From my personal blog:
About a week and a half ago, Techstars launched. Basically, it’s a startup “bootcamp” – 10 teams will get a small amount of seed funding, work in Boulder, CO getting their new companies off the ground, and be mentored by a long list of smart folks. It’s the brainchild of David Cohen, and has some great people involved (including Brad Feld). When David offered me a chance to participate, I jumped at the chance.
Michael Arrington wrote about it yesterday on TechCrunch, and likes the idea. But what blew me away was some of the negative comments to his post. Most of the negatives seem to circle around the investment/equity part; basically, Techstars puts in $5,000 per founder (up to $15,000), and takes a 5% stake. Normally I’d write something clever now about the pre-money valuation of a napkin :-), but that really isn’t the point.
The point is, being mentored through the summer by this group of people is SO worth it. When I started NewsGator, I didn’t know anyone in the business, and really didn’t know a lot of successful entrepreneurs (other than consultants), let alone people in the legal or investment communities. When I saw my first venture term sheet, it was such a shock I’m sure I had some interesting expletives for my attorney (who, incidentally, had to be recommended to be by the same Brad Feld who was doing the investment, because again, I didn’t really know anyone in this community).
If I could go back to the beginning of NewsGator, would I have given up 5% equity for the kind of mentoring and contacts I would have made in a program like this? Yes – in a heartbeat. I can think of specific decisions I made on my own that I may have made differently if I had had a chance to talk to people like the folks on this list…and they could have made a positive impact on the company very early in its life.
Never underestimate the value of your network. And to those poo-pooing the whole concept, I’d remind you that there are a lot of people who don’t live in Silicon Valley, who have never met a VC in their life, but who have great ideas that could turn into the next big thing.