To Accelerate or Not to Accelerate (Part 2)

Posted: August 20, 2012 in Uncategorized
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In Part 1 last week, I talked about the benefits of Accelerators.  These programs emerged approximately 6 years ago and recently have been the rage with new ones popping up every week. Like every concept, that comes and goes, there are benefits and costs.  A dozen years ago private incubators were the rage, but today they barely exist.

If an accelerator is the right fit for your company and your vision, don’t be overcome with the glamour, glitz, demo days and launch parties.  It’s hard work to launch a business … any business! And that can’t be forgotten.  With that said, let’s see if an accelerator is the best move for your start-up.  Here are a few things to consider:

  • Commitment: Founders have to look inward to determine if they are committed to success after the launch.  One criticism I recently heard from a high-profile venture capitalist is that “Entrepreneurship is fashionable today”.  The true measure of success is would these founders and companies launch if it were not in fashion?  Disrupting an industry with innovation is more than a 3-month exercise.  Will you still be driving as hard after the launch and graduation?
  • Sacrifice: Accelerators typically are full of young entrepreneurs and founders.  I have met many founders who have left college to join private accelerators with the thinking that they can return if it doesn’t work out. I am personally not a believer in this because I think it’s difficult to restart school. You need to establish metrics to determine how long you will give the enterprise and what is needed to succeed to the next level. Write it down and adhere to it.
  • Selection: As I said, accelerators are becoming ubiquitous in the startup community.  Don’t apply to the first one.  Research each one, go behind their public profiles.  How have their graduates done? Not just in raising capital, but in building businesses.  Also research how their companies have fared in fundraising and from whom and with which venture funds do they have active and close relationships.  And most importantly, have any of their graduates exited?
  • Continuity:  Determine if the accelerator has a program for the alumni companies.  After the 3-month program, will you still have access to resources, meetings, events, and contacts? Or, are you on your own?  This is important as it is the power of the whole that drives the power of each. And lastly, assess the continuity of the accelerator.  Will it be around for more than one program?
  • No Free Lunch: Remember accelerator programs are not typically “free”. Each company can give up 3% to 6% of their equity to be in a private accelerator program.  This equity can be quite expensive or inexpensive based on how much value the accelerator provides.  You must think carefully if it is worth it and if you are committed to make it work.  If so, take full advantage of the program’s benefits.

Remember, there’s nothing wrong with going at it the old fashion way … launching your venture-hard work, basement, garages, sweat equity, attending venture fairs and seeking investors one on one. Accelerators offer clear benefits, but make sure they fit your ultimate business plan.


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