The reason the Start Fund works is that the terms are so good--uncapped and no discount--that if you're planning to raise money at all, you should take it, and so the investors get a real index, including the potential home runs.<p>These terms are significantly below the mean for the last YC batch, and I'd bet that some of the best startups don't take the deal. It's a decidedly less clear strategy to invest in only the not-so-good startups in a batch.
<i>"Y Combinator started the year before us, and it’s the same genre, but under the microscope, we could not be more different," said Mr. Cohen. "The fundamental difference between us and the other accelerator programs is they have a black box, while we have open sourced our model."</i><p>TechStars and YC are certainly different but having read:<p>What Happens At Y Combinator: <a href="http://ycombinator.com/atyc.html" rel="nofollow">http://ycombinator.com/atyc.html</a><p>and the TechStars equivalent:<p>Do More Faster:
<a href="http://www.domorefasterbook.com/" rel="nofollow">http://www.domorefasterbook.com/</a><p>YC doesn't seem like any more of a black box than they are.
This is excellent news, and a good alternative to YC.<p>Because of the Yuri/Conway offer, YC had been a substantially more financially viable program for a lot of startups that need capital to get moving- This helps level the playing field.<p>While I love YC, competition in this space is good for everyone.
It feels like the amount given to incubated startups is creeping up, both in YC and now in TechStars, as the programs have gotten more popular.<p>Do people no longer feel that "the amount a graduate student makes for three months" is enough to actually start a company? Or is this more reflective of the market value rising for the amount of equity typically taken by a top incubator? If it's the latter, wouldn't there be a new opportunity for an incubator to give grad student wages to willing companies for a much smaller equity stake?
The names on the funding aren't quite in the Ron Conway, Yuri Milner realm - access to that network is one of the most important pieces of Startfund for follow-on, BD, etc.<p>That said, it's still awesome to see expansion in funds available for early-stage companies.
It's great to see a lot of incubators really coming to life recently. What's even better is that entrepreneurs have <i>options</i>. If you agree with one ethos, you can apply there and if not, look for someone else. My only hope, though, is that this becomes a staple in business and not just a fad. I also hope that the quality of these incubators remains extremely high and that they continue to select companies with a fine tooth comb. Congrats to TechStars for moving forward.
Its great for startup companies, now they just have to worry about executing in the first year. I do think they will miss a lot of the struggle and hardwork in fundraising, but as pg says thats just a time sink. One jab: Whats better than 100K...150K
Regarding transparency: TechStars New York is currently on Bloomberg as a series, albeit quite some time after the fact (e.g., Toviefor folded just weeks after TechStars ended & is one of the featured startups).<p>HN link (submitted by me): <a href="http://news.ycombinator.com/item?id=3021939" rel="nofollow">http://news.ycombinator.com/item?id=3021939</a>
video: <a href="http://www.bloomberg.com/tv/shows/techstars/" rel="nofollow">http://www.bloomberg.com/tv/shows/techstars/</a>
The discovery of these incubator models is one of the most interesting things happening in the startup community - in addition to giving aspiring entrepreneurs an opportunity to build great things, they are creating an even more tightly knit startup community. They are making it easier for new people to get involved in this network/community, who in turn give back because they have such a great experience.