There are two path to venture capitalist – the first I’m currently on as I look for a summer internship before starting an MBA in finance.
The second in a far a rockier road that starts with an idea…
In February, Startup Grind DC had the honor of hosting Congressman Jared Polis (cofounder of TechStars, ProFlowers, BlueMountainArts.com). Often the tech and entrepreneurship community can feel overshadowed by the power and influence emanating from The Hill. While “Hill people” cloister in elegant Senate offices and old-style bars bowing off of K street, the area’s entrepreneurs coalesce in warehouses converted to coworking spaces and dive bars papered with stickers from former next-big-things.
It’s a seismic event, then, when the DC tech and Hill communities can come crashing together over a double-threat like they did last February with Congressman Polis. Rep. Polis has been serving Colorado’s 2nd district since 2009. Prior to becoming a politico, Polis founded and successfully sold three technology companies. He is now a mentor with TechStars, a startup accelerator.
Similar to our January speaker Alex Hawkinson, Polis grew up in an entrepreneurial family, learning sales from a young age. His first sell was BlueMountainArts.com, which he started with his parents using his father’s artwork to create online greeting cards. His second sell, American Information Systems, an internet access provider, went for $32 million. He immediately used the capital to found ProFlowers, an online florist.
It was at that point Rep. Polis moved from entrepreneur to mentor.
Before TechStars Were Stars
Brian listed Rep. Polis’ impressive cofounders: “David Cohen, Brad Feld, David Brown – these are big names in the startup community. How did you meet these guys?” Ever humble, Polis explains, “We weren’t all as big back then…There wasn’t a lot of us in the late ‘90s. The community wasn’t that big up there, so we all knew each other”.
Of the early days, he says “We didn’t have as many applicants. I was really active in the early days. We knew most of the founders in tech, so we’d ask them.” He explained, “Most of them enjoy this, they said ‘Sure I’d love to do this!’. Sometimes the companies wouldn’t interest [the mentors] – other times, one or two would be really interesting and they’d do their own angel investment.”
Brian asked about mentor buy-in, a common requirement for accelerators today. “But no, there was certainly no promise that they had to do anything in particular,” said Polis, “I think a lot of the mentors were looking to have fun. Some became CEOs or board members, and got buy-in that way.”
Taking a slight dig at “Things that call themselves accelerators these days”, Jared describes TechStars as a summer camp for startups, “This was a two and half month program in summer, housed together in one place. They had regular mentor visits with the companies. It was a full time program for everyone who was there.”
“We made sure to find the right mentors for each startup. We were trying to match everyone on the personal chemistry, as well as the core competencies.”
How Mature Does Your Startup Need to Be?
“If you have a million users, you are ready for Series A,” laughed Polis. “[TechStars] has migrated slightly from mid-stage to early-stage in the first few years. There are still pre-proof of concept companies, but much of the competition has some type of beta or proof of concept, so you are up against that, but it doesn’t mean that the right team and the right idea can’t get in before that.”
Proof of concept (POC), means that a startup has demonstrated their principle or product has actual usability. This may mean a growing user base, a beta product being used by a few potential customers, or a model that has been applied and shown to solve a specific problem. Having a POC doesn’t mean a startup isn’t going to change their direction though.
“Accelerators offer the most value right in the early stage. I think a lot of the companies who have gone through TechStars have pivoted on their idea anyway.” Major pivoting may occur after realizing that burning idea doesn’t really have the customer base, or maybe a small aspect of your company is getting all the attention from potential consumers. Said Polis, about a third of TechStars start-ups undergo a major pivot during their accelerator phase.
“It Is Harder to Get into TechStars than Harvard”
“That could be,” said Polis, a little unnerved. “It depends on the city. You get 600 applications and most of them are just throwaways. You throw out more than half. There’s a big piece missing – either it is an idea that is hair-brained, or you have a team that has no potential to execute the idea.”
Asked about metrics for measuring applications, Polis responds, “Well in the application we go to the zoo, get a monkey, put all the applications on the wall, give him a dart and [the monkey] throws a dart.”
His more serious response was “idea and team”:
– Does this idea make sense?
– Do these people show they have what it takes to execute the idea?
– Do they show there is a need and a marketplace?
– Do the teammates compliment one another?
– Are there holes in the team?
– If so, are they aware of these holes?
TechStar to Politician: Why?
“This is a brand new set of challenges”, said Polis about his new career. “I had done well enough in business, I could think about what I want to do next, and I wanted to make an impact…I decided I wanted to dedicate a portion of my life to public service.”
Polis’s first foray into politics was in the education system, attempting to unseat the incumbent on the Colorado Board of Education. With 1.6 million voters, the split came down to ninety-two votes. Thanks to those ninety-two votes, Polis’s career continued to move forward, and today his reforms are impacting the startup community.
“One of the big reforms is of course immigration reform,” shares Polis. “One [reform] is a visa for founders. The other has to do with capital formation, EB5, to allow more capital for investment. And one is the high-skilled visa, so you can get the high skills in this country that you need to succeed. And my passion in public service has always been education…that’s all the way through the K-12 system to affordable access to college.”