The successful startup accelerator program stages an inaugural class graduation for their New York outpost.
A crowd of venture capitalists, investors and startup founders gathered in New York City for the better part of a day last week. The occasion – the graduation of the TechStar Network’s inaugural New York class, otherwise known as Demo Day. TechStars is the successful startup accelerator program founded by David Cohen in Boulder, Colarado in 2006. Since then, the Network has opened programs in Seattle, Boston and most recently New York City. Each program has a simple premise. Put a small class of entrepreneurs through their paces for three months, giving them access to a stable of highly successful entrepreneurs – often network members themselves – as mentors, and access to future investors. Startup selection is based as much on the quality of the founders as the underlying business model. The founders use the three month class to flesh out a new idea and build a prototype for early stage startups looking for seed funding, refine an existing model for more mature startups, and benefit from unprecedented access to a community of expert mentors. This mentorship-driven approach seems to have worked well – of the 39 startups that had undergone the program as of May 2010, 28 were active, 5 had been acquired for more than $2Million and 5 had failed. The failure rate of 13% seems to be about half that of Y Combinator. This means a glut of applicants for each class – 600 startups applied for the inaugural New York class, 11 were selected.
At New York’s inaugural class graduation, we watched as founders of highly successful startups came on stage to introduce their respective mentee and startup CEOs. Mentors included Foursquare’s Dennis Crowley, Tumblr’s David Karp, Yipit’s Vinicius Vacanti and other influential staples of the startup community. Watching them was an audience of more than 700 people that read like a Who’s Who of the VC and angel community, including Union Square Ventures, First Round Capital, IA Venture Partners and New Markets Venture Partners. Overlaying the excitement was an oft-repeated repudiation of the tech bubble or “froth” in the market by many VCs. Not surprisingly, little was said about the male/female ratio in high-risk entrepreneurship – only 2 of the 11 startup CEOs were women.
Stay tuned for our in-depth coverage of 4 especially promising startups in upcoming posts.