An Open Letter to Startup Founders Everywhere in a Time of Crisis

March 30, 2020


I’m talking to you. I’m one of you.

Your world and mine are different than they were three weeks ago. 

A virus has changed everything for your businesses and for your family. 

You’re being bombarded by advice for what to do (including mine), and trying to figure out how to make sense of it all and how to apply it to your own business.

I’ve started four companies, and my latest is Techstars. I’ve seen past crises, cycles, and downturns as an investor and as a founder. I know you are fearful of what might happen to your business. It’s OK to be scared. 

The purpose of fear is to create immediate action. 

Now is the time for you to rise up. To lead. Now is the time for you to adapt, to show your strength. Use your advantages. Do more faster. Emerge stronger.

You can do this. We are all rooting for you to do this. You are the engine of our future, after all. You are the employers of tomorrow.

In the early 1990s, we were in a recession triggered by reduced defense spending at the end of the cold war, the 1990 oil price shock, and a savings and loan crisis. This recession lasted until 1994. 

I started my first business in 1993, right in the middle of the recession, because I didn’t know any better. I didn’t really see how it would affect me. We raised a lifetime grand total of $100,000 for that business in the form of advance payment from early customers. In 1999, we sold that business and I started angel investing. 

In 2000, the Internet bubble burst. By 2002 the NASDAQ had fallen by nearly 80%. Starting a tech company after this? Or even working for one? You must be nuts.

Sudden change.

In 2001, the towers were hit. It changed everything overnight. Nobody saw it coming. The financial markets quickly gave up more than a trillion dollars. Travel, insurance, and similar industries took huge hits. 

Sudden change.

I started more new companies. One in 2004 and one in 2006. One worked, one didn’t. I increased my investing pace.

Around 2007, the subprime mortgage crisis contributed to a recession that lasted through 2009. 6% of the workforce lost their jobs during this time. Financial institutions came crumbling down. Fear and panic set in.

Sudden change.

Founded in 2006, Techstars ran our first startup accelerator in 2007. The nerve! We learned how to do things cheaply. We spent a total of $140,000 on our first accelerator program for ten companies. Each company in those early accelerator programs got just $18,000. They all took a chance on us. The average post accelerator round that year was $500k and the average pricing was around $2m pre-money. 20% of your company for $500k was the norm. The market sucked until around 2010 when everyone and their sister decided they wanted to create an accelerator too. Why not? The market was back! But we were already four years ahead of them. We used that time to build a brand and to create hope for many when things were hard.

What begins in harsh conditions learns to thrive in any condition. 

Near the end of the recession in 2009, I invested in Uber, Twilio, and SendGrid. All eventual unicorns. All in one year!  Each of them had fewer competitors and therefore more access to capital. Uber took the shockingly low valuation of $4m when raising it’s first $1.5m. Twilio? $3m valuation. SendGrid? Less than a $2m valuation for their seed round. They all did just fine. They did what it took to raise money in tough times. They made it through. They had a huge head start on anyone that finally got up the nerve to try to compete with them when the market finally came back. They were ahead, for good. 

Now, in 2020 our bodies are being attacked. For the rest of our lives, we’ll all remember this global pandemic that changed everything.

Sudden change. 

But you know what else we’ll remember? The iconic companies that some of you are building right now. We need you more than ever.  

Sudden change creates opportunity for those who dare. I’m not talking about the short term opportunity to take advantage of market conditions. I’m talking about the opportunity to persist and live your dream while others give up the ghost or never even dare to try. 

You can’t be stopped. You have a window. The time is now.

All the A players will work with you now if you are strong. Other startups will fail, and you can acquire their talent, their IP, their customer bases for cheap. All the rewards go to those who can survive. 

Techstars is here to help. We’re going to keep growing and keep investing. Because we know that this is the time for founders everywhere to step forward, not backward.

You can learn more about the resources we’re creating for startups at, including plenty of advice and the economic commitments we’re making to our portfolio of startups right now to help them succeed, and you can meet our inspiring community of tens of thousands of the worlds best mentors, founders, and investors at

See you soon, I’m sure.


file under: Startups