TechStars gets Lijit

I few days back I posted about Techstars and what a good idea it is. I think there should be more ways for people to get started as Entrepreneurs. I was fortunate that my path crossed with some top notch partners several years back. Unfortunately not everyone makes that connection through serendipity alone. Techstars gives driven people a way to make it happen in a way I have not seen in Colorado before. I have had the good fortune of meeting most of the people in Techstars and have personally benefited from getting their advice over the last 10 years. After my experience of starting a company on the Front Range nothing could stop me from doing it again.

Last summer my new partner Stan James and I started Lijit. Lijit is a huge idea of re-building Internet Search from the ground up, starting with the data individuals forage on the Internet and the relationships that help shape that data into information. We released our first service about a month ago and it was a natural to try out on Techstars!

Using the Lijit Search Wijit on the TechStars website, you can search the knowledge base of all the Techstars Mentors at once. Not just their blogs, but their del.icio.us bookmarks, flickr photos, and even others that influence their opinions.

Give it a try, search on “Venture Funding“, something near and dear to an Entrepreneurs heart! See what the Techstars Mentors have said and bookmarked.

I think Techstars is awesome, and what could be better than searching for entrepreneurial subjects through entrepreneurial eyes!

As of 2006, according to The Center for Women’s Business Research, there were about 7.7 million majority-women-owned (51 percent or more) businesses in this country, accounting for nearly one-third of all U.S. businesses. In the last decade, in fact, women-owned firms have grown at more than twice the rate of U.S. businesses overall.

This should come as no surprise: as is commensurate for a lot of people who start businesses, women have good ideas, they’re motivated, and they know the market. In many cases, they ARE the market: research tells us that women make more than 80 percent of all purchasing decisions.

In the world of hi-tech startups, however, women are a rare species. Most women-owned businesses are in the services or retail sector. When women do start IT-related businesses, they receive less than five percent of IT venture capital funds.

TechStars, a newly launched company based here in Boulder, may be onto something. TechStars provides 10 lucky entrepreneurs with $15,000 of seed funding, mentoring and advice from experts in the field, connections to angel investors and venture capitalists, and a summer-long “boot camp” experience. TechStars is leveraging the best and brightest of Colorado’s entrepreneurial and hi-tech minds with the opportunity to attract and grow more of them. And by giving budding entrepreneurs tools such as access to venture capital, risk awareness, leadership and technical training, market penetration, and networking opportunities with the right people, TechStars is more than just an incubator. It’s a hi-tech hothouse.

We hope that women will see and take advantage of opportunities like these; and we hope to find out more about why there aren’t more women entrepreneurs running hi-tech startups. In the weeks to come we’ll be posting several literature reviews, papers, and accompanying blogs about women’s participation in IT entrepreneurship. We’ve undertaken this critical study with the help of the Ewing Marion Kauffman Foundation, which also is a supporter of EntrepreneurshipWeek USA, taking place February 24 � March 3, 2007.

What makes for a successful hi-tech startup? Is it access, or attitude? Money, or moxie? We hope to find out. In the meantime, the future of small business and technology innovation depends on the fertility and viability of good ideas. Kudos to TechStars for making the lush ecosystem of Boulder a fruitful climate for success.

Lucy Sanders is CEO and Co-founder of National Center for Women and Information Technology (NCWIT), and is also a TechStars mentor.

From my personal blog:

About a week and a half ago, TechStars launched. Basically, it’s a startup “bootcamp” - 10 teams will get a small amount of seed funding, work in Boulder, CO getting their new companies off the ground, and be mentored by a long list of smart folks. It’s the brainchild of David Cohen, and has some great people involved (including Brad Feld). When David offered me a chance to participate, I jumped at the chance.

Michael Arrington wrote about it yesterday on TechCrunch, and likes the idea. But what blew me away was some of the negative comments to his post. Most of the negatives seem to circle around the investment/equity part; basically, TechStars puts in $5,000 per founder (up to $15,000), and takes a 5% stake. Normally I’d write something clever now about the pre-money valuation of a napkin :-), but that really isn’t the point.

The point is, being mentored through the summer by this group of people is SO worth it. When I started NewsGator, I didn’t know anyone in the business, and really didn’t know a lot of successful entrepreneurs (other than consultants), let alone people in the legal or investment communities. When I saw my first venture term sheet, it was such a shock I’m sure I had some interesting expletives for my attorney (who, incidentally, had to be recommended to be by the same Brad Feld who was doing the investment, because again, I didn’t really know anyone in this community).

If I could go back to the beginning of NewsGator, would I have given up 5% equity for the kind of mentoring and contacts I would have made in a program like this? Yes - in a heartbeat. I can think of specific decisions I made on my own that I may have made differently if I had had a chance to talk to people like the folks on this list…and they could have made a positive impact on the company very early in its life.

Never underestimate the value of your network. And to those poo-pooing the whole concept, I’d remind you that there are a lot of people who don’t live in Silicon Valley, who have never met a VC in their life, but who have great ideas that could turn into the next big thing.

Since our coverage on TechCrunch last night, the most frequent question we’re getting is about applying from outside the U.S.

It does not matter where you live. Please apply.

Of course, you’ll have to be in Boulder this summer so please don’t apply unless this is possible. And you’ll have to get here and be here legally, which we can’t assist you with.

If you use Facebook, please join the TechStars group (search “TechStars” under groups) to exchange ideas and questions with other possible participants.

Who knows, maybe you’ll even meet your co-founder on Facebook!

I’ve gotten the question a few times now. It goes something like this: “If I apply to TechStars, is my idea/IP protected?”

Hopefully you’ll recognize that we’re investors, and we literally see thousands of ideas per year. We’re not in the business of stealing ideas and executing them ourselves or giving them to others for our benefit. Please check out our reputations - hopefully you will be comfortable.

That being said, please don’t include any trade secrets in your application. We don’t want to see them. However, without your idea (which of itself is not “intellectual property”), we cannot evaluate your application. Please feel free to be a little vague on your “how” and your secret sauce, but we’ll definitely need your “what” and your “why”. I can tell you that only the four founders (see the about page) will see your application, if that helps.

The bottom line here is that your idea is not really as valuable as you think it is. Executing your idea however, can be priceless. That’s why TechStars is here - to help you execute.

I once overheard someone put this another way: “A company with brilliant execution can [perhaps] steal ideas, but a company with brilliant ideas can’t steal execution.”

I know quite a few startup founders. I’d estimate that 95% of the hugely successful tech companies that I know of were founded by at least two people.

This debate will of course rage on forever, because plenty of great companies have obviously been founded by just one person.

So, TechStars will not “rule out” single founder companies from consideration. However, I do believe that there is a general bias among investors that startups are too hard for just one person, and that one person isn’t likely to be excellent at technology, sales, marketing, and running a business.

If your goal is to eventually raise money, my opinion is that you’re much better off finding a co-founder right away. Look for someone who compliments your skills. If you’re great at coding, find someone who’s great at selling or marketing (depending on the needs of your company).

So single founders - don’t be shy! Apply! Just know you’re probably at somewhat of a disadvantage. You can see our attitude towards this in that we’re providing seed funding based on the number of founders. There is probably some merit in the old saying “two (or three) heads are better than one…”

Talk about fun. Imagine being able to walk around the room at the TechStars launch party and ask “So, what do you do?” Many of the TechStars mentors stopped by to celebreate the kickoff of TechStars, and they’ve done some pretty amazing things. It was fun to listen in. “I helped write WordPress.” “I’m a founder at PhotoBucket.”, “We just sold our company to Google.” “I’ve made about 50 angel investments so far.” It was almost surreal how much talent and experience was at the launch party. I was honestly blown away. Here are a few snaps from the launch party on Thursday night in Boulder.

Alex King, Kevin Cawley, and Darren Crystal.

David Brown, Darren Crystal.

Alex King, Dan King, Scott King (wow, 3 kings in one shot) Andrew Currie, and me.

And of course, a couple of the entrepreneurs in attendance made off with the leftover cheesecake! Nice work Kevin and Danny.

Thanks to everyone who attended the launch party and helped us kick things off in style.

In the last few days, I’ve been asked several times what sort of “profile” we’re looking for in a founder.

There’s no simple answer to what makes a great founder. I can tell you that we absolutely want to see a strong passion and a strong commitment to your idea. We’re not necessarily looking for “young” people - we welcome applications from anyone, anywhere. One attribute of a potentially great founder is that they do stuff, and lots of it. They try things, take a few risks, operate like jacks-of-all-trades and always seem to be up to something interesting. You can see that in their personal life, on their blogs, and in the pet projects they create.

I suspect that this type of program will appeal primarily to young people. We’re certainly marketing it through many of those channels. However, I’m an investor in a startup that has a first time founder who is 49, with no prior startup experience. He’s a great founder and it’s a great company.

The bottom line is there’s no profile. We’re looking for great people who demonstrate the qualities that tend to make great founders. Believe it or not, the ideas are important, but secondary.

Great people, passion, and dedication. Period.

It’s an exciting time for TechStars. The Boulder Daily Camera covered TechStars today, and Brad Feld quickly followed up on his popular blog. The news about this great opportunity is starting to spread.

We’re holding our launch party on Thursday night (Jan 18) here in Boulder. Many of the mentors involved in the program will be in attendance, along with a few members of the press. If you’d like to attend, please drop me a note.