Was your accelerator worth 6%? Mine was.
LawnStarter recently participated in the Summer class of Techstars in Austin. Needless to say, it was an amazing experience that has truly shaped our business. Around the same time our demo day occurred, Techstars announced their equity-back guarantee. When this happened, outsiders all formed their own opinions, but I, like all the other Techstars founders I know, simply thought this makes sense. The following is a detail of our demo day experience, illustrating why I personally think that Techstars is well worth the 6% given up.
Demo Day: How Far We’ve Come
The culmination of the three month program is demo day. By the time of our demo day, we’d been working on our business for three months, and it’s a way to showcase our business to investors and the community.
It was a rush. Everyone had been painstakingly preparing for this event, and it paid off. The presentations went smoothly for every team. Watching the presentations, it was truly inspiring to see how far every team had come since we’d first started. For us and many other teams, it was more progress than I could ever have imagined.
After the presentations, we headed upstairs to stand by our table and schmooze with investors. David Cohen and David Brown posted up behind our table to chow down on snacks, and I hear my co-founder Steve tell them, “So, uh, thanks for creating Techstars”.
Every team in the room felt the same way. We had grown so much in the past 3 months. None of us would be where we are now without Techstars.
After meeting investors, we headed out to an after party at a local rooftop bar in Austin. If you’ve never been to Austin before, it’s really difficult to understand the energy of its nightlife. It’s a city that is buzzing quite literally every night of the week with live music, unique events, and a massive influx of young and energetic people. This night, however, there was a unique energy that I haven’t experienced before or since. I met the other teams’ families, clinked glasses with investors, danced like an idiot and even soft circled an investment, reveling with my new family on how far we’d come. It was one of the highlights of my summer.
At some point that night, someone told me about the equity-back guarantee. Honestly, it didn’t phase me a single bit. Sure, there was the rush of demo day and the ambience of the party, but I remember thinking that no founders would ever take Techstars up on that offer. Why would they? I had just witnessed 11 companies make tremendous progress over the course of 3 months, mine included.
Techstars exceeded our expectations. They added more value to LawnStarter than I could have imagined. Mathematically, as long as the program improved our outcome by 6.4% it’s worth it. Yet, I’m confident that Techstars brought us in months what would have taken years for us to learn. 6% is a bargain.
FounderCon: A Lifelong Membership
The next day was FounderCon, an event where all past Techstars founders come into town for two days to meet and host seminars. During lunch, the Austin summer batch went into a different room for a meeting. It’s title: “So long, don’t fuck it up.”
During this lunch we bonded and shared sentiments. It was sad yet inspiring.
But more importantly, our MD and the head of alumni relations explained the importance of keeping Techstars updated, using their resources, and not being afraid to help. They explained how to use the network for things like fundraising and hiring, being a helpful resource no matter how good or bad things are going. I realized that Techstars added an unparalleled value, but it wasn’t until this exact moment that I realized our 3 month summer program was just the tip of the iceberg. I was still digesting how far we had progressed over the 3 month program, and now they’re telling me that this is only the beginning!
One of the biggest mistakes founders make, or have made in the past, is not using the network after the program is finished. They made it clear how much they wanted to be involved, and I won’t make the mistake of forgetting that.
They sell the value of the network, but the word ‘network’ really undersells it. It’s a family. A family worth so much that it gives you an unfair advantage over other companies.
Throughout FounderCon, I met several teams from past classes, and it became obvious that the 3 months is in fact only a small part of the total Techstars equation. One team had a similar business and offered to help with our product. Another arranged several investor meetings for us in the valley. Bill Hendricks, CEO of Common Form (a startup in the program that makes awesome 1040EZ tax preparation software) put it best when he said "After the program ended, I was meeting with a partner at one of the top VC firms in LA. He mentioned he was having dinner with Brad Feld later that night. I knew Brad had a packed agenda for his trip and that he gets hundreds of emails a day. Still, I emailed him a heads up that Common Form may come up and gave him a quick summary of my conversations with the VC. He emailed me back within 10 minutes confirming he'd be happy to put in a good word for us." Having Brad on speed dial is quite the perk.
All Techstars teams have a "give first" mentality, which we have taken on (in fact, it's what inspired us to offer any lawn care company free lawn care software). It was clear that LawnStarter would gain tremendous value from Techstars for the years to come.
But, I also learned that a Techstars membership lasts even beyond the life of our company; it’s a membership that all founders get, regardless of what they happen to be working on. I already said that Techstars improved my first company enough to offset the equity stake; I can hardly fathom how much Techstars has improved the outcome of my entire life.
One Last Night: Friends for Life
After FounderCon was over, a bunch of people from the Austin Summer class got together for one last night on 6th Street. Beforehand, sitting around an apartment, I posed the question, “Would any of you guys give back any of the 6%?” There was a moment of silence that followed that may as well have been a resounding “no.” Then Dan from Pivot Freight broke the silence. “I’d have given up 6% just to meet you idiots,” he said, oh so lovingly.
This sentiment couldn’t be more true. I’ve spent the past 3 months forming some of the best friendships of my life. The other team members are so bright, driven, and accomplished, I often wonder how I managed to get in. But aside from being total rockstars, they are a joy to be around, and I’ve had few bonds in life like that which I’ve had with my batch-mates. The friendships I’ve made through this program are something you can’t put a price - or equity percentage - on.
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So would I take back any of the 6% after the program? No, and in hindsight I may have given more. I’d be genuinely surprised if any teams ask for any stock back.
After the summer in Austin, we decided to stay here to keep growing our Austin lawn service operation, and have received incredible support from the local Techstars network. Thanks to all of you who made it what it was.
