Tuesday, November 30, 2010

TechStars Boston's Rae shares plans for startup incubator

By Galen Moore

Katie Rae is taking over the helm at TechStars Boston, the Boulder, Colo.-based incubator program announced this morning. A frequent mentor to startups and angel investors, and a co-founder at nascent Cambridge micro-VC fund Project 11 Ventures, she replaces Shawn Broderick, who stepped down earlier this month to run Play140, a social game startup he co-founded earlier this year. Rae talked with MHT reporter Galen Moore about women in tech, why Boston might be missing out on the tech investing bubble, and why that might be a good thing. She declined to talk about Project 11, which has made two investments and is still out raising its first fund.

MHT: We talked this morning about your optimism about Boston generally - but can you be more specific? What’s happened here in the past year or two that gives reason for optimism?

Rae: Let’s back way up: I actually think it’s more a four- or five-year trend that is all positive. It’s more and more engagement and attention to the early stage. A lot of people have contributed to that. WebInno last night, wasn’t it great? Was it packed? Was it awesome? Yes. MassChallenge. Techstars. A new crop of angels coming up, who have exited businesses. All of those things have wonderful, positive impacts. Then, there’s a whole bunch of grass roots things, like DartBoston and lots of meetups, lean startup stuff. It’s just becoming this growing culture of people getting together to figure out how to make these early-stage businesses work.

This is the other piece I don’t think gets talked about a lot, but I think it’s important: optimism about what is possible is such an important feature in any startup culture. I’m not talking about blind optimism. I’m talking about kind of the belief that it can be done. Boston has deep roots in that, but sometimes we lose our way a little bit on that topic, and it’s those communities that embrace that and have the talent pool. You have to have both of those. Boston has all of that going, and I think the optimism is building. New York has it. Silicon Valley has it.

MHT: Did we have that in Boston, and then lose it?

Rae: In some areas we did lose that. You hear all this comparison to Silicon Valley. All of that is us turning away from what we have. I think there’s a growing embrace of how rich and how deep our early stage community is here. And that’s exciting. That’s why I wanted to do the TechStars thing. TechStars kind of embodies all of that.

MHT: Much of what we’re talking about is focused on consumer web startups. Will you try to expand TechStars’ focus beyond that to other kinds of companies?

Rae: I don’t want to say what kind of companies we’ll accept. But they do take companies that span a broader set of things than just web. They’ve had hardware stuff and some other interesting things.

MHT: What about increasing the number of women entrepreneurs in the program?

Rae: Certainly an unstated goal is to bring as diverse a group of people to TechStars as possible. That’s hugely important and it naturally happens: when you diversify who’s around, you diversify who seeks you out.

MHT: How does Boston stand in general on women in tech?

Rae: We have a very strong group of female founders, and they mentor each other. We get together. It is an awesome community. She E O’s is one of them. There is a whole bunch of groups like that, all the way up the chain to public companies.

MHT: What will you do to increase women’s participation in high-tech startups?

Rae: What I can do is to reach out to all the communities and drum up interest there. Tomorrow there’s a women’s breakfast for women seeking venture capital.  I will be there. There’s a whole bunch of engineering clubs at MIT and Harvard and BU that try to attract a more diverse crowd. I will be there drumming up interest.

MHT: There’s a lot of talk of a bubble in consumer tech investing. Is Boston participating?

Rae: I don’t see it as much in Boston, but I’m very aware of what’s happening in California and New York, and the deals that I see in Boston don’t appear to look like that.

MHT: Is that a good thing, or a bad thing?

Rae: I think it has elements of both – but I think in general it’s good, because I think after a bubble you have a lot of devastation. And we just kind of are steady as you go. Early-stage valuations look about in the range that they should. I’m not saying there aren’t some things that look like a bubble, but I don’t think we’ve seen that as much here.

MHT: Is New York drawing away founders from Boston?

Rae: I can tell you that I am thrilled there is a TechStars New York going on. I think that will be great for Boston as well. There’ll be a lot of back and forth between the classes.

MHT: You’re managing two roles here – as a Project 11 investor, and as an investor and mentor at TechStars. How do you keep church and state separate?

Rae: The TechStars companies – yes, I am acting as an investor there, and a mentor, and you keep your activities completely separate. My goals with the TechStars teams are to help them get as far and as fast as they can in the program and afterward. And then Project 11 is a separate entity, just like it is for Andy Sack in Seattle.