Techstars is a business accelerator that provides “$118,000 in seed funding, intensive mentorship, and an amazing network of mentors and alumni” – for an equity stake of 6%, according to their website. You could think of it like a three-month version of a 3 Day Startup, but much more intensive.
During the first month of the program, businesses meet with investors and mentors, the second month works on the business itself and retooling as need be, and the third month focuses on financing and honing the pitches for Demo Day – Thursday's event.
Techstars was founded in Boulder, Colorado in 2007, and since then has funded approximately 500 companies. Currently, there are about 18 Techstars programs going on worldwide, with a roughly nine to 12 month cycle between programs in each location.
This is the third program Techstars has held in San Antonio. While many accelerator programs focus horizontally – meaning, they accept applicant companies from a variety of industries – all three of the San Antonio programs have been vertical accelerators, all focused on cloud-oriented companies. The previous two classes have raised a combined $92 million in capital since participating in Techstars Cloud.
A “cloud vertical” accelerator focus makes good sense in San Antonio, given the proximity of Rackspace, whose core business is managed cloud computing. In fact, Techstars draws heavily from local talent at Rackspace, Geekdom, the 80/20 Foundation and others for its program mentors. Approximately 60% of the mentors for the San Antonio program, whose contributions are crucial to the success of the model, come from local companies; another 40% come from all over the country and the world, and can participate virtually, according to Techstars Cloud Managing Director, Blake Yeager.
“We have a lot of mentors in San Antonio because of their relationship with Rackspace who are super-excited to help companies that are working on cloud technologies,” said local Program Manager Kara Gomez. “You can really leverage the mentor base that’s here – they’re excited and they want to help.”
The 10 startup companies hoping to connect with angel investors and venture capital at Thursday’s launch have all moved to San Antonio for the three-month program, a fact which gives both San Antonio and Techstars a unique chance to burnish their brands. This program's 10 startups are Appbase, Bitfusion, Card Isle, Callinize, Elasticode, Fantasmo Studios, Knowtify, Nebulab, Stabilitas, and VirtKick. Nebulab is from San Antonio and offices out of Geekdom.
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“Techstars gives us an opportunity to attract companies and bring investors and other mentors here to San Antonio, and show off what is happening in the local tech ecosystem that they might not otherwise know or hear about,” Yeager said.
“Obviously when you have companies moving to San Antonio (for three months), that’s a great boost to the local tech community,” he continued. “But on a broader level, running a program that’s affiliated with a big national brand like Techstars really adds credibility to the efforts that were already going on here in San Antonio.”
Geekdom has pitched in with free, three-month memberships to the co-working space, and the 80/20 Foundation put together some resources for company founders who were moving here for the Cloud program, including great maps and guides about things to “Go and Do,” produced by Kara Gomez.
“It’s great to be able to take control of your own downtown and your own city’s branding,” Gomez said. “We want to give them the maps and help them find places to live, so that we can give them the picture of what we think San Antonio is like, and we can help usher them in to that perspective.”
Gomez helped all 10 companies' founders find housing nearby so they could “experience the downtown renaissance and the tech scene,” in a way they’d be unable to do if they were located too far away. She used Airbnb to find as many houses as she could in Five Points, Southtown and Dignowity Hill, but then was pleased when the Vistana offered some of the teams three-month leases for several apartments.
The format of Thursday’s event will be the same as all Techstars’ Demo Days worldwide.
“The purpose of the event is for the teams to showcase all the hard work they’ve done over the past three months, building these businesses and getting them ready to show to investors,” Yeager said.
Thursday will begin with “a little bit of networking ahead of time,” Yeager said, followed by each of the companies getting up on stage and giving about a five-minute pitch to the audience “highlighting the problem that they’re solving, the solution that they’ve built, the traction that they’ve been able to achieve, a little bit of background about their team, and why they’re the right ones to solve their problem – then making sure that people understand the bigger vision of what they’re trying to do.”
After the pitches are over, there’s a reception, which is really “an opportunity for the investors in the audience to follow up with the teams they’re potentially interested in, exchange business cards, and maybe set up a time to talk in a little more detail about whether there’s an opportunity for investment,” Yeager said.
In years past Mayor Julián Castro made it to each of the Demo Days, he said, but it’s unclear whether any mayoral candidates are planning to come. Several members from the Economic Development Council have expressed interest in attending.
“We’ve gotten a lot of support from everyone who’s involved in the broader tech ecosystem here,” Yeager said.
“I’d love to see San Antonio rebuild its image – not as a tourist city, but as an attractive hub for technology and technology companies ... but that’s got to come from the mayor down. We had a really good advocate in Mayor Castro.”
Gomez is excited about the “renovation and renaissance” theme that seems to run through the Demo Day preparation. “We’re having it at the Aztec Theatre, which is being renovated. Geekdom is at the Rand Building, which is being renovated. And we’re going to be at the St. Anthony (Hotel) for the after-party, which isn’t even open yet because it’s being renovated.
“I feel like we’re capitalizing on all these great new things that are happening in downtown San Antonio, and we’re sort of riding on that momentum that’s happening. All of the great things we’re doing – none of them are really finished yet.”
But as of Thursday, when the figurative curtain rises on Demo Day, 10 companies will show what three months of intensive focus and mentoring can produce.
“It’s been a lot of work, but it’s also been a lot of fun,” Yeager said.
*Featured/top image: Greg Adams of Stabilitas, presents his elevator pitch to the Techstars group on day one of the program. Photo by Kara Gomez.