Don’t go dark

I’ve had a couple of situations lately where a portfolio company founder or CEO went dark on me. They just stopped communicating. Sometimes takes me a while to notice it. When I do, I usually check in with the person and just ask something like “Hey – I haven’t heard from you in a while, how’s it going?” Sometimes the response is benign, and all is more or less ok with the company and people in question. Perhaps they’ve just forgotten to update their investors for a while, or it’s been a particularly busy time for some other reason. In those cases, my checkin serves as a gentle reminder.

Other times, as you might expect, it’s more of a doomsday scenario. They went dark because stuff wasn’t working. There was nothing good to tell their investors about, so they just said nothing. It’s been a long time. Now the company is out of money, out of options, and the person just doesn’t know what to do next. “Any ideas?” they ask.

“Not at this point” I think to myself. With no runway left they’re out of cash already and living off the founders credits cards. All the employees are gone. They forgot to update investors along the way, so there’s no way to help at this point except coach them on how to shut down gracefully.

Don’t let this happen to you! Communicate bad news early, you might be surprised at how your investors can jump in and help. As an example, Techstars now has a large full time team just working on corporate development and M&A. We’ve completed over 100 M&A transactions, and we probably could have helped create some kind of positive outcome if we only knew you were in trouble earlier.

At Techstars, we’ve put systems in place now to see who we’re not hearing from regularly so that we can be proactive. But most angel and seed investors don’t have systems like this. When stuff goes badly, don’t go dark. It’s a huge mistake for so many reasons.

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Rethinking corporate innovation at Techstars

At Techstars, we’re building the best global ecosystem for founders to bring new technologies to market. One of the impacts that I think we’ll have long term is to change the way that corporations engage with startups. We want to help make those engagements effective and efficient for both parties. We do this in a few different ways.

First, we have an internal team of five people that focus on corporate relationships. They’re the folks who do amazing things like BizDevDay at Foundercon where there were 1500 meetings in a single day between big companies and our portfolio. They also work on M&A when necessary, and we recently completed our 100th M&A transaction out of the Techstars portfolio. They have deep relationships with most of the important large corporations in our space, and are constantly making connections to Techstars companies. From the large corporations perspective, they might think of this activity as corporate development or “corpdev.” We think of it as leveraging our scale to assist our portfolio of amazing startups.

Second, we partner with large corporations to build accelerators, like Techstars Music, Techstars Mobility, or Techstars IoT.  In working with so many large corporate partners, we’ve learned that some of them engage with these accelerators with a short term view, and some with a long term view. Let me explain.

When a corporate engages with an accelerator or with startups in , their short term view might entail them thinking about which one or two of these companies could “move the needle” for their stock, or fill some current strategic gap. They engage with the accelerator as if their job is to cherrypick. That’s all well and fine and it produces near term results in many cases, but it’s also short term thinking.

Other partners engage with a long term view. They lean in, and #givefirst which may at first feel somewhat alien to them. In this mode, the partner is thinking about how this could impact their business in 5, 10, or 20 years. They’re thinking about the startup ecosystem they are building around their own company, technology, and areas of interest. They’re trying to grow more cherries to pick later. The long term thinkers understand that current opportunities are only a small part of their role in growing an ecosystem around themselves. They lean in long term.

Startups are a long game, not a short one. As our partners actively re-think what corporate innovation means, they’re learning that it’s about both long and short term focus. They’re learning that they need corpdev programs that move the needle now, but they also need to grow the right ecosystems around themselves. And that times time, and patience. It takes good and helpful behavior around startups with a 20 year view. They are learning to be consistent in their approach to #givefirst. They are learning to leverage startups for innovation. And when they get it, when they start thinking long term in the context of startups… it’s pure magic.



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20 years without my father


My dad died 20 years ago. For a few years, I’ve had this post on my todo list and the due date has arrived. I was both looking forward to it and dreading it a bit.

After 20 years, your memories of someone who is gone tend to condense. They’re summarized in your brain like a highlight reel. Those highlights, I suspect, represent the core of what the person meant to you. So, what are the highlights that are left in my brain about my dad?

First, humor. There were many times when my father would literally be laughing so hard that he was unable to talk or breathe. He loved the Pink Panther movies and we’d watch them over and over together. We’d be on family vacations playing some stupid board game and we’d need to wait 10-15 minutes until we all stopped laughing. He had a great sense of humor and these are my fondest memories of him. As  a specific example, the clip below would always set him off for 10 minutes or longer.

The second highlight of him in my brain is kindness. Whether it was rescuing and caring for 11 puppies found underneath his office building abandoned by their mother, or giving a yard work job to someone down on their luck that nobody else would give a chance, this epitomized my dad.

The third highlight was of him as an entrepreneur. He started his own accounting firm and merged it with another. And it was built to last. Even though he’s been gone twenty years, that firm is still going today and is called Cohen, Smith and Company which I view as quite an honor. I used to work in his company doing payroll data entry for his clients when I was a kid. I remember being amazed that you could build a company from the ground up, create jobs for people, and make it in your own image. In his own way, he was making the world a better place for his customers, his employees, and his family.

Fourth, he was a really good tennis player. He had an amazing slice backhand. He taught me how to play at a beautiful tennis club that he helped build with a bunch of other families (another entrepreneurial activity). I remember going to the site with him that was nothing more than a field of kudzu that he had to chop down along the path just to show us where the courts would be.  I basically grew up at that club.

I'm on the right.

I’m on the right.

Since he passed away, I’ve had a recurring dream. It’s happening less often now, but for a while there it was 4 or 5 times a year. In that dream, we’re usually on a vacation, just spending time with each other. It’s the current year, my family is there, my kids, my wife, my brother, my sister, and my mom. And my dad. He’s just there, and it’s normal. We all seem to understand that he died, but in the dream it’s common knowledge that even though that happened, he’s just back. He looks just like he did 20 years ago, although everyone else has aged. There’s nothing special about the scene, he’s just a part of it. He’s laughing and smiling, he’s a part of the normal conversation. Inside the dream, I know I’m dreaming. I’m hoping I don’t wake up for a while.

When I finally do wake up, I have a thankful feeling for being able to spend a few more minutes with him. And it reminds me to laugh, play tennis, be kind, spend time with family, dream, and change the world for the better. Just like he did.  I like that dream.

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My first post about Yoga Pants

This is my first post about yoga pants, but hopefully not my last!

Believe it or not, dress pant yoga pants is a huge tech story. Better yet, a Techstars story!

Betabrand is a online clothier that outfits Web communities, and, this month, they’re donating to the Techstars Foundation based on sales from their top product! That’s right, dress yoga pants!

Go buy a pair or three and you’ll not only look amazing (or help someone you love look amazing while being super comfy), you’ll be contributing to help women and other underrepresented groups in high tech entrepreneurship! We call it Yogaid. No brainer!

If that’s not enough motivation, you can see some of the super-awesome female founders of Techstars companies wearing the Betabrand gear on that same page.

Time to go check it out!

Here’s a click to tweet if you want to spread the word!

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Dropping an investor

I’ve seen a few cases recently where a startup decided to remove a particular investor from their regular “update” emails. The startups were doing this because they found out that the investor had invested in (or otherwise supported) another company that they viewed as competitive.

Fast forward a year or so, and the startup needs more money. The investor they haven’t been communicating with feels frustrated, having not heard from them in some time. It doesn’t feel very good to them to invest again because of this.

The fix is easy. If you’re worried that an investor has a conflict of interest, just talk to them about it. If you still don’t feel comfortable, try sending them a slightly “filtered” email update. But be transparent with them about why you’re doing that. In most cases, the investor will either understand or give you a good reason why your impression was wrong in the first place.

The problem arises when you stop communicating and don’t even explain why. This is never good.

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Pitch Your Insiders First

Imagine you’re about to go out for your next round of funding. Who do you pitch first?

It should be your insiders! Pitch first to those who have already invested. They are the most likely to give you direct and honest feedback to help you make your pitch better. They’re also more likely than anyone else to invest (again).

At Techstars, we’ve invested in more than 800 companies. We helped hundreds of them raise Series A rounds after their initial seed round. We’ve helped our accelerator program alumni raise billions of dollars. We want to help, and we are good at it. Yet it amazes that some companies still just hit the market without asking us or their other insiders to give them critical feedback on their pitch!

From our vantage point, it’s easy to see a correlation between those that pitch their insiders first and those who have the shorter and more successful follow on fundraising experiences. It’s not just about the feedback they get by pitching insiders first, it’s the awareness they generate. This often leads to introductions, re-investment from the insiders, and other goodness.

Don’t be silly. Pitch your insiders first!

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