Startup incubator TechStars has raised $8 million in new funding for its programs in Boston, Boulder, New York, and Seattle. The new funding comes from more than fifty venture funds and over 25 individual angel investors. This brings the incubator’s total funding to nearly $11.5 million.
TechStars, which launched in 2007, is a “startup boot camp” for tech entrepreneurs in which selected startup receive up to $18,000 in seed funding (or $6,000 per founder up to three founders in exchange for 5 percent of the company), three months of mentorship from successful entrepreneurs and investors, and the opportunity to pitch to angel investors and venture capitalists at the end of the program.
David Cohen, co-founder of TechStars, tells us that for the past few years, the incubator has been raising money incrementally for each program and location. But this raise enables TechStars to operate and fund startups for the next four years. He says that more than 70% of TechStars companies go on to raise venture or angel capital after the program ends and 7 of the first 20 companies incubated have now been acquired.
Cohen explains that the TechStars model takes a mentor and community-driven approach to incubating startups and supporting founders. The company pairs at least 10 mentors in the local technology industry with each startup to give founders access to both seasoned entrepreneurs and venture capitalists.
While Cohen says that there are no immediate plans to expand TechStars to other locations, he said the new funding will also be used to run existing programs more frequently. For example, TechStars’ New York program will have two sessions this year.
TechStars has also open sourced its model, recently announcing the TechStars Network as part of the White House’s Startup America initiative to spur entrepreneurship. The incubator’s model is now being used by 22 programs globally, says Cohen, including Chicago’s Excelerate Labs.