For new startups, oftentimes the most difficult part is getting to Seed or Series A funding. To get over this hump, startups may turn to an accelerator program to help jumpstart their growth. But with so many different programs to pick from these days, how do they choose?
What is an Accelerator?
A startup accelerator is a program that aims to help entrepreneurs jumpstart their growth. Typically, accelerator programs last for a short period of time, ranging from three to four months. In addition to mentorship, accelerators usually offer participating startups some amount of capital in exchange for an equity stake in the business.
The main goal of a startup accelerator is to get startups to a level at which they will be able to go out and raise more money. This means helping businesses grow in size and valuation as quickly as possible. To achieve this, participants can expect to engage in classes and seminars, work with mentors, and even pitch to venture capitalists and angel investors at a local Demo Day.
What are the Benefits of an Accelerator?
Accelerator programs can offer substantial benefits for a young company looking to grow quickly, including access to experienced mentors, new connections, intros to potential investors, business advice, and more. But, not every accelerator is the same, and not every accelerator is suited to every business. In order to get the most out of the experience, choosing the right accelerator is essential.
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How Do I Pick an Accelerator?
There are a lot of accelerator programs out there, which can make picking a starting point a little daunting. To begin, consider what you want to get out of the experience, aside from the obvious potential for rapid growth. To narrow down your choices and help make a more informed decision, we recommend beginning by answering these questions:
- What kind of environment do you and your team thrive in?
- Is relocation something you’re open to, or even possible for your team?
- How much of a program workload will you be able to handle while also managing your day to day business?
- Financially, how much of an equity stake are you willing to part with?
When looking at programs individually, think about the following:
- What other companies have gone through this program? Have they been successful?
- What is the culture like and how do they describe their principles and values?
- Is the management team’s experience relevant to your business, and is it likely they will have connections you could benefit from?
- How is the curriculum structured?
- How is success measured?
Seeing how the program describes itself is useful, but you may get a better sense of what to expect on the ground by reaching out to alumni for their take. Did they have a positive experience, and is the program something they would do again? If not, why?
Getting Accepted into an Accelerator Program
After you’ve narrowed down the accelerator programs that seem to be best suited towards your business needs and goals, you’ve got to make it through the application process, which can be highly competitive.
Accelerator programs can be very selective, with some only accepting between 1% and 3% of applicants per class. Like an investor, an accelerator program isn’t just looking for a cool business idea, they’re looking for businesses who have the whole package.
To increase your chances of making it in, most accelerator programs will want to see the following:
- An interesting market niche or unique business model
- A solid founding team
- Some amount of funding
- Good referrals
Of course, you want to sell yourself, but an accelerator that really believes in your potential will also want to sell itself to you. With that in mind, you should feel free to ask questions of the program you’re accepted into. A few insightful ones are:
- Why are you interested in my startup?
- What is unique about your ecosystem?
- Do you have partnerships with potential customers?
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They Can Be Helpful, But Not for Everyone
Whatever you’re looking for, there is almost certainly an accelerator program out there that will suit your startup. Of course, accelerators aren’t for everyone, and they certainly aren’t essential to achieve rapid growth. That said, when chosen wisely, an accelerator program can make for an indispensable growth partner for your business.