If you’re a startup founder, you likely have one thing on your mind: How do I build the best company possible?
There are many great strategies out there for building a company. Some startup founders self-fund until they make a profit, while others lean on their network to get initial angel or venture capital funding. But what if you don’t have enough money to self-fund or a network you can lean on?
That’s where accelerators come in! Accelerators make it easier for founders to get a jumpstart on their company’s success. However, accelerators are not necessarily the right choice or every company or every startup founder.
Read on to learn more about startup accelerator programs, and see if they’re right for you.
What is a startup accelerator?
There are a few different kinds of startup accelerator, but in general terms: startup accelerators are programs that give founders support in various ways (mentorship from industry leaders, direct capital investment, introductions to angel investors, etc). Usually, this is in exchange for equity, though some accelerators do have alternate models.
Many accelerators focus on early stage founders and companies, and there are both generalized and specialized accelerators. While many accelerators are geared towards tech startups, there are accelerators for things like CPG companies and even non-profits.
Why should a founder go through a startup accelerator program?
Generally, founders should go through an accelerator if:
- They feel the extra support the accelerator provides will help move their company forward
- They feel that they’re lacking in some area that the accelerator can be helpful with (network, capital, knowledge about running a company)
- They feel that whatever the accelerator is asking for in exchange for participation and resources is worth it
Are there any downsides to going through a startup accelerator program?
While startup accelerators can be incredibly valuable, not all accelerators are created equal. Some startup founders don’t find that the resources end up being worth whatever they had to give up in exchange - equity, time, etc. This may be because the accelerator is a weaker program in general, or it might mean that the company or founder wasn’t a great fit for the program that was provided.
What’s the best way to evaluate the quality of an accelerator?
When evaluating the quality of an accelerator, look through their website very carefully. Try to get a sense of the following:
- How long has the accelerator been around?
- What kinds of companies are alums of this accelerator?
- What resources do they provide? Do they match what you feel like you’re lacking?
After you’ve reviewed the website, do a quick Google search for the accelerator’s name to learn more about their reputation.
If you’re still unsure, the best way to get a sense of the program is to reach out to alumni. You should be able to find a list of them on any accelerator’s website (if you can’t, that’s a red flag - why wouldn’t they want to showcase their success stories?).
Something else to watch out for: most accelerator programs will never ask for a fee in exchange for their services. Equity is the most common ask in exchange for participation, though some accelerators don’t ask for anything besides time.
The reason accelerators mostly ask for equity is that it helps keep incentives aligned - if you do well, they do well. Asking for payment up front may be a sign that they won’t be particularly bought into your success, since they won’t get any additional upside if you exit in the future.
How do founders get into accelerator programs?
For most accelerators, there is a set application process. This will vary by accelerator. One of the more famous accelerators, Y Combinator, has the following process:
- Submit an application that includes profiles on the founders, questions about the business and a 1 minute video.
- A small percentage of applicants are given a 10 minute interview.
While most accelerators will make their process transparent, it can be hard to know exactly what they’re looking for when filling out their application. If they offer any kind of Q&A session, it can be helpful to attend to better understand their criteria.
What can a founder expect when going through an accelerator program?
Each accelerator has a different set up. They may be in-person, remote or hybrid. They may be a few weeks long, or they may be a year. You may work primarily with one mentor, or you may get a team of mentors.
Depending on the goals and set-up of the accelerator program, you may be coached on anything from building a product, finding product-market fit, operating a business or raising venture capital. You will also likely be given networking opportunities, as many accelerators host talks and other events.
The level of support may vary from accelerator to accelerator. Some may have mentors work directly with you on customer acquisition strategies or refining your pitch deck, whereas others may be more focused on peer support or group sessions.
Many accelerators have a showcase at the end of their program, commonly referred to as Demo Day. At a typical Demo Day (again, could be in person or remote) a founder will pitch their company to a set of potential investors and supporters. This is generally a great way to help founders transition from the program into the next phase of their company.
What is the best startup accelerator program?
As we’ve mentioned a few times in this article, accelerators are not a one-size-fits-all situation. Different accelerators have different terms, set-ups and resources available and you need to decide which is the best fit for you.
That being said, here are some well-known accelerators to help you kick off your search:
Y Combinator is generally regarded to be the first accelerator program ever created. They run batches twice a year, based in San Francisco. Each batch is a 3 month program, culminating in a Demo Day. They primarily invest in software and hardware companies, but are generally idea agnostic. Notable alums include DoorDash, Stripe and Instacart... and us, PropelAuth!
Techstars considers themselves the “world’s most active pre-seed investor.” They run a set of globally distributed programs, with locations from everywhere from New York City to London to Sydney. Some of their programs are idea agnostic, whereas others are more specialized. Notable alums include DigitalOcean, Alloy and SendBird.
Alchemist Accelerator is on the more specialized side - they focus on early stage startups that plan to monetize via enterprise sales. They offer an optional investment, mentorship and even co-working spaces in San Francisco and Mountain View, CA and Memphis, TN. Notable alums include Launch Darkly, AutoCloud and Privacera.
MassChallenge is a large, global network of accelerators, running programs in places like the United States, Israel, Mexico and Switzerland. Unlike some of the other accelerators on this list, they also have programs geared towards mid-to-late stage companies. Most of their programs are 3-4 months, and some offer specialized mentorship whereas others are more idea agnostic. While they don’t offer capital as part of their programs, participating does unlock opportunities to get non-dilutive funding. Notable alums include Bitso, Ginger (acquired by Headspace) and Hyliion.
AngelPad is an accelerator that purposefully stays small and exclusive. Every 6 months they choose around 15 companies and work very closely with them. Besides mentorship, they also offer $120k in funding. Notable alums include Postmates, Pipedrive and Iterable.
If you’re new to entrepreneurship, accelerators are a great way to get additional support and quickly build a network at the earliest stages of you company. There are a huge variety of accelerator programs out there, each one tailored for a specific type of founder and company. When making the decision about whether or not to apply for an accelerator, you should evaluate both the general quality of the accelerator, as well as whether it’s specifically a good fit for you.