David has a summary of the great first week at TechStars. The Intense Debate guys weighed in with a post of their own and the energy in the room was huge on Thursday night when I was part of a panel with Greg Reinacker, Andrew Currie, and Jason Mendelson. It’s pretty awesome to hang out with 26 people that are at the very early stage of creating new companies, completely fearless, and focused on doing something great.
One lesson from their backyard came if any of them ran in the Bolder Boulder. If you don’t know about the Bolder Boulder, it’s a 10k race run in Boulder on Memorial Day that is now one of the largest 10k’s in the world. This year everyone had an RFID chip on their shoe and was tracked throughout the race. According to Steve Outing (I didn’t run it – I went and hid in Keystone for the weekend) there were a few problems – as Steve says, Version 1.0 seldom works well.
To bad there wasn’t Facebook integration also. That way you could check out how your friends were doing during the race on your cell phone while you were running. Or you could just follow Tim Wolters advice and be Mindfulness.
I know David Cohen is excited – I hope the TechStars teams are. The Denver Post had a nice article on How TechStars was born which includes several very silly pictures of us including one of me and David pretending to smash guitars while Jared talks on the phone and intelligently walks away from the nonsense going on in the background.
The real stars of TechStars are the entrepreneurs, which the Denver Post got right. The supporting cast includes the awesome list of mentors that we have lined up for the summer.
The list continues to grow. If you are a successful entrepreneur in Colorado and want to get plugged into the mentor program (or are a successful entrepreneur outside of Colorado and want to come play in Boulder for a few days), drop me an email and I’ll see if we can make something work out that makes sense.
The nice folks at PodTech interviewed me and David Cohen about TechStars. In David’s words: “It’s another fantastic way to waste 9 minutes of your life before you get back to working on your startup (or whatever).” Plus there’s a neat Theresa Chong painting in the background.
If you’ve been thinking about applying to TechStars but have been procrastinating, the time to do it is now as the application deadline is Saturday 3/31/07. While we currently have over 175 quality applications, they are all on equal footing until 4/1/07 when we start the hard work of choosing the 10 finalists. In the words of a wise young man, “if you don’t ask, you don’t get.”
I got a note from David Cohen earlier this week that we’ve just passed through the 100 applicant mark for the TechStars program this summer in Boulder. Our goal was 100 so we’re delighted. If you are interested, there’s still plenty of time to apply (applications close on March 31.)
I’ve been pleased to see that the reaction to TechStars has generally been very positive. We’ve been pleasantly overwhelmed with quality applications for the program – over 75 to date for the 10 spots. There are still 52 days to apply, so if you are thinking about it, I encourage you to give it a shot.
Of course, there has been some debate about whether or not TechStars is “worth” giving up 5% of your equity. I thought I’d take a crack at addressing this and further explaining what we are trying to do with TechStars.
The answer to this question depends on your situation. If your company is funded, or clearly worth millions today, then TechStars is probably not for you. Perhaps some people might think that their idea alone is worth millions, and so they won’t apply. I can tell you from first hand experience that your idea is not worth much until you execute in such a way that you create real value. On their own, ideas are usually not worth the napkin they’re scribbled on. I am exposed to thousands of ideas every year (and often have several each morning while I’m in the shower) – only a handful of entrepreneurs will successfully build something around their idea and create meaningful value.
Perhaps when you consider the opportunity presented by TechStars, you will calculate that the initial valuation of your company is between $100,000 and $300,000 (based on the share of equity TechStars gets for the cash it puts up.) Some entrepreneurs will naturally argue that this is a low valuation. Conversely, many investors will argue that it is quite high. In time, one will be proven right and the other proven wrong. But if you’re looking at TechStars and the only value you see is the seed funding, then you’re missing the point of what we are trying to do.
You can’t easily assign a value to what TechStars provides, but we believe it goes well beyond the value of the seed funding. The educational opportunities alone are potentially life changing. What’s the value you’d place on access to the mentors who are involved? How long will it take you to assemble the large investor audience that we’ve lined up for you to pitch to at the end of the summer? What’s the benefit of an experience like this really worth? Hopefully, the answer to each of these questions is “much more than the seed funding alone.”
The value of TechStars is even more compelling if your company will need to raise more money. You’ll be in a great position to pitch to investors at the end of the summer, due to the coaching, advice, and mentoring provided by TechStars. Investor day brings active angel investors and venture capitalists right to you, and maximizes your chances of getting further funding. Because TechStars is vested in your success, it’s in our best interest to help you obtain more funding. Our initial 5% equity will be diluted by this further financing because we don’t ask for any dilution protection, rights of first refusal, or special controlling provisions (we will have common stock, just like you.) But we’re ok with this dilution because it’s fair, equitable, and further increases your chance of success, which again, is what it’s all about for both parties.
Think of TechStars not as a source of capital, but as a co-founder that brings a little money to the table. TechStars will be successful if your startup becomes a huge success, adds value and meaning to the world, and creates wealth. In the end, your company will likely either be worth something or nothing. Once you start thinking about this in binary, you should quickly realize that the whole game is really all about improving your odds, especially early on. We think TechStars can greatly improve your chance of success.
About a year ago, David Cohen – a successful entrepreneur, now an active angel investor, and author of ColoradoStartups – approached me about an idea he had about creating a startup bootcamp in Boulder for the summer of 2007. I immediately loved the idea – create an environment for up to about 10 teams / 30 first time founders to start up companies, give them a small amount of financing but support them extensively with an ecosystem of experienced entrepreneurs, have an intensive three month startup period, and see what comes of it. I introduced David to Jared Polis – a close friend and extremely successful entrepreneur – who also loved the idea. We committed quickly to co-found the program with David and his partner in his first business – David Brown.
There are a few other organizations – such as Paul Graham’s Y Combinator – that have done similar things in other parts of the country. David studied each of these projects and talked to some of the folks involved as he crafted the idea for TechStars. Having been through a number of iterations of the idea and plan, I’m very excited about how it has evolved and what we ended up with. For the quick summary, take a look at the FAQ.
In addition to being an amazing place to live (not withstanding the horrible winter we have been having – I promise all the snow will be gone by the time TechStars starts), the entrepreneurial ecosystem in Boulder is awesome. When I moved here (somewhat randomly – I followed Amy – always a wise move for a husband) in 1995, I didn’t expect to do any business here. Imagine my surprise when I found a vibrant and experienced entrepreneurial environment – looking back 11 years later, I can say with confidence that Boulder is one of the top 10 cities in the US to start a tech company.
TechStars brings together many of the best of Boulder’s local entrepreneurs, schools and investors. The mentor list is extensive – people like Kimbal Musk (Me.dium CEO), Mark Sawyer (@Last CEO – now owned by Google), Greg Reinacker (NewsGator founder/CTO), Todd Vernon (Lijit CEO, Raindance founder/CTO), and 20 of their closest entrepreneurial friends will be actively involved in the program. Many of the sessions – which run several times a week from 5/21/07 to 8/16/07 – are organized around these mentors and their experiences.
Each team will get seed funding of up to $15,000. While the seed funding is nice, the real value is the advice, mentoring, and connections provided by TechStars. When I started my first company – Feld Technologies – in 1987, I had a few mentors which I’ve written about in the past. However, the notion of having a summer full of concentrated mentors, surrounded by 20+ other entrepreneurs starting up their own companies, in one of the most beautiful and fun cities on the planet, blows my mind.
If you’re going to do a startup, this is a once in a lifetime opportunity. Consider applying and get off to a great start. We’d love to spend the summer with you.