This summary is qualified in its entirety by reference to the definitive investment agreements and may be varied to accommodate local law and custom.

Techstars provides your company an initial investment of up to $120,000 paired with more than $4M in perks and an invaluable global network of alumni, mentors, and investors in exchange for ~6-9% equity.

If your application is accepted, you will join one of the most selective startup accelerators globally. Our three-month accelerators have put many founding teams on a fast track, saving months or even years of time and increasing the odds of success. 

Joining Techstars is like bringing on an operating partner who has walked in your shoes and will be by your side for the lifetime of your company.

The Techstars investment in each company breaks down in the following way:

• All Techstars accelerator companies receive free admission to Techstars one-of-a-kind accelerator program + $20k in cash + more than $4M in credits and perks (including over $400,000 in cloud credits) + access to the Techstars network of alumni, investors, and mentors for life.  In exchange, each company grants Techstars the right to receive 6% common equity at its next priced equity financing round.  By taking common equity, Techstars only makes money when founders and employees make money - we’re in this with you.

• Techstars accelerator companies also have the right to an optional $100k convertible note with a standard 20% discount rate and a cap between $3M and $5M. Companies may choose not to take the convertible note.

• Unlike many other investors, Techstars invests on pre-money investment agreements, which are more favorable to founders versus comparably priced post-money instruments.

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$20,000 Equity Investment In Common Shares

Techstars purchases the right to 6% of the Company’s capital stock on a Fully Diluted basis  at the Qualified Financing (as defined below) and provides $20,000, subject to the company’s satisfactory completion of due diligence and a fully executed investment agreement. We will be issued our 6% common equity immediately before the Company’s next equity financing resulting in proceeds to the Company of $250,000 or more (the “Qualified Financing”).

Preemptive Rights

Many investors ask for pro rata rights, and we are no different. We aren't just investing capital, but also investing the time and resources of our entire organization, and we believe those resources help set the stage for your future success. As a result, our pro rata rights become even more important to us as they allow us to continue to invest in subsequent investment rounds of your company. This right is assignable to allow our venture fund to participate in seed or later rounds. Our preemptive right terminates when we are granted the same or substantially similar preemptive rights issued in connection with a Qualified Financing, or upon the Company’s IPO or sale, if earlier.

Digital Rights

If the Company proposes to sell, issue, sponsor, create, distribute, mine, or reserve any Tokens for the Founders or the Company (together, the “Token Reserve”) on or after a Network Launch, it shall issue to the Purchaser a number of Tokens equal to 6% of the Token Reserve. 

Techstars and Advisor waiver and indemnification

We request an indemnity to protect mentors, program team members, and Techstars from claims resulting from their participation in the program (unless their actions constitute gross negligence or intentional misconduct). Ultimately, it is the Company’s decision to take, or not take, any advice offered during the program. Without this protection, we could not provide the high level of mentorship needed to support our programs.

Code of Conduct

We expect companies and their employees to adhere to our Code of Conduct.

Information Rights

Quarterly operating metrics, cash position, revenue, burn rate, runway, financial statements, and a current cap table. 

Countries Policy

Techstars can invest in companies incorporated in over 20 jurisdictions. We reevaluate this list annually, and our managing directors can discuss the current list of supported jurisdictions. 

Optional $100,000 Convertible Note Investment

Aggregate Proceeds

If the Company elects by the start of program to take our Convertible Note investment, we invest $100,000 USD in exchange for a Convertible Promissory Note (“Note”), payable in or around the first week of the accelerator program and subject to the Company’s satisfactory completion of our due diligence and a fully executed investment agreement.

Maturity

Our Note has a 2-year term and will convert at the Qualified Financing. If a Qualified Financing has not occurred prior to the Maturity Date, our practice is to extend the Note for another 1-year term.

Interest

Simple interest shall accrue on an annual basis at the rate of 5% per year. 

Valuation Cap

Our Note has a standard valuation cap of $3,000,000 USD. This cap is only increased if a company has closed greater than $250,000 USD in funding prior to receiving the Techstars offer through either (a) an equity round with a post-money valuation greater than $3,000,000 USD, or (b) convertible notes/SAFEs with an automatic conversion cap greater than $3,000,000 USD. If that's the case, the valuation cap on our Note can be increased to match the higher valuation/conversion cap, up to a maximum of $5,000,000 USD. 

For example:

• Company A raises $400k at $4MM, then the Convertible Note valuation cap may adjust to $4MM.

• Company B raises $200k at $3.5MM plus $50k at $4MM, then the Convertible Note valuation cap may adjust to $3.5MM.

• Company C raises $150k at $4MM, then the Convertible Note valuation cap will remain at $3MM.

Conversion at Qualified Financing

The Note will automatically convert upon a Qualified Financing into the same shares sold in the Qualified Financing at a price equal to the lesser of (i) a 20% discount to the price paid by the other investors in the Qualified Financing, or (ii) the price obtained by dividing the valuation cap of $3,000,000 USD by the number of outstanding shares of the Company immediately prior to the Qualified Financing calculated on a Fully Diluted basis. 

Maturity Date Conversion

If a Qualified Financing is not consummated prior to the Maturity Date, then we may elect to convert the unpaid principal and accrued interest on the Note into shares of the Company’s preferred stock (or common stock if preferred doesn’t exist) at a conversion price equal to the valuation cap of $3,000,000 USD divided by the outstanding shares of the Company on the election date calculated on a Fully Diluted basis.

Conversion at Network Launch

Upon the occurrence of a Network Launch, Techstars will have the right (but not the obligation) to convert all outstanding principal and unpaid accrued interest into Tokens issued by the Company in such Network Launch at a price per Token equal to a 20% discount on the lowest price paid by third-party purchasers.

Conversion at Change of Control

If the Company is acquired prior to the Qualified Financing, the Company will pay Techstars the greater of (i) a cash repayment equal to the unpaid principal and accrued interest, or (ii) the amount Techstars would have been entitled to receive in connection with the sale if the unpaid principal and accrued interest on the Note had been converted into shares of the Company’s common stock at a conversion price equal to the valuation cap of $3,000,000 USD divided by the outstanding shares of the Company as of immediately prior to closing the sale calculated on a Fully Diluted basis.

Preemptive Rights

Same as above.

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