Startups run the bases with TechStars coaching
The competitive 12-week program selects promising entrepreneurial teams and connects them with mentors — often venture capitalists and angel investors — who help them shape their startups.
Seattle Times business reporter
What: TechStars Seattle Demo Day 2011
What's expected: Teams have been working to create startup companies and will pitch their products to an audience of investors and others in the entrepreneurial community.
Steve Krenzel and Brandon Bloom faced tough critics the first time they pitched their communication-software business, now called Thinkfuse. The judges said they loved the team but hated the market. They told the pair to come in two weeks with a better proposal.
That's TechStars. "You can think of it as an entrepreneurial boot camp," said Andy Sack, executive director of the Seattle branch of the organization. The competitive 12-week program selects promising entrepreneurial teams and connects them with mentors — often venture capitalists and angel investors — who help them shape their startups.
Teams also receive resources including $6,000 of initial funding per founder. In exchange, TechStars receives 6 percent of their companies.
TechStars started in 2007 in Boulder, Colo., and has spread to Boston, New York and in 2010 to Seattle, supporting 80 startups since its founding.
Weekly rehearsing pitches, constant renaming and refocusing of the businesses, and hearing sometimes brutally honest feedback lead to Demo Day, when teams pitch their products to potential investors.
The 2011 Seattle Demo Day is Thursday. Sack said that so far this year's class has raised more than $2.5 million in funding even before the event.
Companies say the name TechStars gives them legitimacy needed to open doors.
"If we needed a meeting with somebody, there was someone in the TechStars network who could make it happen," Krenzel said.
He said the program has been fundamental to Thinkfuse's launch, especially the initial feedback, which prompted Krenzel and Bloom to shift from the education to enterprise market.
Their subsequent pitch was a version of their software that aided communication between team members within a business instead of catering to classrooms with dwindling budgets.
With this new approach, they were one of nine teams accepted into the 2010 Seattle TechStars class.
Fast forward a year, and Thinkfuse is in the late stages of beta testing its software, has raised $500,000 through angel investors and has hired several employees from businesses such as Microsoft and Amazon.com.
Krenzel and Bloom are now TechStars mentors themselves, helping the 2011 class prepare for Demo Day.
This year, the Seattle program accepted 10 teams from about 700 applications, compared with about 400 applications in 2010, Sack said.
He said he hopes to host more events for teams post-Demo Day after receiving feedback himself. Last year's class said it wanted continued support and training.
However, many companies from that group have found their own ways to maintain connections that began during TechStars.
Companies are offered open space in TechStars' South Lake Union office suite during and after the program, while the startups get on their feet. They may rent the space formally after that.
Krenzel and Bloom said Thinkfuse stayed for the collaborative environment, where teams constantly give each other feedback.
"There's literally no barriers," he said. He added that the office has occasional Nerf wars.
There are other Seattle-area programs that provide resources and connections, including the Northwest Entrepreneur Network, which focuses on networking and accepts applications for its own startup showcase. But T.A. McCann, a TechStars mentor who has worked with other programs that support Seattle entrepreneurs, said TechStars is different in the time it demands from teams.
"You have to quit your day job to do it," McCann said. "You can't do it part-time."
The program is rigorous, but one tradition in Seattle helps teams regroup. In addition to Friday pitch practices, the teams meet Wednesdays for drinks and an informal check-in, detailing their setbacks and successes of the week.
"It's really like group therapy," said Phillip Lee, co-founder of RentMatch, an apartment-search website that grew from the 2010 class.
Otherwise, meetings with mentors, searching for resources and practicing their pitches hundreds of times have consumed the lives of the 2011 teams for the past 12 weeks.
"There have been all-nighters, pulled hair; people will sleep under their desks," laughed Russell Benaroya, co-founder and CEO of the company EveryMove, part of the 2011 class. At Thursday's Demo Day, his team will pitch an online rewards program for healthful living choices.
Krenzel and Bloom said they'll be there.
"Once you're in TechStars, you're always in TechStars," Krenzel said.
Alexis Krell: 206-464-3263 or email@example.com
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