Few things build as much confidence in a prospective buyer as a money-back guarantee. Not only because she can rest assured that she could get her money back if she were to be unsatisfied; but, more importantly, she knows that the vendor is so confident in his product that he’s willing to stand behind it and guarantee her satisfaction.
I thought about this extreme confidence last week when Techstars — the world’s number one accelerator — announced its “equity back guarantee.” As a Techstars alum (Simple Energy was part of the Boulder 2011 class), I know that this guarantee is both (a) completely in line with everything that makes Techstars what it is, and, like the best money-back guarantees (b) completely unnecessary.
Techstars has adopted an unofficial mantra (hashtag?) to embody it ethos: #GiveFirst. Techstars companies receive funding, mentorship, and a network of people who care so deeply and selflessly about their success that newcomers to the Techstars network often seem to have a skeptical posture (yes, these people really want to help you; no, you really don’t need to pay them… it’s okay!). The value companies get from being in Techstars and joining the Techstars community far outweighs the 6% of common stock Techstars receives.
The value of Techstars has been demonstrated time and against both during the three months we were in the program and in the three years since we “graduated:” Techstars mentors have shaped our business, our go-to-market, our team development, our fundraising strategy, and nearly every other aspect of our business. They gave us incredible feedback during the program, funded our first two rounds of outside investment, and have been sounding boards for every major decision we’ve had to make.
A few weeks ago, a Techstars mentor with whom I hadn’t spoken in two years responded to a routine update email with an insightful question. His question led me to dig deeper into a key partnership and discover a problem I hadn’t even known was brewing. The mentor coached me on how to best approach the situation, encouraged me to have a hard conversation, gave me a pep talk immediately before I walked in, and then checked in with me afterwards. The result is a major potential pitfall for our company avoided and a key relationship strengthened.
And, that was from a mentor I hadn’t talked to in two years, whose only motivation is a desire to see our company succeed.
Given that type of “customer experience” it’s natural that Techstars would follow world class brands like REI, Costco, and P&G in having the confidence to stand behind their “product” with an
money equity back guarantee.
And, like those esteemed brands, I have no doubt that they’ll very rarely be asked to honor it.