Interview: Techstars Bangalore boss speaks on handpicking 10 start-ups for $120,000 investment each

Raymond Newal.

July 20, 2020. Start-ups mark this date on the calendar. That Monday, doors will open for applications to Techstars Bangalore’s prized fund investment for 10 handpicked start-ups. Each winning start-up will have $120,000 in its coffers and a 3-month structured mentorship-based programme. There is no application fee, but the queue is long and crowded. Last year, more than 750 start-ups from 33 countries applied for Techstars Bangalore’s 10 coveted front row seats.

Founded in 2006 in Boulder (Colorado, USA), the parent Techstars has so far invested in 2,200 companies including 50 Indian companies. Techstars Bangalore stepped into India in 2018 and has to date invested in 18 Indian companies.

Here, Raymond Newal, Managing Director, Techstars Bangalore, talks of the company’s objectives and accelerated mentorship programme, the big dos and don’ts of an investment pitch, and his personal to-dos for a better start-up scenario. Edited excerpts.

What is the basic objective of TS and how is it different from other angel investing funds?

Techstars is a mentor-based accelerator which invests $120,000 each in pre-seed and seed-stage startups. In addition to the investment, the handpicked companies attend a three-month structured mentorship-based programme that is designed to help them in many ways, including but not limited to finding product-market fit, scaling growth, entering partnerships, and articulating their value proposition.

Techstars-backed founders join a network of more than 5,000 alumni across the globe, providing them with access to one of the most highly engaged professional networks in the world.

What’s the selection process for the $120,000 investment - from application to the final yes?

The first step is the application process that remains open for almost 3 months. As we are always going through applications, we often call and set up office hours with start-ups that seem interesting. Through a series of interviews, research and a process of getting to know the founders in a short period of time, we narrow our applicants down to the top 100, then 40, and finally, 20, Once we’ve narrowed down to 20 companies, we invite the teams to pitch in person or via video conference to a small panel of investors, entrepreneurs, and subject-matter experts.

As the managing director, I chair the panel and invite open deliberation amongst members to understand the strengths, weaknesses and opportunities of each business. Based on the information gathered through this process, I then make a decision on the 10 teams we will invest in.

What are the big dos and don’ts of entrepreneurial pitches?

Dos: 1. Understand your market, be able to articulate a compelling vision, and describe why you are the right person to make it happen. 2. A demo if you can - a demo is worth a thousand pictures. 3. Invite key members of your team who can add to the perspective of why you are the right team. 4. Have a stable and fast data connection and be free from noise before you start a video call.

Don'ts: 1. Have typos on your presentation. Typos are a reflection of how much (or how little) you care. 2. Force your audience to view an explainer video. 3. Invite every employee in the company to your pitch, especially if they have nothing to add.

What’s TS’ mentorship programme?

Our programme relies upon the tireless contributions of our mentors. In our latest class, we had more than 80 people volunteer, including entrepreneurs, corporate executives, investors, and subject-matter experts. The mentors get to meet each of the start-ups during 800 sessions we hold over 8-10 days at the start of the programme. Called Mentor Madness, it’s like speed dating, except the start-ups get to research the mentors, and the mentors research the start-ups before they meet. Each meeting is 20 minutes and allows both sides to determine if they’d like to work with each other.

One of the goals for each of the 10 startups is to find 2 or 3 of the mentors who would be willing to serve as a lead mentor who typically works closely with start-ups over weekly meetings to help them with whatever they are focused on.

Name five Indian start-ups that stand out in TS’ investment list. 

Lightwing (www.lightwing.io): A managed service that optimises cloud resources to reduce cloud costs for large enterprises.

Rose Bazaar (www.rosebazaar.in): Bringing efficiency to the unorganised ceremonial flower supply chain through innovations in packaging and distribution.

Picxy (www.picxy.com): Solving the relatability problem in Indian digital content through highly contextual stock photos.

Lancify (www.lancify.net): Connects students with employers for freelance projects.

ChintaMoney (https://chinta.money/): A financial wellness app that helps consumers make smart daily purchase decisions.

If you were to set India’s start-up policy agenda, what would be your top to-dos?

1. Reduce or eliminate requirements for compliance and reporting for start-ups with less than 30 employees. It’s hard for startups to focus on survival at such an early stage. The government must understand that bogging them down with compliance will either mean the founders are spending precious time navigating compliance requirements (and not growing their business), or growing their business in violation.
2. Encourage cross-border business and transactions (including investment, M&A, company flipping, etc) for tech start-ups. The more open and flexible our policies are, the greater the liquidity start-ups will generate as an asset class. This becomes a self-perpetuating cycle which leads to more start-ups getting built, more capital being invested, and more returns being realised.
3. Quicker adaptation to changing realities of business in the digital world. For example, post-COVID, several startups will operate without physical offices in the world. Therefore, why require a registered physical office in this new reality?

July 20, 2020: Applications open.

Apply online on www.techstars.com

Applications open for 90 days. Apply early in the cycle to gain an advantage.

No application fee.

Preeti Verma Lal is a Goa-based freelance writer/photographer.