I often get asked by Techstars applicants “is the 6% worth it?”. Whenever I get asked this question, the honest thought that goes through my head as a Techstars alumni is “are you kidding me? Of course”. That being said, I can relate to placing a high value on my company’s equity so I try to be patient and explain the merits of the program and logic of my statement. Given that Techstars recently launched their “equity bank guarantee”, I’m glad that entrepreneurs can now try the program “risk free” and see for themselves.
Let me first give you a bit of background. I am the co-founder and CEO of Remitly, which I started in 2011 after running mobile and Internet banking for Barclays Bank Kenya. It was a pain to get money across borders and everyone was using mobile phones for financial services. Remitly is disrupting international remittances by leveraging mobile phones. We’ve raised over $10m in capital from great investors like QED, Bezos Expeditions, Trilogy, TomorrowVentures, Founders CoOp and other great folks. We’re now helping tens of thousands of customers transfer millions of dollars a week. And we’re just getting started.
None of this would have been possible without Techstars.
After moving back from Kenya to Boise, Idaho to be the Entrepreneur-in-Residence at Highway 12 Ventures. Mark Solon (now one of the Managing Partners of Techstars) encouraged me to consider Techstars when I was starting Remitly. Taking Mark’s advice, Remitly applied and was lucky enough to participate in the Techstars Seattle 2011 program.
Everyone gets something slightly different out of Techstars. For me, it was the product network. Having come from the banking industry, I had no product experience or network. Even before being accepted to Techstars, the Techstars network connected me to my co-founding engineer (Shivaas Gulati) so we could apply to Techstars and we then met our co-founder and Chief Product Officer (Josh Hug) in the Techstars program. Josh was our lead mentor and, after being co-founder and CEO of Shelfari (acquired by Amazon in 2008), he was looking to start his next company. Any smart founder knows that your team, especially your co-founders, make or break a business. The fact that I met both of my cofounders via Techstars was invaluable.
Here are a few other reasons why I think 6% is a great deal:
Honest feedback: It’s hard to get honest feedback on your business, especially from super experienced entrepreneurs. The mentors and Andy Sack (Managing Director of the Seattle program) are so good and cutting through the crap and giving entrepreneurs honest feedback. It’s not always easy to hear it but it’s like three months of free consulting advice when you need it most.
Focus/momentum: If you really want to grow a business, you need to focus on it 100%. Techstars is a good launch pad to make this leap, if you haven’t already.
Credibility: Hundreds and hundreds of applicants, 10 companies. That’s a valuable stamp of approval and startups need that stamp to break through the clutter when raising capital, recruiting, etc.
Network: I love the quote “if you’re the smartest guy in the room, you’re in the wrong room”. You won’t be the smartest guy in the room during Techstars. Also, if you need an intro, it feels like you’re always one degree away from anyone in the world when you’re part of the Techstars network.
Fun: Long hours and hard work also create a special bond with the other teams. There were so many wonderful memories during the program and I made some great friends that I stay in close touch with today.
Knowing the integrity and character of the Techstars leadership team, it was no surprise that they recently announced their “Equity Back Guarantee”. Like many great brands (Costco, Nordstrom, etc), Techstars can offer this because they know how much value they’re providing founders who participate in their programs.
While founders are smart to value their equity, they’d be crazy not to consider being part of Techstars. The 6% we gave them was a no-brainer. I’d do it again in a heartbeat.