Friday, April 08 2011
On Thursday, nearly a dozen technology start-ups present their new or improved company at an event called TechStars Demo Day at Webster Hall in New York. Each start-up gets eight minutes on stage to convince investors sitting in the audience — the sponsors say they are expecting several hundred — to finance the company.
The presenting start-ups have each been involved in a 13-week program operated by TechStars, a technology incubator that pulls in successful executives to help mentor new companies.
Twice a year, TechStars, which originally began in Boulder, Colo., invites start-ups to apply for the company’s program. If accepted, the start-ups are offered $18,000 in financing and access to more than 100 mentors who have previous experience working with major technology companies. In exchange, TechStars receives a 6 percent stake in each company.
“We started this program in early January and received over 600 applications from start-ups that hope to build their company with our help,” said David Tisch, managing director of the New York chapter of TechStars. Mr. Tisch said it only accepted a dozen applicants.
At any hour the TechStars office, near Union Square in New York, is buzzing with small teams of programmers and entrepreneurs huddled around desks toiling on their latest project. The program is so intense that workers often stay around the clock, sleeping on office couches or under desks when they can.
One of the biggest lures of the program is the unlimited access the start-ups get to established tech community mentors. “It sometimes feels like I’m teaching at Hogwarts,” said Rachel Sklar, a mentor at Techstars who formerly worked as an editor at The Huffington Post and is currently involved with the social start-up Hashable. “It’s so difficult to get into the program, and the access and support the developers receive is like nothing else. It’s incredibly rewarding to be able to offer guidance to these new companies.”
The start-ups that enter the program vary widely. CrowdTwist, which is co-founded by Irving Fain, plans to offer loyalty programs and social rewards for businesses. Although the company had already been in the marketplace before it was accepted at TechStars, the mentors have helped it grow in new directions. “The access to people in the industry and the feedback we’ve received while refining our company here has been amazing,” Mr. Fain said while working late one recent night at TechStars offices.
Immersive is creating an advertising billboard system that has built-in cameras and can determine the age, sex and the interest of passersby. Immersive then uses the information to change the billboard’s advertising with what it hopes will be a relevant message. “If two men in their 30s are standing in front of a billboard then we’ll likely show a car advertisement. If it’s a women then maybe it’s a hair product,” explained Alessio Signorini, chief technology officer of Immersive. Mr. Signorini said the mentors he had worked with at TechStars had introduced him to companies that wanted to work with him to establish the new billboard system.
For all the start-ups, Demo Day is a chance to receive investor financing or perhaps be acquired by a larger company.
David Cohen, co-founder and chief executive of TechStars, said nearly all the start-ups that have incubated within the company have either been purchased or received large sums of money to invest in their businesses. “Seven of the first 20 start-ups that joined TechStars were acquired by companies like AOL, Word Press and Jive Software,” said Mr. Cohen. “A number of others have received seven-figure funding deals from major venture capitalists.”