UPDATE: Details of Techstars’ new equity ‘guarantee’ clarified

Techstars Boston director Semyon Dukach (photo by Kyle Alspach)
Techstars Boston director Semyon Dukach (photo by Kyle Alspach)

Earlier, I wrote a post about how Tech stars’ new approach to taking equity in participating startups addresses one of the criticisms that some have in regards to the accelerator program.

Dan Primack wrote a piece earlier about the startup accelerator program’s new “guarantee.” I misread that as a kind of “pay what you want” philosophy, which isn’t actually accurate.  Companies will still give up equity to take part in the program, it can just be negotiated if they are unsatisfied with their Techstars’ experience.

Semyon Dukach, Techstars Boston’s managing director, reached out to me to give me some more insight into how the the new practice will be applied.

“It’s not actually pay what you want,” he said. “We happen to know that at the end of the program, 99 percent of founders feel like they got more value than the 6 percent equity that they pay.”

Dukach added that the program has enough of a track record to know that almost no one is unsatisfied with what they get out of Techstars. He also said that the new policy may help some companies, that are farther along than some of the early stage startups that normally take part in the accelerator, have more interest if they are worried that 6 percent equity  is too much.

“We are confident that over the course of the program, they are going to see the full value. We know that value is way higher,” Dukach said.

The guarantee announced earlier can help assuage some of those fears.

“If we are wrong, and if a situation arises that we are wrong, and screw up,” Dukach explained, “and at the end of the program you down with me and tell me where we failed, we can do something about that.”

“We are offering this because we don’t expect it to happen,” he added.

“We do have this experience of lots of founders coming out after and saying, ‘Wow, we’d pay double…its not even close.’ That gives us the confidence to allow us to offer this guarantee,” Dukach concluded.

Dennis Keohane was a Senior Staff Writer for BetaBoston.
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