Boston Herald

By Donna Goodison 

TechStars is now a more enriching experience for start-ups.

The 14-week accelerator and seed-stage investment program will start offering each participating company an additional $100,000 in funding in the form of a convertible debt note. That’s on top of the $18,000 that TechStars gives to each company in return for a 6 percent equity stake.

The new funding will come from $24 million contributed by venture capital firms, TechStars alumni and private individuals. A convertible debt note converts to company stock at a later date.

“If you get into TechStars, it means that you immediately have the backing of a very broad venture community,” said David Cohen, founder and CEO. “In Boston, there are a large number of seed venture funds and individual angels that back TechStars, and this just extends that.”

The VC firms contributing the money are Newton-based SoftBank Capital, DFJ Mercury, Foundry Group, IA Ventures, Right Side Capital Management, Silicon Valley Bank, RRE Ventures and Avalon Ventures, which has a Cambridge office.

The additional funding will allow TechStars companies to focus on making progress with their products or services instead of spending time on early fund-raising, according to Cohen.

He also expects to attract a broader range of start-ups to TechStars, which provides free office space and mentoring at its programs in Cambridge, Boulder, New York City and Seattle.

“It’s obviously a lot more attractive because it’s more money upfront as soon as you get into the program,” Cohen said. “I think it will also attract entrepreneurs at a different stage of their life,” including those with a family and a mortgage.

The funding also will be offered to the 10 start-ups accepted into the inaugural TechStars Cloud, a new accelerator for companies working exclusively on cloud computing, cloud infrastructure and OpenStack. That program will run from January to April in San Antonio, Texas.