Australia, We Hear You!

I recently spent a week in Australia. One of the things I often say when I travel to speak to startup communities around the world is: “We can’t hear you!”

My point is that I want them to be loud and proud about what’s going on there. Often I hear them lamenting about not enough capital, not enough startups, not enough success, or whatever. I challenge them to start acting like what they want to become–to start talking about their greatness.

I also ask them to start blogging. Start some dialogue.

My favorite example of this was the “tall poppy syndrome” that exists in Australia, a long-standing cultural attitude of fostering hostility toward successful people. I was speaking to a group of Australian entrepreneurs and I suggested that someone there blog that tall poppy syndrome is a thing of the past. So they did! And now, tall poppy syndrome is closer to disappearing. It’s no longer going to be cool to talk about tall poppy syndrome. It’s going to feel uncool and out of the norm

Sometimes what we believe will be true becomes true!

It’s great to see communities acting like what they want to become. And it’s great to see them making some noise:

Australia, I hear you!

Applications are now open for our first Techstars accelerator program in Australia as well!

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“No” Doesn’t Mean “You Suck”

I know it can be counter-intuitive, but just because an investor says “No,” it doesn’t mean they don’t love what you’re doing.

Keep in mind that as venture capitalists, our job is to say “No” 99+ percent of the time!

That means we often say “No” to things we love and founders we love. Even when we really don’t want to say “No,” we still end up saying “No.” Sometimes it just means we love what you’re doing, but we don’t love it quite enough to actually make the investment. Or, sometimes it’s just not in our targeting and/or thesis to make the investment.

Unfortunately, when venture capitalists say “No,” founders often hear: “We think you suck.”

The reality is that, many times when we say “No,” sometimes actually means: “We think you’re great, but we believe in something else more, and we have very limited capital to deploy.”

If you’re hearing “No,” it just means you’re a normal entrepreneur dealing with normal investors. Instead of taking “No” as an insult, take it with the recognition that capital is limited. Even though you may very well be on to something, you’re probably going to get a “No” from lots of investors. It’s just part of the game. “No” is a learning experience.

I find myself on both sides of this process. When we’re raising money for our venture fund, we might meet with 50 or 100 investors, and guess what? We’ll hear “No” from most of them. We have plenty of people that say, “We love what you’re doing, but it’s just not for us.” That’s a reasonable response from an investor, and it’s all part of the process.

So if you’re hearing “No” a lot, don’t give up. Keep your head up, and move on to the next venture capitalist until you find the right investor for you. Eventually you’ll find those few investors who really believe in you, the ones who get excited about what you’re doing and want to invest their limited capital in your startup, the ones who will say: “Yes.”  That’s when magic happens.

One last point – I see many examples where “no” turns into “yes” over time. If you’re offended by a “no,” you may forget to come back a year later. As an example, most companies that apply to Techstars don’t get in on the first try. They hear “no,” they get stronger, and they come back later. And that’s perfectly ok to do.

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Alexa, what is the Alexa Accelerator?

The Alexa Accelerator, powered by Techstars, is a new program designed to support early-stage companies advancing the state-of-the-art in voice-powered technologies, interfaces and applications.

Created in partnership with Amazon’s Alexa Fund, the program will focus on Alexa domains such as connected home and car, wearables and hearables, communication devices and more. Participants will receive an investment from Techstars and the Alexa Fund, and access to the teams and tech behind Alexa Skills Kit (ASK), Alexa Voice Services (AVS), Amazon Web Services (AWS) and Amazon Launchpad.

If you’re an entrepreneur working on integrating and advancing voice-powered technologies, the Alexa Accelerator could be a great fit. Companies selected for this program will enjoy access to the most cutting-edge technologies and will have the opportunity to collaborate with accomplished leaders working to advance the capabilities of voice interfaces and their enabling technologies.

Applications are now open. For more information, you could of course check out the Techstars website.

But, hey, if you happen to have an Echo or Echo Dot, what better way to start your journey than by asking Alexa?

Try some of these questions:

  • What is the Alexa Accelerator?
  • What is a start-up accelerator?/What is a startup incubator?
  • How do I / can I apply to the Alexa Accelerator?
  • Who should apply to the Alexa Accelerator?/Should I apply to the Alexa Accelerator?
  • What is the Alexa fund?
  • Where will the Alexa Accelerator take place?
  • When are applications due for the Alexa Accelerator?/By when should I apply…
  • What is Techstars?/Who is Techstars?
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Make Price the Last Thing

I receive lots of pitches, and one of the things I notice is that sometimes these pitches are very clear on pricing. Entrepreneurs will name the pre-money or post-money valuation, and sometimes they even lead with the pricing.

I think that’s a mistake, because if you don’t appeal to the investor on a pricing basis, it gives them an immediate reason to tune out, and chances are they won’t even pay attention to your initial pitch. If you make price the first thing, it’s an easy reason for an investor to say no to your pitch right away.

On the other hand, if you lead with your idea and they start to lean in and get excited about that, they might end up not caring that much about price at all.

Imagine you’re in a store and start admiring a ring in the jewelry case. You ask to see it, and before the salesperson even hands it to you, he tells you the price of the ring is $2,000.

That’s a lot of money, you think. Way more than you had planned to spend on a ring. You instantly decide not to buy it.

Now imagine instead that when you ask to see the ring, the salesman takes it out of the case, lets you hold it, and begins telling you about the person who designed it. It turns out you’ve heard of this artist, a much-admired woman in the local community. She recently passed away, and this was one of the last pieces of jewelry she ever made. The diamonds alone are worth more than $2,000, and there’s a good chance the ring will be worth $10,000 in a few years.

The price of this piece of jewelry is still the same, but now $2,000 doesn’t seem unreasonable. In fact, it appears that this would be a smart investment. It’s not just a ring–this is a rare and special piece of art.

Think of your startup in the same way. Wouldn’t you rather negotiate pricing with someone who is excited about what you’re doing? It gives you some leverage if the investor has developed a relationship with you and is already showing a lot of interest. You might even end up raising more money than you expected, and that could impact the price positively. So you could be short selling yourself short by talking about price right away.

Leading with the price is just a very transactional way to approach an investor. Generally speaking, it’s never a good idea to begin any relationship with a financial arrangement. This is a core tenet of the idea of “giving first.” Show value before you start talking about a transaction.

So keep in mind, when approaching investors–especially for the first time, before you have a relationship with them–leave price out of it.

Don’t make it the first thing, make it the last thing.

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Techstars Impact Report 2016: a year of milestones

The Techstars 2016 Global Impact Report was released on February 7. This report is a showcase of what Techstars has accomplished in 2016 and over the past 10 years, as well as a thank you to all the people who have contributed to the success of entrepreneurs around the world.

It’s been an amazing 10 years, to say the least. We started with the simple belief that great startups can be built anywhere. Clearly, we believe that now more than ever.

Techstars achieved several big milestones as a company and as a community in 2016. This year marked our 10th anniversary, over 100 company exits, 1,000 companies in our portfolio, and 10,000 jobs created by those companies.

These are just a few highlights from 2016:

  • Techstars companies have raised more than $3 billion in venture capital.
  • The market cap for Techstars alumni is $7.8 billion.
  • Seven new accelerator programs were launched, including our first program in APAC, bringing us to 25 programs worldwide.
  • Techstars Ventures made nearly 50 seed investments.
  • Thanks to our Community Leaders, Startup Week grew by six new countries.
  • Eight amazing nonprofits received a grant from the Techstars Foundation.

Ten years ago we started Techstars because we wanted to help entrepreneurs succeed. We are continuing to do just that, on an ever-increasing scale.

Techstars helps entrepreneurs make the connections and access the resources they need to be successful. Through the Techstars Worldwide Entrepreneur Network, founders and their teams are able to connect to other entrepreneurs, experts, mentors, alumni, investors, community leaders and corporate partners that will help their companies grow.

I’m incredibly proud of what we’ve accomplished over the past decade and grateful to all the people who have helped make Techstars what it is today. I look forward to seeing what new developments and adventures the next 10 years will bring!

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How to Choose an Accelerator

(This is second in a series of 10 blog posts from my interview with Scott Gerber for the Inc.com Founders Forum. We discussed a bunch of topics including choosing an accelerator, mentoring, acquisitions and the tech talent shortage. You can watch all of the videos on Inc.com.)

Here is the full video interview on this topic. Some text excerpts are below.

How do you determine if an accelerator is worth it?

Overall, I feel like accelerators are a positive thing. My view is, if they’re investing and providing mentorship to startups, they’re by definition helpful. They might not all be economically successful, but they can improve their communities and provide a network, which I think is the most valuable takeaway from a quality accelerator.

What should you watch out for?

I’ve seen programs started by people who aren’t entrepreneurs. You really need to have people with entrepreneurial background and operating experience in the middle of the activity. And then, some accelerators offer overreaching terms, like 10 to 20 percent equity stakes being taken for almost no money invested.

It’s really important for an accelerator to be open and transparent with their results. They should be open about who has been through the program and what kind of outcomes those companies had. If they’re not transparent, then that’s a major red flag.

Defining a set of standards

Techstars decided to start the Global Accelerator Network (GAN) in 2011 to help bring standards to the industry. We wanted to define a set of standards that seemed reasonable and beneficial to entrepreneurs, which is what we’re all about. GAN is an independent organization designed to deliver best practices and build network among accelerators. We don’t own or control any of it today, it was just a gift to the global startup community because it needed to exist. Today we are simply members like many other accelerators.

What are the definitive pillars of a successful accelerator?

I can tell you the right mix for a program that has a basis to be successful:

  • Founded by people with a strong operating background
  • A great set of mentors who are digging in and engaging
  • Upfront funding for a reasonable amount of equity

But ultimately, the only true measure of an accelerator’s success is the success of the companies that go through the program. Important to check out their stats, if they are willing to publish them. Here’s ours.

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