Colin Boardway - Originally from Buffalo NY, Colin just graduated from Loyola University. He specializes in inbound marketing and is working to make a name for himself in the Chicago Startup community. He’s put in his 10,000 hours as a working DJ and also manages digital marketing efforts and events with Entrepreneurs Unpluggd. Though he would eventually like to run his own startup, he is eager to put his skills to work helping the TechStars teams this summer. In his spare time he enjoys being probably the Midwest’s leading taco aficionado. You can usually find him biking the streets of Chicago, or you can follow him on Twitter @ColinBoardway.

Ian Connell - Ian loves all things startup. A California transplant, Ian began his career with a startup focusing on improving state and local government through SaaS program management solutions.  Mid 2012, Ian was looking to gain some experience on the other side of the table and took a duel role as 1) a summer associate at Kapor Capital working on early and seed-stage investments in the EduTech and Human Capital verticals and 2) as a strategy intern for one of Kapor’s portfolio companies UniversityNow Inc. Ian is currently pursuing his MBA at the University of Chicago Booth School of Business. Since moving to Chicago, Ian has been working as an associate with Hyde Park Venture Partners and Hyde Park Angels. Outside of work and school, Ian volunteers with Management Leadership for Tomorrow (MLT), a nonprofit focusing on increasing the pipeline of under-represented groups in top universities, and spends all of his remaining time praying for a 70-degree day. Check him out at @IanConnel271

Ryan Fukushima - Hailing from sunny streets of Silicon Valley, Ryan has a soft spot for warm beaches and startups. Two years ago, he decided to take his talents to Michigan’s Ross School of Business and hasn’t looked back since. While Michigan is lacking in the beach department, he has been supporting the entrepreneurial community as an associate at two local VC funds. The Midwest has definitely won him over and he’s excited about the vibrant Chicago scene. When he’s not in the office he’s likely cheering on his fellow Wolverines, trying to surf in Lake Michigan, or validating product-market fit. His fun fact is quite awesome but you’ll have to chat with him to find out more – follow him @RyFukushima

Getting more twice as many applications as we had last year is a clear signal that this program is continuing to earn respect of entrepreneurs everywhere and that Chicago is becoming a leading destination for developing technology companies.

Here is a quick run down on the 2013 TechStars Chicago class:

CaptureProof – Is a platform for patients to securely and easily share photos and videos with their doctors.

HIPOM – Gives parents total control of Internet access in the home on a device-by-device basis. The cloud-based solution makes it as simple as a light switch to turn individual devices on and off and even set timers to control them automatically.

Nexercise – Mobile app that makes fitness fun through the use of friendly competition, smart alerts and real rewards.

Pathful – Web analytics platform that captures every visitor interaction with every element on a website automatically. Makes it easier for marketers and designers to understand what users are really doing on their site.

Peoplematics – Unlocks the data users store in the cloud with intuitive search and sharing across applications.

Project Fixup – Digital matchmaker that fixes people up on fun one-on-one dates.

SimpleRelevance – Analytics-driven email marketing platform that provides customized digital communication for every customer and every message.

SocialCrunch – The new way to unlock the most provocative human insights for brands and their agencies.

Sqord, Inc. – Makes healthy, active play more fun for kids by allowing them to compete and earn points for everyday activities.

TradingView – An online community for investors and traders to share and discuss their ideas.

Have you dreamed of becoming the next success story to come out of TechStars but don’t have a team or an idea? Are you a full stack developer who can execute like all hell? Great news! TechStars Chicago is recruiting for our HackStars program for the summer of 2013!

Hackstars are highly-skilled software developers and designers that love to work with the companies and go through the TechStars program.  Plus, they get paid for the program (just like the founders) and most HackStars ultimately land a job or co-founder status with one of the startups. What a great way to hack into TechStars!

What we’re looking for:

·       You’re a a code-slinging mac-daddy superstar guru at PHP, Java, .NET, Python, Objective-C, Ruby, JQuery, or design/UI/UX.

·       You can design, cut and code efficiently and brilliantly

·       You want to have a TechStars experience so you can learn all about startups and funding from our mentors.

·       You want to work side-by-side with some of the country’s most promising new founders and young companies. (wait until you see the great companies we accepted for this summer!)

·       You live in Chicago, or are willing to relocate for the program and are willing to dedicate 100% of your time during the program to TechStars Chicago.

In addition to being compensated ($6,000), your network will explode beyond all comprehension and you’ll have the chance to work along side some of best and brightest new companies.

Applications close May 30th,so what are you waiting for? Are you ready to join the TechStars network? Apply now!

We will have finger food, drinks and some amazing entrepreneurs, but RSVP quickly as space is limited!  

 
For those who are curious, here are some highlights from Demo Day 2012 at the House of Blues (how about that foreshadowing by Brad Feld, who noticed it last August???)

Women Entrepreneurs at Excelerate Labs from Excelerate Labs on Vimeo.

Excelerate Labs has always been a busy place in the summer with 10 amazing companies in the throws of intense programming.  Now that we are part of TechStars and sitting on a national platform, it will be even more exciting and we need help!  

We are looking for MBA and undergraduate interns for the summer of 2013.  If you are excited about helping build the next amazing batch of internet startups, as they grow from early stage to venture-backed companies, this might just be the best decision you ever make.  It will be crazy, it will be intense, it will be exhausting and it will be the best decision you ever made.  You will participate in mentor meetings, the Chicago program’s famous “Entrepreneur’s MBA” and of course Demo Day.  Some days you will be ordering pizza and managing calendars, others you may be giving a tour to out of town VC’s – there is a little bit of everything.

Our program runs from the last week in May through the end of August, you must be available to be in Chicago full time.

Requirements for Undergrad Interns: Rising senior or recently graduated. Demonstrated interest in startups. Comfortable with uncertainty and self-directed.

Requirements for MBA Interns: Completed your first year or have recently graduated. Able to leverage your knowledge of startups, business models, strategy, finance, and more to help both our companies and the program. Ready to manage one or more interns.

The applications are open until February 22nd at midnight central time, so apply now!

The original post

A. They have all invested in alums of Excelerate Labs in its three short years of existence and none of these firms even has a presence in Chicago.

Excelerate Labs is the best accelerator most people (outside of Chicago) have never heard of.  Ranked #3 in the nation (after TechStars Boulder & YC) by both Kaufman and Forbes, Excelerate Labs has earned a place among the very best startup accelerators in the world, and has done so very quietly.

Today, that changes.

In the last three years, almost 1,000 entrepreneurs have applied to Excelerate, with the only the best 30 making it in to our classes.  Excelerate companies hail from Chicago and the Midwest, yes, but also from California, Massachusetts, Texas, Kentucky,  Florida, France, and India.  Those founding teams have described joining Excelerate as “life changing” and “the best decision I ever made.”

Today, founders across the world have a chance to challenge themselves like never before.

Excelerate is a three-year-old startup going through an incredible growth phase, bringing in better investors, better mentors, better companies, and most importantly, better entrepreneurs as it matures.  Like any other high-growth startup, there comes a time in in the life cycle when it makes sense to pour fuel on the fire.

Today is that day.

And that fuel is TechStars.  Excelerate Labs is now TechStars Chicago.

TechStars Chicago is everything Excelerate Labs was with the added benefits of everything TechStars is.  This is an unprecedented joining of forces, marrying two kindred spirits to better serve entrepreneurs.

TechStars Chicago companies will get all the same program leadership and awesome mentors that previous companies have gotten, plus the leverage of a larger national platform specifically designed to supercharge the growth of early stage companies.  Not only that, but TechStars Chicago will offer companies over $100,000 in funding – much more than Excelerate Labs offered previously.

The team that built Excelerate is now the team building TechStars Chicago.  Co-Founders Sam Yagan, Nick Rosa, and Adam Koopersmith will remain on TechStars Chicago Board and I will continue to run the program as I have for the last two years.

On that note, I should get back to work building our next chapter as TechStars Chicago.  And you should tell everyone you know to apply to TechStars Chicago – Applications open today!

- Troy

Over the last few years, convertible debt has become a popular vehicle for early stage companies that are raising money.   A lot has been written about it from how it affects your cap table to how it is good or bad for both the investor and the entrepreneur.  But there is still a lot of confusion surrounding convertible debt and its uses.  The core of this confusion stems from the language we use and the fact that there are actually two entirely different use cases that get lumped together in that one vague term “convertible debt.”  I am going to be bold and propose that we eliminate the vague term from our vocabulary and adopt a new term for each of these:

-       Bridge Loans

-       Equity Replacement Debt

Bridge Loans are used when a company has a pending round of funding but needs a little help with cash flow between now and then (usually no more than 90 or 120 days) They will open up a round of debt financing where investors receive both interest on their money invested and a discount on the next round when it closes.  This is helpful to the company to solve their immediate cash flow problems and it is helpful to the investors as they are guaranteed to be in that next round and are rewarded with a discount for taking the risk of providing the capital before all the details and all of the capital of the round are solidified.

Equity Replacement Debt is something totally different; this is when the company decided to use convertible debt in place of doing an equity round.  The capital provided will typically provide 12 – 24 months of runway for the company.  These rounds typically have a “cap” in the valuation (and may have a discount too) as the investors are taking the risk today, based on the progress that the company has made to date.  Since the valuation on the investment will be made at the next round, in the future, after more progress has been made, many investors insist on a “cap” on that valuation (“My money will go in at a maximum pre-money valuation of $xxx”).

In my opinion as both an investor and an entrepreneur, I am fine with Bridge Loans – they solve a real problem for the company and reward the investor with a better price for the addition risk that he/she is taking by providing cash before the details of the round are complete.

The Equity Replacement Debt rounds have a host of problems with them.  First the “cap” is a misnomer, it really should be called a “valuation” because it is an attempt at placing a value on what the company is worth at the time of the transaction.  But, valuation is just one of many terms that go into an equity financing, is the equity participating preferred stock or convertible preferred?  Is there a preferential return?  What are the anti-dilution provisions?  Is there any board control specified?  All of these work together with the valuation to make a fair deal.  No experienced entrepreneur or investor would establish the valuation without knowing what the other terms were going to be.  YET, it is effectively done all the time with Equity Replacement Debt!  Recently, I have seen some term sheets that attempt to spell out some of these details in the convertible debt document, inching the process closer and closer to a real equity round both in its complication to execute and its cost to complete, reducing the benefits that most entrepreneurs site for doing it in the first place.

As you see just how different these two use cases are, it is no wonder that there is confusion and debate around the issue of “Should we use convertible debt?” If we would be more specific in our language we could provide a lot more transparency and focus our energy less on fancy investing vehicles and more on building great companies!

If you agree, then PLEASE start being more specific and let’s start talking about Bridge Loans and Equity Replacement Debt rather than using a vague, generic term that just confuses the issue…