Launching a company can be daunting and difficult. From developing your products/services to fundraising, there’s always too much work and too little time. Seed accelerators, such as Techstars and Y Combinator, try to ease these early growing pains by offering funding and guidance—but only to a select few startups.
Seed accelerators are often likened to prestigious universities. Both are highly selective, intellectually challenging, and designed to foster learning and growth. Seed accelerators, however, span only a few months, wherein founders focus on building their fledgling businesses.
Techstars has been making waves in the startup world for over a decade now, expanding their portfolio and locations globally. Many of you first time founders, I’m sure, have thought about applying (or have already applied) to Techstars. The opportunity to connect with mentors and focus on building your business is definitely tempting. I thought I’d take a look at what Techstars has to offer and invite you to consider another option (me!)
|NOTE||Spend time researching Techstars’ seed accelerator locations. Different locations cater more to specific verticals than others. To maximize your experience, you should apply for the location that will bring the most value to your company.|
If your team aces the Techstars application process and has some good fortune, you’ll receive an offer to participate in their 3-month accelerator program.
Techstars will ask for 6% equity in exchange for a $20,000 stipend and a $100,000 convertible note. To give you a comparison, Techstars’ top competition, Y Combinator, asks for 7% equity in exchange for $150,000.
You don’t need to worry about paying for food, travel, or living expenses. Seed accelerators want you to dedicate your time to building your business and creating long-lasting connections with mentors and other founders.
Overall, that’s a low valuation for your startup.
This is because seed accelerators take on considerable risk of investing in your company early on. Their deal ensures they’re receiving value from you for the mentorship and opportunities they provide.
I commend Techstars for its Equity Back Guarantee (EBG). It gives founders the opportunity to buy back their 6% if the accelerator program proves unsatisfactory. Of course, Techstars doesn’t advertise any instance where a company has exercised the EBG, but I haven’t heard about any disgruntled founders.
Techstars, in particular, leans into that analogy of the prestigious university. Beyond the intellectual challenges and shiny degree, many argue the real value of a college lies in its network. The valuable opportunities available by association can lead to a new job, a great mentor, or even companionship in an unfamiliar place.
Simply put, no other startup accelerator can match Techstars’ global network.
Over 10,000 mentors, over 10,000 investors, over 1,600 alumni companies, over 200 employees. The numbers speak for themselves.
Ever heard of ‘demo day’?
Techstars doesn’t differentiate itself from other seed accelerators when it comes to the end goal. Granted, Techstars does take its own approach to get you to demo day. You know, from the section above, that Techstars values personal connections greatly. That’s why the startups in a cohort work side-by-side, getting to know each other along the way.
That being said, the ultimate goal of all seed accelerator programs is demo day—an opportunity, at the end of the three months, to show off your progress to other founders and investors.
|NOTE||Think about lines rather than points. Set goals and keep prospective investors updated on how your business is progressing. If you end up going to an accelerator program, don’t let demo day be your first data point. Having tracked and documented multiple points to create lines (show trends) make investors much more willing to invest.|
Overall, I believe I’ve provided a fair assessment of what Techstars has to offer. I genuinely think it’s a worthwhile experience that will benefit you years beyond the actual 3-month program.
In reality, though, a seed accelerator may not be the best option for you.
I obviously cannot compete with such a large operation and network. However, co-founding a company with me does bring benefits Techstars cannot match.
Techstars advise against applying as a solo founder unless you have all the necessary skills to make your business successful. To be fair, it’s not Techstars jobs to provide applicants with resources to build their startup teams. But all the same, Techstars tend not to accept solo founders.
I know it’s hard to find a co-founder who’s got startup experience and can cover your weaknesses, so that’s why I thought I’d offer my services to the many of you competent founders needing a bit of help. For the past decade, I’ve built startups from the ground up as a CTO and technical co-founder. You won’t need to go through a seed accelerator with my assistance.
Per accelerator program, Techstars has three to five mentors for the ten companies in your cohort. That’s undoubtedly valuable, but you won’t be getting exclusive access to help.
Although Techstars frames itself as a co-founder, its mentors aren’t really working with you longterm to build your company beyond the first seed round. Furthermore, while Techstars accepts fewer companies per accelerator program than others, your team is still expected to follow the program. By nature, Truestars cannot provide truly individualized support that an experienced co-founder can.
I partner with you, so we can develop the best business strategy for your startup. There’s no concern about a one-size-fits-all approach.
It’s becoming more and more common for businesses, in general, to be distributed all over the globe. The best colleagues for your business aren’t necessarily in your city, state, or country even. While smaller than Techstars’ network, my connections do span the globe. I will find the professionals who can help build your business in a cost-efficient manner.
Ready to apply to Techstars? There’s no harm in trying.
Since you’re here, I’m looking to partner with serious entrepreneurs who have bold ideas and realistic plans.
First-time founders, I know, find it especially hard to avoid all the pitfalls of building a business from the ground up. My extensive experience as a startup CTO and technical co-founder has given me a lot of wisdom I’d like to offer to you and your startup. From bootstrapping to scaling, I’ve done it all—multiple times over.
If you think you’ve got a game-changing idea, please get in touch!