Launching and running a startup is unquestionably difficult, and achieving rapid growth – or any growth at all – is challenging.
This is where accelerators come in and have the potential to add value to young companies. Designed to support early-stage startups, accelerators provide entrepreneurs with mentorship, resources and even funding in order to assist them in scaling operations quickly, effectively and successfully.
Accelerators have made a massive impact on the global startup environment, offering founders a fast track to success by means of connecting them with important and helpful networks and tools.
But, what exactly are accelerators, how do they work and what benefits do they offer to startups?
What Exactly Are Accelerators?
The term “accelerator” is thrown around a lot, but there’s a lot more to it than what many people think. An accelerator programme helps early-stage startups grow and succeed in a very specific timeframe, normally between three and six months.
Accelerators are focused on and geared towards working with startups that already have a minimum viable product (MVP) or at least some kind of validated business model. The purpose behind accelerators is to be able to help accelerate startups’ progress during a challenging and intense period which tends to culminate in a demo day during which the startup in question will present the business to potential investors.
The first ever accelerator was Y Combinator, a US-based tech startup accelerator that created the model and managed to successfully demonstrate its value and great potential. Since then, plenty more accelerators have emerged, helping to create a brand new generation of successful startups receiving great support.
How Does the Accelerator Process Work?
Accelerator programmes tend to be very selective, so they don’t admit just any businesses – they accept only a few applicants a year. Once startups have been accepted, they normally go on to join cohorts of other companies busy going through the same processes simultaneously.
This allows them to participate in events like mentoring sessions, workshops or a variety of other activities alongside other experienced and successful entrepreneurs, investors and experts in the relevant industry.
What Kind of Support Can Accelerators Offer Startups?
The idea of professional and business support can mean different things for different people and different types of companies, but generally speaking, there are a few key areas of support.
Funding
Nurturing a startup isn’t only about bringing in financial investment, but it certainy is a significant component that companies can’t be successful without.
Different accelerators provide startups with varied offerings, but it’s fairly common for there to be a s small initial investment in exchange for a little bit of equity.This inital capitla can be crucial in helping startups covering costs while they’re going through the programme as well as to fuel extended growth after they’ve completed the programme.
Mentorship
In terms of people, mentorship is a defining aspect of accelerator programmes. By means of structured sessions and informal guidance, mentors can help startups deal with complicated challnges while redefining their business strageies and avoiding common mistakes. Mentors can serve as an excellent sounding board.
Product Development and Market Validation
Mentorship is one massive bonus of participating in an accelerator progrmme, but the other significant perk is the conections you’re able to make within appropriate professional ntworks. It allows you to meet othr entrepreneurs, potential partners and even investors too.
The Product Development Process
Accelertors, especially mentors, are able to help guide startups through the product refinement and market testing phase which is norotiously difficicult. This will help them optimise their offerings and better understand target markets.
The Accelerator Process
The accelerator process may differ from one country or one industry to the next, but generally speaking, it follows the same lines.
- Startup Application and Selection: First things first, startups must apply to join an accelerator programme, and in doing so, they’re almost always competing with hundreds of other applicants. The actual selection process can be difficult, and it is all about prioritising a startup’s potential for rapid growth, the viability of the company’s product and the strength of its team.
- An Intensive Programme: Once certain startups have been accepted to the programme, they enter a process that normally lasts a few months. During this period, they refine their business models, test their products in real markets and gather as much feedback as possible. They’ll receive valuable guidance on various aspects of business depending on what they require, from sales to financial planning.
- Support and Mentorship: One of the most useful things accelerators provide startups with is a network of mentors and industry experts. Many accelerators connect startups with other successful entrepreneurs who have already been through it all and can offer them practical advice.
- Demo Day: At the end of the programme, startups are given the opportunity to present their business in a public environment that is called a “demo day”. Normally, if the demo day is run successfully, it’ll be attended by venture capitalists, angel investors and other types of potential backers which gives startups a valuable and exciting chance to secure investment and continue to grow.
Why Do Startups Join Accelerators?
Startups join accelerators for a range of reasons. For one, accelerators provide a concentrated dose of guidance, resources and exposure that would be difficult to achieve independently. Also, joining a reputable accelerator can increase a startup’s credibility, making it easier to attract investors, customers and skilled employees down the line.
Accelerators also offer a supportive peer environment in which founders can learn from each other’s experiences, share ideas and gain a sense of camaraderie during a challenging (albeit rewarding) process. The intense, immersive nature of the programme fosters rapid learning and development which is particularly beneficial for startups that need to establish themselves quickly in a competitive market.
Are Accelerators Right for Every Startup?
While accelerators offer significant benefits, that doesn’t neccessarily mean that they’re the right fit for every startup.
Startups that are not yet prepared to scale or are still figuring out their basic concept may find that an incubator or other forms of support are more appropriate. Additionally, some startups may be reluctant to give up equity in exchange for participation in an accelerator.
Thus, it all depends on the how far along the startup is, how much equity it’s willing to relinquish and more.
