Business Incubator Series: An Interview With David Cohen, Founder And CEO, Startup Accelerator TechStars – Boulder, Colorado (Part 2)

By guest authors Irina Patterson and Candice Arnold

Irina: How many companies have you incubated?

David: We’ve now done 81 companies. We’ve operated for four years in Boulder, two years in Boston, one year in Seattle, and it’s our first year in New York. We’re not expanding anymore. If you add all those up, about 10 per class, you get to 81 as the current number.

Irina: And how many have incubated in the past 12 months?

David: Every 12 months, we’re now funding 40 companies. We have four programs. There are four cities. Each one takes about 10. It works out to be about 40 a year on an ongoing basis.

Irina: You said team is the most important factor?

David: It is the most important. If you don’t have the raw talent on the team or the overall dynamic to be able to build and market the product you’re talking about, we’re not likely to find it. We’re not just about having a few technical people. We like to see a good balance on the team. Although we tend to skew toward technical, because that’s how early stage companies should work.

Irina: Do they have to have a particular level of experience?

David: No, not really. Generally, TechStars has appealed to first-time entrepreneurs. Now, we’re seeing a lot of third- and fourth-time entrepreneurs applying to the program. They’ve gotten the value of being in this network and getting easy access to funding and great mentorship.

Still, we’re happy to take first-time founders who really don’t have much experience beyond, “Hey, I have this idea, and I have this prototype. I’d like to figure out what to do with it.” We’re totally comfortable in that zone.

Irina: What are the core benefits of the TechStars program?

David: The primary way to think about it is [as] just a general accelerator of what they’re doing. The common thing founders say coming out of it is, “I spent three months, and it was like three years in the wild.”

So, the specific things are network: They get to tap into this broad, national network of super experienced mentors and investors. That’s one thing.

The second thing is mentorship. They get great feedback on what they’re building, the market, how to approach it, pricing, everything. It’s just general mentorship on what they’re doing, which helps them to make better decisions about their companies more quickly.

The third thing, I would say, is efficient access to competitive funding environments. When they stand up on demo day, there are usually 400 or 500 investors there. That’s a great opportunity to raise capital in an efficient way, both in terms of time and in terms of value that they can get for their companies at that point.

Irina: Is there anything that set TechStars apart from other incubators?

David: Yes. These things are funny. TechStars is lumped into the Y Combinator and Seedcamp group. All three of those, to me, are incredibly different. It’s not that one is necessarily better than the other. We, obviously, have our belief that broad mentorship and community support is really important. So, TechStars is about those two things.

It’s about mentorship, and it’s about community. It’s not about David Cohen being the guy in the middle who knows everything and tries to tell every company what they should do. Rather, it’s getting five to ten great mentors to focus on each company, from day one.

It’s a very open process. If venture capitalists want to be involved with those companies from day one, they can be. There is no “closedness” to the system. TechStars is open in that sense and is about community and about broad mentorship from a wide range of people. Each company gets that five or ten to one ratio of mentorship. That’s what we think is different. That’s different from Y Combinator.

What’s different from Seedcamp is I think that we are a process that these companies go through; it’s an extended, 13-week program.

I would say the same is true as you look down the line of programs. There are many that are using the TechStars model of community and mentorship, and that’s what the TechStars Network is all about. It’s saying, if you’re using that model, we’ll try to help you. We essentially open source what we’re doing to people who are doing it that way. But I do view it as very different from Y Combinator.

This segment is part 2 in the series : Business Incubator Series: An Interview With David Cohen, Founder And CEO, Startup Accelerator TechStars – Boulder, Colorado
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