TechStars Demo Day is certainly the talk of the town today, particularly among start-up investors and entrepreneurs. Thirteen companies presented to an audience of 500 investors, half Angel, half VC, yesterday. Premier tech journalist Scott Kirsner estimates that the speakers had lined up commitments of $5.5 million before the meeting even started. I doubt our venerable City on a Hill has ever seen the likes of this event before; there will be another one coming up at the end of the year.
If you would like to know more, click here to read Kirsner’s scorecard of the companies: what they do, who's involved, and how much money they've raised or are seeking. He also presented his own innovation economy awards. His Most Compelling Presentation award went to Chris Howard of Libboo. Click here to see the others.
TechStars is what a called an accelerator in that it provides workspace, advice, and that most scarce of resources, cold hard cash, to fledgling entrepreneurs. Companies accepted into the program receive $18,000 in seed funding in return for six percent of their stock. They are also offered an additional $100,000 in convertible debt. Participants get free office space for the duration of the three-month program, mentoring, and the opportunity to present to a group of investors at its conclusion.
TechStars is a relatively new concept. It was founded in Boulder by David Cohen, Brad Feld, David Brown, and Jared Polis in 2006. In 2007, I invited CEO David Cohen to speak at our regional angels’ syndication meeting here in Portsmouth, NH. In 2009, Bill Warner, impressed with the program’s success in Boulder, pushed Cohen and Feld to clone the program here in Boston. About six months ago Katie Rae became the Managing Director here. The results are both obvious and gratifying. Congratulations to all involved.
Some brief thoughts. If you are an entrepreneur, work even harder. This program is exceedingly competitive, only one per cent of the applicants for this session were accepted. And buy a Charlie Card, you'll be going to lots of seminars and meetings.
If you are an angel investor, keep searching. Without good connections, you’ll most likely be shut out of these particular financings. But since these companies represent only one per cent of those applying, search for pearls among the other ninety-nine per cent. Look particularly at local companies that might not fit the TechStars profile.