TechStars will be looking to hatch companies in Seattle for the next three years, thanks in part to cash from some of the region’s leading venture capital firms. TechStars Seattle, the branch of the popular startup incubation program, has raised $1.5 million in new funding that will support up to 30 new companies over the next three years.
Madrona Venture Group led the funding, supported by Ignition Partners, Trilogy, Founder’s Co-op, Maveron, Voyager Capital and others. The cash is separate from the larger $24 million round that TechStars raised last fall.
“This is a real show of support that the model is working, and is valuable to the local ecosystem,” said Andy Sack, the Seattle angel investor and entrepreneur who leads the the organization from its South Lake Union base.
The TechStars Seattle outpost arrived in 2010, adding to other locations such as Boulder, Boston and New York City. To date, it has graduated two classes from the three-month startup bootcamp, producing companies such as Highlighter, Thinkfuse, Vizify and EveryMove.
Sack said it is too early to judge the success of TechStars from a financial standpoint.
“When I started this, (TechStars co-founder) Brad Feld told me that it was a five-year odyssey,” said Sack. “It was a huge step-up in impact between years one and two, and I expect a significant step-up this year.”
TechStars Seattle is currently accepting applications through June, with the next class to start the program in August.
Entrepreneurs who enter TechStars receive up to $18,000 in initial funding, giving up six percent of their companies. Starting this year, companies also have the option to take an additional $100,000 convertible note after being accepted into the program.
In Seattle, some have argued that there’s a lack of funding of early-stage companies, a gap that TechStars is trying to help fill.
“I think the impact has already been felt,” said Sack. “We just need more shots on goal, and more companies growing, and ultimately healthy exits.”
Sack, who is recovering from a battle with cancer, said he plans to return full-time to his role of managing TechStars Seattle for the summer class.