Techstars, the international network of startup accelerators, marks its fifth year in Seattle with some significant changes coming in how it presents its companies to investors, and in its local leadership.
Another 10 promising startups completed the three-month, intensive business development and mentorship program Thursday, giving short, polished pitches to an audience of hundreds of Seattle investors and startup community members.
Their ideas range from Garmentory, which is helping fashion boutiques market themselves online, to Crowsnest, a purveyor of digital picks and shovels (crash reports, to be specific) for the Internet of Things gold rush—a Seattle tradition going back more than a century, even if the company’s founders hail from Syracuse, N.Y.
But none of the founders who took the stage mentioned the amount of capital they are looking to raise, or have raised already, or even if they were raising—though of course they are—as they have in years past.
“Today, they’re not allowed to ask for your money,” Techstars Seattle managing director Andy Sack told the crowd. “I can. A number of companies are close to closing their round. They’re all raising.”
(Sack is handing off leadership of the program to his business partner of more than 10 years, Chris DeVore. More on that below.)
Sack then politely asked the community members in the audience to exit and the investors began some intense mingling with the company founders, no doubt discussing the specifics of those funding rounds.
Changing rules and increased regulatory scrutiny have caused startups and accelerator programs to tread carefully with their public statements and events, lest they run afoul of limits on general solicitation. Techstars is experimenting with a new model for Demo Day in which its companies make their pitches to small, invited groups, as well as to a large audience that includes people who are not accredited investors.
Techstars co-founder and CEO David Cohen told Xconomy that this year in Boulder, CO—where Techstars began in 2007—they did just that, renting out suites at Folsom Field and inviting “the most active investors” to attend. There were about 10 investors in each room.
“It was very intimate,” Cohen said. “A company [founder] comes through and just sits on a stool and just talks to you for five or 10 minutes. Much more informal.”
“You’ll probably see us try that here next year,” he added.
Cohen also reflected on the track record of Techstars in Seattle and in general. Some 50 companies have completed the Seattle program, and 400 more have gone through programs in other cities and with its corporate partners, such as Microsoft and Barclays. Those 450 companies have raised more than $1 billion in venture capital, he says.
Cohen is often asked why Techstars does not run an accelerator in the San Francisco Bay Area—the center of the tech startup universe.
“It’s not that we’re at all anti Silicon Valley,” he said. “We think it’s an amazing place, but as Techstars we’re pro everywhere else. We believe in startup communities like the amazing thing that’s happening here in Seattle.”
(Cohen, DeVore, and Sack are Xconomists.)
DeVore—who is taking over as managing director from Sack, his partner in Northwest-focused early stage venture capital firm Founders’ Co-op—expanded on this idea in an interview earlier this fall.
“To me the narrative is really what is the future of innovation and where can innovation happen?” DeVore said. Techstars believes “innovation can happen anywhere, and what the Bay Area excels at is innovation finance.”
He added, “Demonstrably, really cool companies are being built in lots of cities besides San Francisco, and being in the business of empowering entrepreneurs to build a great company wherever they want to do it—whether it’s Austin or Boston or Seattle or New York or London or fill-in-the-blank—that’s what Techstars stands for and that’s what we stand for.”
Cohen, listing the big name out-of-town venture investors that have backed Techstars Seattle companies, said, “The whole country is paying attention to Seattle and what’s happening here.”
Much credit for that goes to Sack, he said, who has headed the Seattle branch since it began in 2010.
Sack, tears in his eyes, thanked his family and the assembled Seattle startup community, who reciprocated with a standing ovation.
“I’ve been fortunate to be in service to the entrepreneur ecosystem, the entrepreneurs, the investors, and it’s truly just been my honor,” Sack said. “So thank you for allowing me to love you all.”
He added, “If you don’t cry during your entrepreneurial journey, you’re not working hard enough.”
