As Techstars retools, some former staffers say it lost focus on what made it successful
Reading Time: 2 minutesWell-known accelerator group Techstars announced a slew of changes to its operations this week, including the shuttering of some of its city-based programs.
Given its extensive global footprint and lengthy history of investing in early-stage startups, changes to how Techstars operates will impact founders, and local venture ecosystems around the world.
The local connection
In the wake of Techstars decision to pull back from certain markets, former Techstars Seattle managing director Chris DeVore penned a lengthy note criticizing the group’s strategic choices, including centralizing its fundraising efforts, and building programs with corporate sponsors as financial anchors.
The org’s CEO Maëlle Gavet hopped into that discussion and publicly engaged in a back-and-forth with him.
DeVore made a similar argument in his post, and said the choice to centralize fundraising away from local cities also had repercussions for the talent TechStars could attract.
After it became ‘clear that many of the new programs and MDs were struggling to raise their own, local funds,’ he wrote, the result was an ‘eviscerat[ion of] the incentive system that had attracted high quality Managing Directors to run programs, and had bound together investors and mentors in each local market.’
The shift away from local capital and more focus on corporate dollars meant that city-based boosters and founders were less central to Techstars’ focus, the MD said. DeVore had a similar take, writing that Techstars went from a focus of ‘passionate commitment to founders and the entrepreneurial journey, to a system focused on generating cash from paying corporate customers.’
The future
While corporate evolution is never a non-messy process, the Techstars revamp and new path will be easy to vet in time. Does the accelerator group back startups that grow quickly, and either go public or sell for large sums? And if so, more frequently, or less so than before?
And to be fair, its largest competitor, Y Combinator also retooled its operations in recent quarters, pulling back from late-stage investing, and reducing its cohort size while moving back towards an in-person model. Still, Techstars faces competition, not just from Y Combinator domestically, but from other accelerator programs in the US and elsewhere around the world.
Gavet, at least, seems confident that the best days for Techstars are in front of it.
‘Last year, we did about 700 pre-seed investments. This year, we should be making about 800 investments – growing both inside and outside of the U.S. The pipeline looks strong,’ she said.
Ref: techcrunch
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