3,300 investments and counting: Building businesses with empathy

Techstars is one of the largest accelerators of the work. How does their CEO approach investing and growing young businesses?
Maelle Gavet
Profile picture


Our guest in The Wall Street Lab today is Maëlle Gavet, the CEO of Techstars. Techstars is one of the world’s largest pre-seed investors, with over 3,300 investments. Maëlle is the Author of “Trampled by Unicorns” and an advocate for Empathetic Tech.

In the interview, we’ll discuss:

  • How big Techstars really is
  • Why empathy is key to drive long-term impact
  • How ESG criteria play into Techstars’ strategy

Have fun!



Maelle, could you give us a bit of background? I think Techstars should be a name in the industry, but I just want to make sure of how big Techstars really is.


So, you mentioned some of the numbers earlier; we are the largest pre-seed investor globally, and we now have 3,300 companies and counting in our portfolio. This year we are gonna do between 550 and 600 pre-seed investments. Next year, we expect that number to be closer to 800, and we have been operating for 15 years.

We have employees in 15 countries operating accelerator programs where we invite the startups that we invest in for three months, intense bootcamp, and we also have a huge network. 

Techstars’ value proposition for entrepreneurs is very focused on community and mentorship, and so we have well over 7,000 mentors who are actually involved into the program to support founders and help them be successful.


Wow. I think this is probably the biggest investor I’ve ever spoken to in terms of number of investments, not counting public, public company investors. This is amazing. And what brings you to a place like Web Summit in Lisbon?


So the first reason is because of the size of Techstars and the number of portfolio companies, alumni, and mentors. Web Summit is just an opportunity to see in person a lot of Techstars-related people.

And I’m old-fashioned. I like in-person. I like being able to look at people in the eyes like their real eyes, not their Zoom eyes. Like we all operate much better when we can have this in-person conversation, and then we can always go back to Zoom. 

So that’s the first reason. The second reason is as an investor, we are always looking for new entrepreneurs that we would be happy to invest in and then support again with our program, our services, and community.

And Web Summit is an amazing opportunity to do that. And then the last reason is, again, as an investor, we are always looking to be part of a global ecosystem. 

To a large extent, we are a vital piece of the deal flow venture capitalists invest in. And so we meet a lot of venture capitalists. We have 20,000 investors who have invested in a Techstars company at one point or another. And so just making sure that they know about us, the deal flow, and our portfolio companies.

We’re shameless about talking about our portfolio company. We’re very proud.

And I’m old-fashioned. I like in-person. I like being able to look at people in the eyes like their real eyes, not their Zoom eyes. Like we all operate much better when we can have this in-person conversation, and then we can always go back to Zoom. 


Amazing. The energy here is amazing as well. I have so much to dive into, but before we start that quickly, I want to talk about your book. I sadly couldn’t read it, but please tell us a bit about the book you wrote and why there’s an empathy problem.


Sure. So having worked in the tech space for 15 years at small companies, it was becoming increasingly clear to me that we as an industry were optimising for clicks and profit but not always optimising for human impact.

It was more like there was this constant search or there is this constant search. I don’t know if we can use the past tense here about scale efficiency, and to a large extent, efficiency means taking human out of the equation because the least efficient things that exist on this planet is the human being.

Robots and lines of codes, or technically if you do them well, are actually more efficient than us. I was getting into this environment where over and over again, I would see. Brilliant people and outstanding companies are objectively trying to improve the world. 

That made no sense from a human perspective in the long term. And so I, I’ve wrote a book which was about how to develop more corporate empathy, which is like basically the ability for a company to think about the impact that they have, not just on their users tomorrow, but in the long term, on their environment, on their different stakeholders.

Under the premise that if you wanna build a company, not for five, not for 10, not for 20 years, but for a hundred years, like the Japanese like to think about it like we’re building a company for the next 10 centuries. 

It’s wise to actually think about the long term impact you’re gonna have. It’s smart to involve the people you’re impacting in a lot of the decision-making thinking, and frankly, a sign of good leadership is to see around the corner and be really good at anticipating.

What is going to be the reaction of the people you’re impacting? You may decide to still go ahead, even if you don’t like the reaction, but at least you should know what is the reaction. And I have found myself too often looking at leaders that seem to have absolutely no clue about the impact that they were having on their different stakeholders.

And so that lack of empathy, I believe was just a problem and, to some extent still is.


Really interesting. I think we could make a whole other episode just about this conversation, but to tie it back, what do you as Techstars value in startups? Right. So in the past, it’s been mostly the last month I’ve been more and more interviewing ESG sustainable investors.

And this what you’re describing, it’s like actually the same side of the same coin, right? It’s not even the opposite side. What do you think about it? And how do you maybe adjust your business model over the last 15 years to check more for this human impact in the companies you invest in?


We think of ourselves as a universal investor, and what I mean by that is we believe that we need to be representative of the world out there.

So if we start with the composition of our portfolio, we try to make sure that there is a good representation from a gender perspective, from a race perspective, from an age perspective, et cetera. 

And we do that because this is good business. Being a good investor is finding untapped potential investing and supporting these entrepreneurs and helping them be successful.

And so we look, last year and this year, 25% of the companies we invested in were led or co-led by a woman, which is unheard of in the industry. We have invested in more black and Latino founders than anyone else in the industry. And so we think that it is just great investment business to be this universal investor.

And then we spend a lot of time thinking about the big problems because again, as an investor, a big problem usually means big money. And when you think about the biggest problem, that exists right now; climate change sustainability is pretty much on top of the list. And so when we invest and we have 700 companies out of the 3,300, which are focused on sustainability.

It is not because we are an ESG investor, it is because we’re an investor that looks for big opportunities, and I don’t think there is a lot bigger than solving desalinization, deforestation, and sustainable agriculture problem than that. 

So we do a lot of that. And then the last thing I would say is we believe that a lot of the ESG norms are actually good for building a healthy, sustainable businesses in the long.


I hear more and more that now sustainability’s actually a cost saver in many things.

Talking about the circular economy, for example, right? When recycling things, you don’t have to import transport for long distances. You talked about the long-term impact. How do you as us think about investment horizon?


So we invest so early on, like a lot of our companies are like two people and a dog. And so when they come to us, it’s like almost as early as you can get.

It’s not like inception, but close enough. So we have a very long-term view like a lot of our companies are not gonna go through any major liquidity events for 6, 7, 10 years, and so we are in there for the long term. 

We’re just there to invest early and then support them on their journey to becoming massively impactful companies.


So you don’t have the usual, okay, I need to, in terms of liquidity event, I need an exit over a secondary, for example. Like that. You stay until the company is sold or goes public.


We stay until we believe that we can’t bring value anymore. And so it is very different for every company. I would just say usually the constraint that an investor has is that they have a timeframe that their own investors are expecting to get money.

And because they’re so concentrated in their portfolio, they will invest in a dozen companies, like maybe 25 companies. And so suddenly it puts a lot of pressure on these 12 to 20 companies to at some point generate some kind of liquidity because the investors are expecting some liquidity. 

We don’t have the same challenge because, in a given fund, there are hundreds of companies. So if your company for a different reason is not gonna have any illiquidity events in the next two years, you know what? That’s totally fine because there’s probably gonna be a dozen, which are part of the same fund who are going to go through that. And so we’re a very non-traditional investor.


What does your investment process look like? Finding investors is a bit like a marriage, right?


So you already, for the long term, some VCs they have like, they already look at the clock. Second, they assign the deal because they need to return the money in six or seven years. So that’s like, Definitely marriage with like a signed with kinda signed breakup point in the future. But you think about this really, really long term, right?

So I imagine you put a lot of effort into selecting the right portfolio companies, and I just wonder what are like the typical marks that you, where you say, okay, this is a company we wanna support. Cause you’re not only giving money, but you’re also like giving resources, you’re giving connections, you’re giving so many things to a founder.


What do they have to bring to the table to be investible?


It varies, and I wish, you know, there was a checklist and I could tell to people who listen to this podcast, like, if you, if you tick these five boxes, that’s it. Like you an entrepreneur for texts come. It’s unfortunately, or fortunately, because humans are complex, it’s a little more complicated than that.

To a large extent, we look at some of the same signals that traditional VC looks for. So is the market that this company is trying to address is the problem that this company is trying to address big enough? Like is there going to be a sizeable business at the end of the day once they’ve spent 10 years of their life building their business?

We look at the founders themself, like are they, we call them unstoppable founders. Like when we look at them, do we believe. That they are going to be able to go through the rollercoaster that an entrepreneurial journey is. 

And, and I mentioned it earlier, I’ve been a founder three times and that’s the reason why I’m not a founder of Force Time, cuz I know, like I know what it is, like where you feel like, You’re on top of the world at one moment, and then the next you feel like your company is gonna go bankrupt.

And sometimes this happens on the same day. And so it is just, you have to be almost delusional to be an entrepreneur and be really like, no matter what happened, I’m gonna go through and I’m gonna work hard and I’m gonna make it happen. So we look a lot at that. 

We also look at, can we teach them something like we, you, you mentioned it earlier, like there is the money part.

I think money is important, and whoever tells you that they’re just gonna give you advice like that’s not good enough. And yet, money is also not enough when you invest in such early-stage company. So we look at founders through the lens of you’re gonna give us three months of your life, plus we are gonna be on your cap table for a long time.

Like, Do you actually need us? Like are you gonna find at the end of the day that this was a good deal for you? Because it’s, it’s a long-term, it’s a long-term marriage, and if at some point the founder is like, why have I accepted that deal? We already lost. Like, it’s just, it’s not what we want.

So we spend a lot of time in what we call human due diligence, where we, we, we sit with the founders in person, again, back to old-fashion. Let’s be in person. We spend time and, and it is very common for us to say to a founder, you know, you’re so advanced already that you probably don’t need us. Like, you’re already well on your way.

You have a great monetization model. You’ve already made a lot of revenue. Two years from now coming to us and be like, you screw me. I actually never would’ve accepted this deal. We want you to come back two years, 10 years from now and be like, that was the best experience of my life and you guys changed the trajectory of my business and I’m successful because you were by my side.

We want you to come back two years, 10 years from now and be like, that was the best experience of my life and you guys changed the trajectory of my business and I’m successful because you were by my side.


And what does a typical founding team go through at Techstars? What does the program look like? What do founders learn and how do they?


So every founder is different. Basically, assessing the toolkit that they have and identifying what the tools that they’re missing are. Some of them are brilliant at products and struggling with them. Basic team management. 

Some of them are okay with the product and team management. They have a decently good team, but they haven’t figured out their go-to-market strategy and are struggling to get customers.

And we look at it, and we think, we believe that your product is great. You haven’t figured out how to market it properly. Some of them have never actually read a cash flow in the balance sheet and have no experience in going fundraising, and so it’s teaching them how do you fundraise?

And so it really varies. The reason why we are so hands-on during this three months Bootcamp is that we wanna make sure that you as a founder, receive exactly the customized solution you need.

We also try to be practical, like you can find a ton of content on the internet if you actually wanna read, but the internet is not gonna teach you to look at your balance sheet.

And so what we try to do is like this really hands-on support and that’s the reason why the classes that we have are small. It’s like 10 to 15 companies, and it will likely continue to grow. I think we can, we can manage bigger classes. The core premise is you are the customer. Like you come to us, and you pay us by giving us a share in your company.

We need to ensure that you get the best hands-on support we can give you during that program. 


That sounds like a lot of work. Yes. How do you make those decisions in which companies to invest at this stage? 


So we have a hybrid investment model. We have a central team that is looking at markets, geography, industry trends, looking at basically some data points us to say, okay, that’s interesting. Like we wanna do more of that, less of that. And then, we have local teams which are running the programs and doing a lot of the sourcing.

On the ground and a lot of the due diligence, and that’s the combination of the two that allows us to boost scale and keep the quality where it needs to be. Frankly, again, we’re an investment business, and we need to provide a return to our LPs, and so that’s the way we’ve managed to do it. There’s a bit of secret sauce, but not a crazy amount.


You have your LPs, you have at one point, you should return the money to your LPs, but they also, because they know if it’s founders that went through the program, they know your investment size. So they are not like, When do I get my 5 million back? 


Whoever gives you money at some point wants to know when you’re gonna give it back to them, but are you gonna give them more than what they give you?

So they will do, but the core of the Techstars model is this hyper diversification, which means that. And, and so they know that liquidity happens on a regular basis and they don’t have to have concerns specifically around that, but they always ask, when do I get my money back?


And how do you usually approach VCs? 


So, a lot of our LPs go on to make an investment in the companies that we invest in. It is not strictly defined as co-investment because that may be a completely separate conversation, but we try to do what’s best for the founder, which is we are not gonna lead around after you graduate. We will be making some full-on investments, but you’re still going to need to find a lead investor.

Many of our LPs actually end up mentoring the companies we invest in. Like it’s great. Like we want them to invest. And so it’s not co-investment in the strict sense of it.


Yeah. Not in the deal terms that exactly. But they invest with you into startups after demo day, I guess.


Exactly. And we are looking more and more. Actual co-investment in S P V is still very early, so maybe you and I will have to talk in some time and have some more news on that.


What would you do wanna tell, like to any kind of founder out there to get them started? Maybe they give them the last push to become a founder entrepreneur?


I would tell them two things.

I don’t know if you’re gonna like any of those. The first one will be hard, and it’s hard to be an entrepreneur. It is even harder to be an entrepreneur if you’re part of a minority or underrepresented group in tech. 

And I think we need not to sugarcoat it. I start most of my conversations with founders.

No matter their background how many years of your life are you ready to give to this company of yours? Because if you tell me two to five years, you know what, that’s probably not a good investment for us because, again, as an entrepreneur myself, building a successful company takes, on average, 10 years.

And you have to get up every morning and want to do that for 10 years of your life. And then if you don’t fit the mould like you’re different, you’re a woman, you’re black founders, you come from a very underprivileged background. You were born in a city that no one had heard of.

Like it’s just gonna increase this difficulty. So I tell them now, and then the second thing I tell them is, If you still wanna do it, come and apply to Techstars. We’re gonna help you.

Sorry, shameless advertising…


The other thing I wanna ask on behalf of our listeners I wanna be an investor of Techstars or maybe another pre-seed fund. What would you tell people who wanna be an investor?


Okay, so let’s start with the first one. I think there is a glamorous veneer that has been put in front of a lot of young people regarding VC as they imagine. Here I’m gonna find the next Airbnb, and I’m gonna be very rich, and I’ll go from one networking event to another networking event.

I see that a lot because. When we send our deal flow, we sometimes hear people say, your deal flow is massive, so you expect me to look through every company and their pitch deck, like, can you not do it for me? And I’m like, but isn’t your job to customize it a little bit because obviously, if you invest only in b2b, we’re not gonna send you a B2C company.

But like after that, like, we believe in this company. That’s the reason why we invested in, like there’s a lot of like grant work that needs to be done that is not glamorous, that is in front of your laptop. Like doing research that is Yes, at networking events, but mostly to gather knowledge about the industry.

Do like in-depth research into potential deals and bring in due diligence consultants. And so the first thing I ask young people is that why do you wanna be an investor? Because there is a fair amount of non-glamorous work that you need to be comfortable with. Otherwise, you’re gonna hate your job.

And by the way, you also need to be comfortable with the fact that like an entrepreneur, you are not gonna make money for a really long time because you are actually gonna make money, not with your management fees, but with your realized return and your realized return. 

Depending on what stage you invest in, gonna take some time, and on top of that, you will get your return once your LP get its return.

Then on the second part of the question around, okay, now you’ve decided you really wanna be an investor and, and you love the glamorous part and the non-glamorous part, what’s the best way to go at?

There are different paths, and I think that what’s fascinating about investors is that the good ones come from all kinds of backgrounds. You can go and apply to some of these VC firms as an analyst, and you. 

The groundwork, the non-glamorous work that I was talking about, and then step by step, go up the ladder.

You can, if you don’t have the right pedigree, because let’s be very clear, that’s probably for another podcast, but the VC industry is not very diverse and they tend to. Recruit people who look like them, think like them and came from the same background. There are exceptions out there. There are people who make efforts, but generally, so if you don’t come from the same background, things that I’ve seen working decently well, are people going and becoming.


Just thinking about the 20-minute VC founder who also started the podcast to get his deal flow right. So yes, may. Thank you so much. It’s been amazing. It’s fairly late. We’ve been at this day a long time as you can hear around us as people wanna leave. So I’ll leave you for your evening. Thank you so much for taking the time.

Profile picture
About the author


The Wall Street Lab Podcast

Welcome to the Wall Street Lab!

The Wall Street Lab is the podcast that explores the world of finance from an insider’s perspective. Hosted by-weekly by Andreas von Hirschhausen, CFA, you’ll get perspectives from some of the most renowned professionals in the world of M&A, Venture Capital, Private Equity, and Asset Management.

The Wall Street Lab is the partner podcast of Fintalent.io.