a statement to the community and to the world,” Livingston said two years later. The statement was not just that Kik was something special. It was that Velocity was special as well.

Velocity is the accelerator of the University of Waterloo. Livingston’s seven-figure donation became the cornerstone of the Velocity fund, which each year hands out about $400,000 to companies in the program.

The accelerator is based in the Communitech hub, where it has recently expanded to encompass a total work space of 36,711 square feet.

To call Velocity a university accelerator is technically correct. Every company that goes through the accelerator has at least one founder that attended the University of Waterloo. But it also misses the point. Velocity is an organization that has produced companies like Kik and Thalmic Labs and Pebble – startups that draw international attention and customers.

At the end of 2015, the accelerator had the capacity for about 74 to 76 companies at any one time. With the recent expansion, the capacity has risen to 120 companies. It is now the largest accelerator in North America that doesn’t take equity in its client companies.

“That may be the largest in the world,” Mike Kirkup, the director of Velocity, said in a recent interview in the Hub. “We just had no way to check it beyond North America.”

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An alumnus of the University of Waterloo and the region’s most successful startup, Research in Motion (now BlackBerry), Kirkup has been the director of Velocity since 2011. In that time, a total of 163 companies have entered Velocity, and more than 40 have graduated from the program. Seven have been acquired.

Kik is certainly the posterchild for Velocity, and Livingston’s smiling presence shines through at many of the events. But graduates include such companies as Thalmic Labs, whose Myo armband lets users wirelessly control technology through gestures and motion, and Vidyard, whose platform helps marketers use video to reach their audience. As well as finding clients, the companies have been darlings of venture capital investors. Kik has raised a total of US$120.5 million, Vidyard US$60.7 million and Thalmic Labs US$14.5 million.

In fact, Velocity revealed in the autumn of 2015 that its companies have raised $250 million in “follow-on funding”. But there is one proviso about the statement: it assumes that the Canadian and U.S. dollars are at par.

When you consider that the C-dollar closed 2015 at just over 72 US cents, it’s obvious the Velocity grads have raised substantially more than that amount.

So how have Kirkup and his band of collaborators produced such excellent results?

The first reason is great partners, starting with the University of Waterloo itself. The university is recognized as the preeminent institution for science education in the country. That means it attracts students who thrive on the sciences. Its coop program has operated for decades, so the students get hands-on experience over four years with leading corporations in their chosen field. And finally, the university has a pragmatic bent, so there is virtually no blowback from professors who worry that science is tainted by teaching students to commercialize their work.

“The culture of the university has always been entrepreneurial,” said Kirkup. “It was founded by engineers that needed help and expertise to help grow their businesses.”

It’s also worth noting that Velocity is a cornerstone of the Communitech hub, and that the Velocity companies can tap all the mentorship and industry expertise that is drawn to Communitech. It’s a happy, symbiotic relationship.

The second reason for the success is the program itself, which is loosely structured and basically lets founders get on with the business of developing their businesses. It’s divided into three main sections (which will be united under one roof with the expansion): Velocity Garage, which houses largely software companies; Velocity Foundry for hardware companies; and Velocity Sciences, which is predominantly for life sciences startups. The participants must be working on their projects full-time, and at least one must have gone to the university. What that means is that the founders are customarily Waterloo grads, but they flesh out their staff with coop students (who learn about startup life through the experience).

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Velocity is unlike other accelerators in many ways. There are relatively few formal classroom sessions. The most frequent form of mentorship is the founders identifying what they need to learn and linking up with someone who can teach it to them. Such people are rarely far away. And it is not the customary four- to six-month “accelerated” format, but a process of one or two years. There’s not a set time for companies to launch. Usually, successful companies know when it is time to leave because they have outgrown their allotted space, or decided there is nothing more to learn from the Velocity mentors.

Whereas the university is renowned for the quality of its scientific education, Kirkup said students by their nature don’t have the experience in life or career that allows them to identify acute pain points. They’re keen to solve problems, but they don’t fully understand the problems that need to be solved. To overcome this hurdle, Velocity and the university created the Problem Lab. It’s a meeting place where corporate executives can get together with students, discuss the company’s challenges and work with students on developing technologies that can help. The Problem Lab will get a new space under the recent expansion.

The third factor is the Velocity Fund – which is a rare, possibly unique, facet of a university-affiliated accelerator. The fund awards funding to startups coming out of the university once a semester, or three times a year. It gives $25,000 to each of four startups, plus a $10,000 bonus for the best hardware company. And it also awards $5,000 funding packages to three early-stage teams. Ten finalists deliver three-minute pitches in each division before a room packed with students who come out to witness the contest.

Now Velocity is growing. On Jan. 12, the facility almost doubled its capacity, all under one roof. Kirkup said the organization now has to “press both ends of the pump at the same time” to develop enough new companies to fill the space. He believes the enthusiasm for entrepreneurship and the quality of research at the University of Waterloo will ensure that they can fill the space in a couple of years.

In short, Kirkup said this new expansion will mean three things to Velocity.

“One, we can repatriate the facilities back into one facility,” he said. “Two, we’re going to have a dedicated facility for our hardware and life sciences companies that will be a big improvement over what we have today; and three, we will have more space for more companies."