Increase your startup’s chances of getting into an accelerator
The struggles every startup goes through can be significantly reduced if only the startup has some kind of support and help in the early stages of its development. There is a way a startup can get the much-needed help, and it comes in the shape of a startup accelerator. Here I bring the introduction to startup accelerators and will explain how you, as a startup founder, can significantly increase your chances of getting into one.
What is a startup accelerator?
A startup accelerator or also known as a seed accelerator is a fixed-term, cohort-based program that includes seed investment, connections, sales, mentorship, educational components and ends with a public pitch event to accelerate the growth of a startup (source: Wikipedia).
The startup accelerator is maybe the fastest way for a startup to gain initial capital and/or investors, along with mentoring programs and even help with office space and other necessary resources. The accelerator program is not long term, it is actually very short-term, usually three to four months, after which, the startup is ready to take on the world.
There is another type of company that helps startups through their development; that is the business incubator. The incubator offers a different type of support, similar, but not exactly like an accelerator. There is also a major difference in the benefits the startup will gain by joining an incubator or getting picked up by an accelerator.
How to get picked up by an accelerator?
If a startup intents to be picked up by a business accelerator, they will need to make some effort on their part. There are things that the founders or the people running the startup can do to increase their shot at becoming a part of an accelerator’s program.
Well, the obvious thing is to have a killer idea that is very promising, and have a sound business plan. Many startups fail even on this step, as they only think they have a good idea and a properly established plan, but instead, they have nothing solid under them. Advice: always do your homework and make decisions after thorough research. This way you are laying a solid foundation with bringing your startup into the real world.
To have a proper chance to be picked up by an accelerator, you need to have a professional team around you. All the dealings that revolve around a startup can’t be handled by only one person, as it takes several people to really get a hold on all things startup-related. So, before you even think about joining an accelerator, you need to find the best possible team that will share your idea and enthusiasm in getting the startup off the ground.
The next thing that needs to happen is for the founders to apply to the program. It is especially important to follow the programs and apply on time, as this is a competitive environment and many startups are fighting for only a few spots. Also, there is always the chance that some of the startups that will get accepted will drop out of the program (for various reasons) and you can even get a belated chance to join the startup accelerator, so follow the progress and don’t get disappointed easily.
Have a plan (in case you get picked up), so you will use the seed investment to the best of your advantage. Also, be sure to check the contracts before you sign anything, as the seed investment that a startup will get is done in exchange for equity. This means that even if the initial investment is a relatively sparse sum, it can mean a lot in the long run.
Startup benefits from an accelerator
There are several benefits for a startup to be a part of an accelerator. Here I’ll cover the major pros and cons that are related to being a part of a startup accelerator.
being a part of an accelerator, your startup has a real chance to get seed funding. This can be done during the duration of the program, or at the end, during the demo day, when your services/products will be presented to the public in an organized event. You will also get a chance to present a professional pitch to a group of investors.
Free office space
this is a nice feature most startup accelerators share, as it allows the participants to share office space and, by extension, share a lot of ideas and a network of people is created. This can have beneficial effects on the long run, as all the participants get to know each other and that can lead to a fruitful long-term collaboration. In the case of not sharing an office space, the participants in an accelerator usually hold regular meetings where knowledge and progress are shared.
being a part of an accelerator, the people in it get to meet a large network of professionals in different fields. Many times, representatives from successful startups that have previously used the accelerator to their advantage can be a part of it, offering first-hand advice and showing tips and tricks in overcoming basic problems.
the startup accelerator offers incredible chances for learning. The startup accelerator programs are usually held as 3-month long courses and that time is filled with mentors, advisors, educators, guest speakers, and professionals from various fields that contribute to the development of the startup.
the “final test” that a startup needs to pass as a part of an accelerator is the demo day, where they need to present their ideas, programs, products or services to a group of potential investors. This is not possible with any other program, as the investors that are involved with the accelerator are not easy to reach via other channels, and they also know what to expect and are prepared to invest their funds in the future of the startup.
from all the applicants, only a small percentage get in the program. When I say small, I mean 1-3% of all the applicants, and this is a highly competitive environment that can have a bitter taste and disappointment for some.
the accelerator program usually lasts only three months, and in that time, the participants are subjected to an intensive program of mentoring, training and having to attend many events. Usually, the participants are not given a chance to select the events but need to attend as many as possible.
Investment in return for equity
the investors that will make a commitment to your startup expect a percentage of the equity of your company. While this is fine in the short term, on a long-term, it can pose a problem, as you will be giving away a real percentage of your company, usually for a one-time investment. Plus, the investors are not required to keep a network relation with the startup on the long run, and this can wear off in a year or so, while you still have signed away a part of your company.
What we’ve learned
A startup accelerator is a great starting point for any startup, especially one based in the technology field. The basic idea behind an accelerator is to increase the startups’ chances of getting funding and offer proper education on this matter.
Being a part of an accelerator will grant you access to mentors, education, funding, fundraising, networking opportunities, and even free shared office space. Still, as a startup, you need to do several things that will increase your chances of getting into an accelerator. First, have a great business idea; next, assemble a great team; then apply to an accelerator and have patience. There are some cons, but the pros significantly outweigh them, especially in the early stages of the startup’s existence.