The ABCs of startup accelerators

The ABCs of startup accelerators

Every founder’s goal is to build and grow a successful business as quickly and efficiently as possible.

One way to do that is to join an accelerator. But what exactly does that entail? And how do you know if it’s the right path for you?

We’ve put together the “ABCs of accelerators” to help you decide.

A is for Accelerator

An accelerator is like bootcamp for your business.

These intense, 3-month programmes give you everything you need to turn a product or prototype into a booming business. Those invited to join exchange equity for access to mentors, workshops, and tools. The process ends with a “demo day” – a chance to win over potential investors and wow the press.

Think of it like traditional fundraising but with the added benefit of intensive coaching.

Incubators offer a similar experience, but there are a few key differences. Although founders also give up equity, incubators have a longer lifecycle. They also focus on refining inspired ideas rather than accelerating product development.

Now that you know what an accelerator it’s, we can explore the benefits and challenges they offer.

B is for Business Benefit

Accelerators can:

Teach you how to build your business
Elite accelerators equip you with everything you need to build a business. That’s particularly helpful if you’re a first-time founder.

Help you build a network – quickly
Accelerators give you access to experienced entrepreneurs, allowing you to build a knowledge network very quickly.

Connect you with a community of founders
Accelerators are selective, so if you make the grade, you know you’re in good company. Your peers are a precious resource.

C is for Challenges

Accelerators offer founders a number of advantages, but there are also challenges to consider.

Firstly, they take you away from other important business-building work like hiring, marketing and sales. Some accelerators even expect you to temporarily relocate (although many now have virtual offerings).

Remember, not all accelerators are equal. There are hundreds of accelerator programs across the United Kingdom, and thousands globally. They all differ in terms of their approach, focus, cost, and effectiveness. Top programs may boast a large roster of well-known graduates, but the number of successful exits and amounts raised tend to drop off rapidly.

It all boils down to the expertise you get in exchange for your equity and energy.

Is an accelerator the answer for my business?

Your size, circumstances and challenges are important factors when deciding if an accelerator is right for you.

Your company may not be at the right stage. Too early and you won’t be interviewed, as accelerators generally look for a product with some traction. The timing might not be right if you’ve already raised VC money either.

There’s also the pressure that comes with being part of an accelerator programme. Graduates are expected to raise within weeks, and there are negative perceptions if you don’t. And don’t forget that your founding team may already have the experience and knowledge you need to succeed.
Then there’s the question of choice.

The best accelerators are now competing with programs from some of the UK’s top universities and large corporations. There are also specialist incubators that may make sense if you focus on a specific vertical, and strong regional accelerators that may be easier to attend.

The verdict

Accelerators offer access to the guidance, tools and network you need to build your business at scale. But that expertise comes with a price: you will have to give up your valuable time, and equity.

It’s worth chatting to recent alumni of accelerators that interest you. Ask about the atmosphere, and what they got out of the program.

Still interested? Ask your founding team these 3 final questions:

• Are we at the right stage of our fundraising journey?
• Are we willing to give up a piece of our company?
• Are we sure we’ll get the support and insight we need?