In The Belly Of The TechStars Beast. Have Seed Valuations Gone Insane? (TCTV)

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Earlier today, I dropped by the TechStars NY office to check out some of the startups in its inaugural class in New York City before they do their big Demo Day next week. The place was buzzing, and the startups I saw were all way more polished than I expected. I wasn’t the only one there to get an early peek. Rich Miner of Google Ventures and Mark Suster of GRP (and also a regular TechCrunch contributor) were there mentoring some of the startups, but also—let’s be honest—getting an early look before the throngs of other investors descend upon Demo Day next week.

The activity and interest you see on the West Coast with Y Combinator startups, which now have an open offer to get funded sight unseen by Yuri Milner’s and Ron Conway’s Start Fund, is starting to show up on the the East Coast. It’s not quite as crazy yet, but it’s getting there.

While I was at TechStars, I shot the video above of founders Brad Feld, David Cohen and New York managing director David Tisch. (Some of the audio is a little soft, so turn up the volume).

Feld doesn’t think that valuations are out of whack, or that the supposed $4 million line is even a rational way to look at it. But there definitely is a rise in interest from follow-on investors. One startup, OnSwipe, already raised $1 million. (They are building awesome tablet-ready publishing tools for mobile Websites).

Cohen gives props to Paul Graham and what he started with Y Combinator, but explains how TechStars is taking a slightly different approach. TechStars is all about inundating each startup with tons of advice and mentors—up to ten world-class mentors for each startup, packed into a three-month period. From what I saw, this approach seems to be working.

TechStars recently raised another $8 million to expand its seed accelerator programs from Boulder to New York, Seattle, and Boston, and is working create affiliated accelerators throughout the country through its TechStars Network. (Stay tuned next week, for more details on the graduating startups from the NYC program).