How Much Does a Corporation Pay to Have TechStars Power a Custom Accelerator Program?

The cost for a corporation to have TechStars power a custom accelerator program can vary widely based on several factors including the program's length, the number of startups involved, and the specific services requested. Generally, the investment can range from $500,000 to several million dollars. This investment typically covers program management, mentorship resources, and operational costs. Corporations may also need to consider additional expenses for marketing events and other related activities. For the most accurate and detailed information, it's best to directly consult TechStars or review their specific offerings and pricing structures.

Key Factors Influencing Costs

TechStars doesn't typically customize its accelerator program for corporates beyond the theme, such as Retail, FinTech, etc. Their pricing varies based on two key parameters: the HQ location of the corporate and the location of the corporate accelerator program. The typical cost range is between $1.5M to $2.5M per annum. There are unverified reports of preferential pricing for programs that use the TechStars branding. Initial data suggests that the base sponsorship fee has increased to between $2M to $3M per program, plus the initial investment into each startup.

Historical Pricing and Structure

Back in 2014, TechStars charged roughly $1M per program for an accelerator cycle involving around 10 startups, covering a 3-month period. Corporate sponsors also invested $100k into each startup. The initial investment netted these startups 7-10 equity splits between TechStars and the corporate sponsor. Nowadays, the base sponsorship fee has risen to between $2M to $3M per program, exacerbated by the additional initial startup investments.

Corporate Sponsorship Model Controversies

The new pricing model works well for corporate sponsors, but there are some subtle downsides. TechStars does not fully control which startups go into its fund portfolio. If a sponsor wants a specific startup for strategic reasons but it is not a great investment (for example, if the market is too small or the team is weak despite good technology), the sponsor typically gets its way, even though this can take away a slot from a potentially better investment startup. This tension is particularly relevant when one big sponsor underwrites the bulk of the program. It is unclear how often this happens and its impact on overall fund performance, but it is a notable aspect of the corporate sponsorship model.

Conclusion

The cost to have TechStars power a custom accelerator program is not a straightforward figure, as it varies greatly depending on the specific needs and resources of the corporation, the desired length and focus of the program, and the chosen location. Corporate sponsors can invest between $500,000 to several million dollars to access the expertise and network provided by TechStars. However, the sponsorship model inherently involves a balance between corporate objectives and the best interests of the startups in the program.

For more detailed information and to explore specific options, corporations are encouraged to directly contact TechStars or review their offerings and pricing structures. This personalized approach allows for tailored solutions that can meet the unique needs and goals of each corporate sponsor.

Key Takeaways: - The cost varies from $500,000 to several million dollars. - Factors influencing costs include program length, number of startups, and specific services. - TechStars' accelerator model allows corporations to have a say in selecting startups. - The model may not always align with the best investment opportunities but works well for strategic initiatives.

Related Questions to Explore: - What are the differences between the TechStars model and other accelerator programs? - How do the start-up selection processes work in a corporate-sponsored TechStars program? - What long-term value does a corporate accelerator program offer for a company?