If you’re an entrepreneur who has been surfing for alternative ways to obtain your business idea off the ground, there’s a good chance you’ve heard of startup accelerators. Like many facets of startup culture, however, it’s sometimes hard to separate the myths in the reality. Could they be sleepaway camps with millionaire counselors? Contests? Are they exactly the same thing as business incubators?
Below, we’ll try to demystify this relatively recent phenomenon and explore the circumstances under which you might like to join one … or avoid one.
What Is really a Startup Accelerator Program?
Startup accelerator programs are offered by an organization, often a non-profit, to help obtain a startup off the floor. Edge in the game by combining aspects of education, group collaboration, mentorship, and financing. Accelerator programs possess a fixed term, similar to a college semester or two, where founders heavily immerse themselves inside a process of rapid business/concept development alongside a cohort of other entrepreneurs. After which, they’ll demo their service or product.
While startup accelerators don't guarantee it, they do supply the opportunity for participants to solicit seed money from vc's who sponsor or take part in this program. Participants will also have access to seminars, advisors, and other participants in their cohort, which give a high-intensity educational environment.
Startup Accelerators VS Incubators
You will sometimes hear the phrases “startup accelerator” and “startup incubator” used interchangeably, but they're, actually, not the same thing — even if they share several traits in keeping.
Where an accelerator is a short, intense program that leverages educational and financial resources within a cohort-style environment to jumpstart a company idea, incubators provide a longterm environment in which a business can be cultivated inside a dedicated space, sometimes combined with supportive on-site services. Having said that, they’re not really educational environments: You won’t have tons of seminars happening around you, for instance.
A business will only be by having an accelerator for some months, and an incubator is more open-ended. A company may stay in an incubator for a long time. Incubators might be offered as a nonprofit or economic development agency service, using the company renting a portion of the physical incubator space because of its operations.
Finally, there’s the matter of investment. Startup accelerators give a formal chance of participants to pitch investors for seed money. Investment doesn’t usually factor into the operations of the incubator, although you could of course seek those opportunities by yourself.
Why You Might Want To Make use of a Startup Accelerator
So why will you want to work with a startup accelerator?
1) You Want To Dedicate Yourself Completely For your Business
Accelerators are intense environments made to be completely immersive. If you’re admitted to a program, you’ll be around other like-minded folks. You’ll eat, breathe, sleep startup culture for the duration of this program.
If you’ve had trouble dedicating you to ultimately your entrepreneurial pursuits, an accelerator will all but make you provide 100%. It’ll become your lifestyle for a few months.
2) You’re Having problems Meeting The Right People
Not every entrepreneur has got the benefit of starting off having a contact list filled with power players. Accelerators can serve as icebreakers between entrepreneurs who might not have met under normal circumstances.
This can be particularly helpful where investors are concerned. You have an opportunity to pitch your idea to them as part of the program.
3) You need to Learn
Cohort-style learning is a touch different than whatever you decide and have experienced in high school or even college. While you will see seminars and lectures to go to, a lot of the learning process is peer-driven, with every participant getting the bits of knowledge they’ve acquired in their lives. You’ll advise, and as a result be advised, by the other participants.
And it’s a powerful educational environment. Accelerators aim to condense many years of education into less than half-a-year.
Why You Don’t Wish to Work With A Startup Accelerator
Startup accelerators aren’t for everyone. Whether due to your life circumstances, experiences, or business concept, you may be best having a different technique for launching your company. Here are a few of these reasons.
1) You Can’t Put Your Life On Hold For Months
Startup accelerators demand a large amount of their participants. You may be likely to temporarily move to another city and spend most of your waking hours caring for your business idea or attending seminars.
As you might imagine, it isn't really a great fit for entrepreneurs with families, second jobs. or any other serious demands on their time.
2) Your Concept Isn’t A great Fit For The Program
Each startup accelerator program has a tendency to have guidelines for the types of business they support. Some will have a theme for every cohort. In case your business idea doesn’t fit the criteria, then chances are you won’t allow it to be passed the application process.
Additionally, you’ll be anticipated to have an idea conducive to rapid growth, one that is friendly to the venture capital model of investment. Should you aren’t thinking in terms of exit strategies and IPOs, an accelerator probably isn’t for you personally.
3) You Want To Retain All your Equity
Venture capital is an important part from the accelerator model, so that means your ultimate goal moving in ought to be to sell your idea to investors. While you probably know, venture capitalists expect a stake inside your company in exchange for their cash. Should you aren’t comfortable with investors asserting control button over your company, you probably need another thing.
Is An Accelerator The Right Way To Start Your Business?
To summarize, an accelerator is a great fit for entrepreneurs seeking to develop a business idea for investment capital investment, and who have the time and mindset to totally immerse themselves inside a high-intensity for 3 to 6 months. If you’re the kind of person who thrives in atypical, high-stress environments and are some autodidact, you can find a lot of out an accelerator program.
On the other hand, if you’re looking to slowly grow a company that you retain longterm control over, or if you have to split your time between your business enterprise and other responsibilities, an accelerator simply won’t cash to offer you.
How To Find & Apply For The best Startup Accelerator
Startup accelerators have become increasingly common since Y Combinator, often credited because the first of this category, arrived on the scene in 2005. Finding them, however, can be surprisingly tricky should you don’t know their names and associated websites. These programs in many cases are associated with their region’s investor community, so you can sometimes find them in the same places that you’d search for investors, on sites like AngelList. Your local world of business and regional trade events can also be good places to obtain a sense of what programs can be found in your region. Keep in mind, however, the accelerator program you've always dreamt of might not be located in your region whatsoever. You are able to affect Y Combinator throughout the nation, for example. You just need to be willing capable to live in the Bay Area for a few months (although: During the COVID-19 pandemic, it’s currently functioning remotely).
Here are some general guidelines for what to do when you’re applying:
- Find an accelerator program that serves your industry (tech, finance, etc.): Not all programs are particular, but make certain your idea fits their profile. Most will give you a detailed map of the application process. These processes can vary greatly between programs.
- Expect fierce competition: Because they’re cohort-based, accelerators have limited slots for every “class” that attends. Think about how to stick out and don’t be shocked should you don’t result in the cut in your try.
- Be in a position to pitch your business: You should know your company idea inside and outside and be able to confidently pitch your idea to program runners.
- Be honest about what you aspire to get out of the program: Remember that accelerators are, among other things, educational programs. Don’t be afraid to say that which you don’t know, where you’re having problems, and just what you hope to remove in terms of knowledge.
- Know what you could contribute: Remember, you’ll also be a resource of information for the cohort. What kinds of knowledge and resources would you provide?
Learn About Other Resources For Entrepreneurs
Startup accelerators are simply one resource available to entrepreneurs. If you’re not ready to pack up your life and dedicate yourself to your business idea for some months, don’t feel below par. There are plenty of other approaches you can take.
Check out our resources on:
- 6 Financing Options For Rising Entrepreneurs
- What Is Venture Capital?
- What Is definitely an Angel Investor?
