TechStars Says This Is Why Hardly Any Of Its Companies Fail

Startups that go through TechStars seem to be bound for success.

TechStars is a three-month accelerator program that gives entrepreneurs access to mentors, and invests $118,000 in each company: $18,000 in seed funding and an optional $100,000 convertible note.

TechStars, which has offices in New York, Boston, Boulder, London, Chicago, and Seattle, has funded companies like SendGrid, Condition One, Kinvey, and Timehop, to name a few.

Out of the 175 startups that have gone through TechStars, 90% of them are still up-and-running or have been acquired.

That's not a much higher rate than some other accelerators.

Silicon Valley's prestigious Y Combinator accelerator has a just slightly lower success rate. 88% are active or have made an exit, according to YC list, an unofficial database of all YC companies.

Still, 88% is good – especially in startups, where most fail.

So why does TechStars have such an impressive success rate?

Well, it comes down to a few things, but here's the main reason why.

TechStars Boston Manging Director Katie Rae recently schooled us on why most of the startups that come out of TechStars end up being so successful.

"A huge part of TechStars and why we have space is because we think if you put them together, they form a much tighter bond with each other," Rae says. "All of the classes remain incredibly good friends [and] allies in the joy and dark moments of entrepreneurship."

In light of the recent suicides in the startup industry, those allies may be more important than anyone could possibly imagine.

"People talk about (allies), but it’s real and it’s so important," Rae says. "I think that’s one of the reasons so few of our companies die. People have each other’s backs. I try to drop people into trusting relationships very very quickly. And you know, people always laugh about it, but it’s real and it’s real to me, and it’s one of the things that I think is my primary job is to kind of create space where people can put it all out there and get to an honest assessment where they are, where their team is and what they need to get done."

If entrepreneurs can work in an open and honest space, Rae says, they can make a lot more progress.

"You can take your cloak off and be real with other entrepreneurs who are going through the same stuff," Rae says.