Obama-Endorsed VC Program Promises 6,000 New Startups, 25,000 Jobs
It's the American Dream. Come up with a great idea, get investors, and you're on you way to wealth and unauthorized biographies about your life. The White House is throwing its weight behind a new way to better support hopeful tech entrepreneurs based on the mentorship model. About two weeks ago, TechStars Network launched as part of the White House Startup America initiative.
Yesterday, TechStars Network gained another helping hand. This from the Ewing Marion Kauffman Foundation, one of the world's largest foundations for entrepreneurship, with $2 billion in assets. It granted TechStars Network $200,000 to build software that would let a startup hopeful fill out a single form to apply to all the seed accelerators in the TechStars Network. The software would also allow Kauffman and other researchers to track and analyze aggregate data relating to the demand for seed money, the funding granted and the longer-term business results of the companies funded.
The network is the offspring of the similarly named Boulder VC "accelerator" firm TechStars. The network hopes to become an umbrella organization for other such accelerators of the DreamIt, Y Combinator variety (though those two seed VCs have not yet joined this network). An accelerator is a firm that provides immediate seed cash and access to those who have more. TechStars, for instance, grants those it accepts $18,000, and the connections to pitch to hundreds of angel investors and VCs. It also supplies its startups with mentors from the ranks of the experienced.
Got that so far? TechStars is the actual seed VC, TechStars Network is an organization for other accelerator firms so they can share resources and is part of the Obama administration's broader program. The resources TechStarts Network will share include the usual assortment of best practices and networking events where hopefuls and investors can mingle. But TechStars wants to go further and share actual business documents in a page ripped from open source, from budgets to legal documents. Accelerators can only be admitted to the TechStars Network if they agree to use the short-term mentorship model and they do not charge entrepreneurs - the accelerator must either invest directly or grant funding.
Young as it is, thanks to the nod from the White House, the TechStars Network already has an impressive roster of participants and sponsors. Sponsors include American Express, Microsoft BizSpark (Microsoft's startup program), RackSpace. Participants include Arizona State University and Springboard (Cambridge University's accelerator), among others.
The organization's mission statement is a bold one:
"Over the next three years, the TechStars Network will ensure that 5,000 successful and experienced entrepreneurs and investors will mentor and support 6,000 promising young entrepreneurs, increasing their success rate tenfold and creating 25,000 new jobs by 2015 and a sustained engine for growing these figures over time," pledges David Cohen on the TechStars Network site.
Here's a YouTube on Startup America from Austin Goolsbee. Note that Startup America comes equipped with a $2 billion budget in order to match funds granted to startups by VCs.