BostInnovation recently wrote about the most active VC’s on Twitter. One of those was Shawn Broderick, Managing Director of TechStars in Boston. We snagged an interview with him to get the inside scoop on the most coveted start-up opportunity in Boston.
What is TechStars?
TechStars is a 13-week program that provides seed funding and mentorship to start-ups. It operates in Boston in the spring, Boulder in the summer, and will soon launch in Seattle in the fall.
If a founder is lucky enough to get accepted into the program (last year they had over 600 applicants), Broderick says they’ll “build sustainable lifelong relationships.” TechStars is not for the faint of heart though. Broderick says that these entrepreneurs work “8 days a week, 25 hours a day.”
The first month is all about education. Founders attend sessions with mentors and resources to soak up knowledge necessary to make their start-up a success.
In the second month, the educational sessions lighten up to allow founders to “get back in their engineering holes,” as Broderick affectionately says.
Finally in month three, the engineers are pulled back out to practice pitching and to finalize their products for Demo Night, the culmination of the TechStars process.
At Demo Night, angels, mentors, and venture capitalists are present. The companies showcase their final products, and can reap the benefits of being exposed to investors who are present. This is really the essence of how TechStars graduates the start-ups to the next level.
The Numbers
- Once accepted, companies get seed funding of $6,000 per founder for up to three founders.
- TechStars takes a 6% equity stake in the company.
- Average number of founders: 2.6. TechStars generally does not take on companies that have a sole founder.
- Historically, 70% of the TechStars companies exit bootstrapped or with VC funding.
- In 2009 in Boston, TechStars had 9 companies comprised of 21 founders and 65 mentors. The ratio is staggering… or as Broderick says, mentors were “shoving a fire hose of knowledge down [the founder’s] throats”.
The Common Denominator
Broderick has seen over 40 companies pass through the TechStars program. Many of them have been successful and been acquired or received further funding. Broderick says that there are three indicators of a successful start-up founder:
- The ability to be mentored. Broderick notes that “an ability to listen and integrate feedback” is one of the most valuable qualities of a start-up founder. Makes sense right? After all, TechStars is all about mentorship. It’s key that founders not only want to be mentored but are able to implement advice.
- The ability to execute. Founders can learn all they want, but many people are unable to execute. When we’re talking about money on the table and trying to get these start-ups off the ground, that can present a big problem for everyone involved. Broderick says that TechStars looks for people who can “execute like crazy.”
- You’ve gotta have brains. Point blank, Broderick says that TechStars “looks for people who are smart.” In a competitive program such as this one, it’s not too much to ask that founders have some stuff rattling around up there and are able to get it out coherently.
Some Notable TechStar Grads
- BrightKite – Acquired by Limbo in April 2009
- IntenseDebate – Acquired by Automattic (makers of WordPress) in September 2008
- AccelGolf – $475k in funding
- One Forty – $2.36M in funding
- SocialThing – Acquired by AOL in August 2008
- DailyBurn – $540k in funding
- Get the full list of TechStar Grads here.
The Bottom Line
TechStars is able to attract some of the best talent in Boston, Boulder, and Seattle. Broderick says that once founders are accepted into the program and “you surround them with brilliant mentors, then the recipe for success is pretty attractive.” More valuable than the financial gain that founders receive from TechStars is the mentorship and invaluable relationships that ensue. This is truly an incredible program. Boston entrepreneurs are fortunate to have this available to use in our backyard.
To learn more about TechStars, visit their website at TechStars.org. The application process for Boston is closed but you can still apply for the Boulder program through March 22.
