@February 26, 2024
After several days of fielding messages and phone calls about the Techstars 2.0 (or “why did Techstars kill the Seattle Accelerator??”) news, I felt compelled to share some thoughts. Many of my esteemed colleagues have already published very well-articulated commentary about the news — including David Cohen, Nicole Glaros, Isaac Kato, Chris at Founders Coop, others.
To start, in case you missed it, the TLDR is: Techstars is entering a new phase of its growth and launching Accelerators 2.0. It’s been about 2 years in the works and as part of this, the firm will double down on markets such as San Francisco/Bay Area and New York and scaling back on ecosystems such as Seattle, Boulder (Denver is still alive and well), and Chicago. This shift in focus is partly driven by a desire to concentrate activity around capital formation (raising from LPs) and deployment (investing in ecosystems with very dense venture capital activity). Having worked on both of these efforts at Techstars, I think the decision to trim and focus is a sensible and necessary choice.
what got us here won’t moves us forward
As I look back at my time at Techstars, I do often feel nostalgic about when the firm was smaller. Back then, I had significantly more direct interactions with our founders, and I was available when they needed me the most. I was able to show up for our founders in the right time and place. Specifically for Seattle and Chicago — I got to visiting often and engaging with the investors, LPs, and founders in both ecosystems. I love the energy and the unique perspectives both tech hubs have to offer; and know full well that there is both an abundance of innovation and capital. As it’s widely known, many of the top companies from Techstars did find their start in Seattle. However, as Techstars continued to expand, I had to come to terms with the fact that, for the firm to fully release its long-term ambitions, it was - and is - necessary to continuously iterate, innovate, and take big swings — even if they might be somewhat polarising.
In my 5 years, I had the privilege of seeing substantial organisational and business evolution. When I first joined, Techstars was just moving away from its former ‘city funds’ model, where Accelerator MDs would raise funds from local LPs to sponsor new programs. Since then, Techstars has successfully raised several institutional funds (including the Advancing Cities Fund with J.P. Morgan) and expanded from 30 programs to 50 globally. Additionally, at some point in the past 2 years, Techstars also passed the $1B AUM mark. The effort that goes into launching individual Accelerator programs that serve individual ecosystems perfectly, and the work that it takes to construct a global investment platform, are very different tasks. In supporting all this growth, I saw first hand what Nicole put so eloquently, that, “on a local community level is very difficult, dare I say impossible, to pull off on a global scale.”
Silver Lining
Nature (sort of) abhors a vacuum and I have full faith that we’ll see emerging investors, founders, and community leaders fill the new space and thrive off the work that historic Techstars had done in those respective ecosystems. Already, Natty and Nicole are working on new things for the Boulder. I know folks in Seattle are already in conversations for new, more fit-for-purpose, mechanisms to serve the community. My hunch is that the new generation of pre-seed investors and accelerator managers will serve the respective ecosystems very well — perhaps even better than Techstars.
Finally, of course it’s possible that Techstars gets this wrong. Sure, it might not work out. Business decisions are hard — especially in venture where feedback loops take years. But what if it works? Like the startups we invest in, we’re betting on the odds — even if there’s a small % of ridiculously outsized outcomes, it’s worth considering.
If this were to work out, it’ll empower tens of thousands of new entrepreneurs and innovators. What a magical thing that’d be for the world.
If you are ideating in these ecosystems, let me know.