March 30th, 2020
At this time when so many are feeling the effects of the COVID-19 pandemic and consequent economic downturn, we need each other more than ever. We must work together and lean on each other to get through this crisis, hopefully, stronger than ever. We’ve never needed to embrace our values more and to #GiveFirst more — to each other, to our families, to our communities.
Techstars is doing a number of things to support everyone in our global network - you can find resources and information regularly updated at techstars.com/covid. With so much uncertainty facing all of us, it’s important to consider all the ways in which we can help each other. Networking, resources, and moral support are critical elements, but so is financial support. For these reasons, we have decided to make the following commitments to our portfolio companies.
Maturity dates for outstanding convertible notes will be automatically extended so that none come due for the next 12 months. Currently, Techstars has approximately 1,000 convertible note investments outstanding. For the next year (through March 31, 2021), Techstars commits not to call or demand payment on any of those convertible notes. This is applicable only to notes owned by Techstars directly, not those held by our partners or third-party investors (usually a fund with “Techstars” or “Star Power” or “PBTS” in the name will indicate a Techstars investment; if you aren’t sure just check with us).
Re-offering $100K notes recently declined. Any startup in any of our accelerator programs that began between January 1, 2020 and April 1, 2020 that did not accept the optional $100,000 convertible note at the time the program started may now accept it on the terms originally offered until Friday, April 10th, 2020.
Funding $20,000 upfront if we delay a program. If we delay the start date for any of our accelerators in 2020 due to the crisis, Techstars commits to fund the $20,000 equity commitment for each company that has executed our “letter of intent”. Such funding will be made according to the program’s original timeline and subject to our customary due diligence and contracting process being completed. The additional $100,000 optional convertible note funding will be made once the program starts, consistent with our current practices.
Accelerator investment terms won't change. Techstars commits to not adversely alter our investment terms for any of our 50+ accelerators globally for the remainder of 2020. Our accelerator deal remains the same as it was before the crisis.
We won't rescind or change existing commitments. Per our code of conduct as it relates to financings in progress, Techstars will be clear about what commitments we are making. Once made, Techstars will continue to live up to those commitments.
While these commitments won’t solve all the challenges we face together and individually in this turbulent time, we hope that they can offer some comfort and relief. We will continue to do everything we can to support our network and the startup community. The world needs your innovations and solutions more than ever.
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