TechStars: Summer Camp (and cash) For Entrepreneurs

TechStars is a new startup fund/incubator that’s generated a good discussion in the TechCrunch Forums. Like YCombinator, TechStars is looking for flat broke entrepreneurs with just a seed of a good startup idea.

They are taking applications now, out of which ten winners will be selected. The thirty of so winning entrepreneurs (TechStars anticipates an average of three founders per idea) will travel to Colorado on May 21, 2007, and spend the summer in Boulder building out their ideas. TechStars will also give each founding group $15,000 in seed funding, and help them locating housing at the nearly University of Colorado, Boulder. TechStars will take 5% of the equity in each startup.

This is comparable to YCombinator’s model, where they give $6,000 per founder and take 6-8% of the startups equity. And the model has worked so far, with a number of promising startups launching, and YCombinator-funded Reddit being acquired by Condé Nast last Halloween.

TechStars is solidly backed, with investments from David Cohen, Brad Feld, Jared Polis (founder of Blue Mountain and ProFlowers) and David Brown. There’s a long list of mentors as well who’ve promised to help guide startups over the summer.

We are seeing a dramatic shift as (some) investors are lurching away from providing big capital to over funded web startups to these structured, mentor-driven angel investments. YCombinator and TechStars fill a definite niche, as does Charles River Ventures recent foray into small (and quick) investments as well.

I’m definitely going to take at least one trip to TechStars this summer and do some interviews and meet this new crop of startups. TechStars will repeat the program each summer.