Techstars CEO on Running a Startup Accelerator in a Downturn
Maelle Gavet has lived and worked through economic downturns, both as a startup entrepreneur and a tech company exec. And she doesn’t like what’s on the horizon.
“The economy is melting, and specifically in the tech industry we’re looking at a massive market reset,” she said.
But Gavet, a former Priceline and Compass executive who became CEO of Techstars last year, also sees opportunity.
“We help founders build sustainable, resilient businesses and prepare them to go raise their next round,” she said. “Our formula is even more relevant during an economic crisis.”
GeekWire interviewed Gavet this week in Seattle, where she was visiting from New York City for a series of events hosted by Techstars. Nearly 3,000 startups have gone through Techstars’ 3-month accelerators since it launched in 2006.
Techstars expanded to Seattle in 2010, and since then more than 130 companies have gone through the program. They have collectively gone on to raise more than $2.5 billion in private capital. The 2011 class alone produced three unicorns.
“Seattle has a super vibrant ecosystem,” Gavet said.
Before taking the reins of Techstars, Gavet was previously chief operating officer at real estate giant Compass. She also was CEO of Russia’s largest e-commerce site, OZON.ru, and published a book in 2020 called “Trampled by Unicorns: Big Tech’s Empathy Problem and How to Fix It.”
We asked Gavet about advice she’s giving entrepreneurs amid the current downturn; why Techstars is focused on underrepresented founders; and more. The interview was edited for brevity and clarity.
GeekWire: Thanks for speaking with us, Maelle. What are you telling founders right now?
Maelle Gavet: The reality is that very few founders have gone through this type of downturn. We’re spending quite a bit of time talking about general awareness of what is currently happening in the world. We’re helping them think about their cash flow and how do to reduce cash burn, and creating additional cash facilities. We haven’t seen down rounds yet, but I think it’s going to come. We’re preparing founders for what is very likely going to be hand-to-hand combat for fundraising.
What do you mean by that?
There are always exceptions, but fundraising over the last 18 months was generally relatively easy. Now we’re going back to what is a more normal situation, where it takes six-to-nine months to fundraise and you have excruciating due diligence. But the market won’t stop completely. The VC industry still has a lot of money to deploy. And there’s an opportunistic approach from a lot investors as valuations go down.
Techstars has been around for 16 years. What’s the secret sauce?
Techstars was built on one core principle: give first. It’s this idea that you give first, support communities, build ecosystems, help entrepreneurs succeed, and along the way things will work out. And now Techstars is one of the largest pre-seed investors in the world.
When it comes to the venture capital industry, we are partners. We help entrepreneurs fill gaps and build businesses that can become VC-backed, and we do that at scale. We do the work that most VCs aren’t equipped to do because of their structure.
Tell us about Techstars’ commitment to support underrepresented entrepreneurs.
It’s good for business. There are underserved founders who have unbelievable potential and very few people are catering to their needs. The tech investment world has been focused on the same swimming pool. We are focusing on the ocean, and helping founders get their ticket to the swimming pool and know how to behave when they get there.
Financially, the biggest upside comes from pockets that are being unexplored and unsupported. Let’s go find the founders that are not getting the attention that they deserve and give them support.
Thoughts on Seattle?
It is hard to find a more welcoming ecosystem for entrepreneurs, both in terms of people and infrastructure and a genuine interest toward innovation. And Seattle does it in a non-Silicon Valley way. There’s something about Seattle that is more welcoming. There’s a genuine conversation happening here about impact that we are having collectively as we build and support companies.
Applications are open for the 14th Techstars Seattle cohort. What advice do you have for founders who want to apply?
Come talk to us before getting into the application process. Talk to us about what you’re working on and what you’re excited about. What is the problem you are trying to solve, that is so big and so important that you are willing to sacrifice 10 years of your life trying to solve it? And how do you think about your team? What is the team that you’re looking to put together? We deeply believe in human connection as a source of success.