TechStars announced it has raised a new $24 million fund that will allow it to up the amount of money it provides each startup to $100,000. The new funding is being raised by Foundry Group, IA Ventures, Avalon Ventures, DFJ Mercury, SoftBank Capital, SVB Financial Group, RRE Ventures, Right Side Capital Management and TechStars Alumni.
The new money will be applied to all of TechStars classes in 2012 including Boston, Boulder, New York City and Seattle. TechStars supports about 60 startups a year and previously raised money from 75 venture funds and angel investors. It used to provide up to $18,000 a year for startups who were selected into its program. The program, which launched in 2007, has been on the pioneers in the start-up accelerator space and has spread its model around the world.
The new money seems to acknowledge the rising interest in accelerator programs now that Yuri Milner and SV Angel have pledged $150,000 for each Y Combinator company.
TechStars Founder and CEO, David Cohen:
Acceptance into TechStars now means an additional $100k of funding from a diverse group of top tier investors. This additional funding will allow TechStars companies to stay focused on making progress during the three-month program instead of spending that valuable time on early fundraising in order to make ends meet. It’s also enough funding to entice a broader spectrum of would-be entrepreneurs to consider TechStars. This funding comes from a wide swath of the venture community nationally which means that TechStars companies will now enjoy tremendously broad support from a large number of investors that are each vested in their ultimate success, while avoiding the signaling problems associated with taking money from a single venture fund or investor.