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May 20, 2010

I’m at a small conference in New York of early stage investors.  One of the panels was on alternative early stage models.  Tom Keller from TechStars was speaking, and there were some grilling from the audience about the ability for a program like this to generate a meaningful amount of value. 

I’ve also heard offhand comments from folks in other venues that incubators like TechStars start little companies or features that can never be important businesses. 

In my view, this is quite short sighted. It is true that TechStars makes relatively small investments in very raw companies.  So far, they have had a number of successful exits, but have not yet had a large scale win by VC standards (although it’s too soon to tell for many of their companies.)

But what you are seeing is a major improvement in the quality of entrepreneurs and the pace of entrepreneurial activity in all the geographies that TechStars operates. Young entrepreneurs are getting more shots on goal, and more shots on goal results in more small wins AND more venture scale companies.

Consider SocialThing. I chatted with Matt Galligan before he joined TechStars four years ago.  He was working on a “small company” that eventually got acquired for $10M by AOL.

Matt was able to work within AOL to continue to develop his product within a larger platform.  He walked away from SocialThing an infinitely better entrepreneur and operator and made some meaningful money that gave him flexibility to pursue his next thing.

Matt is now the founder and CEO of SimpleGeo (with Joe Stump, another strong young entrepreneur). They have raised just under $10M from RedPointFoundry,First Round Capital, and a number of prominent angels.  They are going for a big win and are making amazing progress. 

I would consider SimpleGeo a part of the TechStars portfolio.  It’s a former TechStars entrepreneur, the company is building its team in Boulder, and multiple TechStars investors are also investors in SimpleGeo.  Matt is also an active mentor for new TechStars classes. 

What an amazing outcome for TechStars.  And I think we’ll have many more stories like this in Boulder and elsewhere. As the next class of TechStars Boston wraps up, I’m particularly excited to see the long term repercussions of the program as more entrepreneurs get great mentorship and more shots on goal. 

  • Author robchogo
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    @lukethomas14 thanks Luke
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    congrats to the team @Venrock on their new fund! Nice job @pakman @miketyrrell @NickBeim @aaronwhite
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    want to know what we've been looking at @NextViewVC recently? My partner @davidbeisel answers that question here - http://t.co/RJHv1eFVvK
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    @gregbettinelli congrats on Trunk Club!
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    My latest blog post: A Behind-the-Scenes Look at Our Recent Seed-Stage VC Investments http://t.co/NqGPZD9Ix0

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