Techstars, a startup accelerator, is in the process of raising $150 million for its new fund, according to filings with the U.S. Securities and Exchange Commission (SEC).
According to a report by TechCrunch, the purpose of this fundraising is to secure additional capital before the conclusion of its third institutionally-backed fund, Techstars Accelerator 2021, later this year.
“Techstars has not provided specific details regarding the utilization of the funding due to regulatory restrictions. However, similar to its previous funds, the newly established Techstars Accelerator 2024 fund is expected to be allocated for investments in accelerator-stage and/or post-accelerator startups.”
It’s worth noting that the early-stage investor, based in Boulder, has solely utilized its current fund for accelerator-stage investments. In contrast, its previous funds supported startups during both the accelerator stage and through follow-on investments after the program.
Fund 3 had the objective of supporting more than 800 pre-seed and seed startups participating in Techstars’ global accelerator programs by the end of 2023.
It is noted that throughout its accelerator groups, Techstars has already provided support to over 3,500 early-stage startups operating in various sectors, including health tech, fintech, web3 and clean tech.
Startups that participate in Techstars’ three-month program receive $20,000 in funding and a $100,000 convertible note, in exchange for 6% to 9% ownership of common stock.
Additionally, they gain access to the accelerator’s network, mentorship, and other valuable resources.
Established in 2006, Techstars operates more than 50 accelerator groups in major cities worldwide, such as New York, Los Angeles, London, Boston, Tel Aviv, and Lagos.
In line with its goal to expand its specialized and generalist programs globally, Techstars partnered with ARM Labs to launch its Lagos arm last year.
To further strengthen its investment initiatives, Techstars recently introduced new funds. One example is Rising Stars, which supports startups that are too early for the accelerator programs.
Through this fund, Techstars provides $100,000 in investments in exchange for 7% to 10% equity.
The accelerator also collaborated with JPMorgan to establish the Advancing Cities Fund, an $80 million initiative aimed at supporting over 400 startups founded by diverse entrepreneurs across nine cities in the United States.