Five things to consider when selecting an accelerator

Five things to consider when selecting an accelerator

When you are starting out and need assistance, selecting who will assist you with your venture is important. Although money is usually the leading factor that many use when selecting an accelerator. Actually, it does not make the list of the top five. Here is what does.

Are they knowledgeable about your industry?

Accelerators are typically made up of a variety of people in different roles who come from a variety of industries. In some cases, these are outside consultants or advisors the accelerator knows. In other cases, these are people intimately involved with the accelerator. Either way, you should research the accelerator to see what actual experience an accelerator has and try to speak to the person who will most likely be assigned to your company. Often, you will have a strong business team assist you, but the industry specialists come in for only short visits or to watch pitches and give minutes of feedback.

Do they have experience with companies at your stage?

Many accelerators are selective about who they work with. This is not a bad thing. Having an accelerator who specializes in the Cannabis industry or clean energy can work to your advantage if those are your industries, but just applying to an accelerator because you heard they were good is not likely to prove successful.  Additionally, some accelerators excel for businesses at different stages. Be sure to understand what stage you are at and research of the accelerator accepts and works with companies at that stage.  Part of the reason some accelerators are overwhelmed with applications is because the applicants do not do the leg work and it can reflect poorly on your venture if you are one of those applicants.

Are their relationships of value to you?

Relationships forged by accelerators are key to their value.  Relationships come in all forms and may be geographically restrictive, financially dependent and resource limited making n accelerator with a big network appear valuable but turn out to be useless. Check to see if that accelerator works with companies in your city, state, or county and if the types of relationships they offer are the ones you think you need. There is nothing like working with an accelerator only to find out all their resources cannot help you because you are not near them. Often qualifying this information can be problematic and will require a conversation with a key member of the accelerator since most do not publish their details of their relationships.

What types of assistance do they offer?

Money is often what draws a startup to look at an accelerator, but the other services and assistance they offer can be worth far more than the cash.  Often an accelerator has a larger network of investors who can fund you better than the accelerator so look for success stories.  Many accelerators do not bring more than business plan, pitch, and a few investors to the table which is fine, play to your strengths, but other services like sales teams, business development opportunities, compliant and legal assistance, technology advice and operating expertise can prove more valuable.  If you are a true startup, you probably need it all, but determine which is priority. If you are working a full-time job, it may be better to focus on non-monetary assistance and keep working until you are at the point where you have the funding to quit your job.

What do they ask for in return?

Accelerators ask for a wide variety of things in return for their assistance. Some are based on pure investment into your company, but many are not. They can range from simple stock, typically Preferred class, to a seat on the Board plus monthly fees or a combination of both.  When deciding whether their ask is just, you need to understand where you are and what you can or cannot offer. This can cause quite a conundrum since the whole reason you go to an accelerator is to get help to understand this in the first place.  This often leads to startups getting taken advantage of or at least feeling like they did which immediately starts things off on the wrong foot.

When you are starting out and need assistance, selecting who will assist you with your venture is important. Although money is usually the leading factor that many use when selecting an accelerator. Actually, it does not make the list of the top five. Here is what does.

Are they knowledgeable about your industry?

Accelerators are typically made up of a variety of people in different roles who come from a variety of industries. In some cases, these are outside consultants or advisors the accelerator knows. In other cases, these are people intimately involved with the accelerator. Either way, you should research the accelerator to see what actual experience an accelerator has and try to speak to the person who will most likely be assigned to your company. Often, you will have a strong business team assist you, but the industry specialists come in for only short visits or to watch pitches and give minutes of feedback.

Do they have experience with companies at your stage?

Many accelerators are selective about who they work with. This is not a bad thing. Having an accelerator who specializes in the Cannabis industry or clean energy can work to your advantage if those are your industries, but just applying to an accelerator because you heard they were good is not likely to prove successful.  Additionally, some accelerators excel for businesses at different stages. Be sure to understand what stage you are at and research of the accelerator accepts and works with companies at that stage.  Part of the reason some accelerators are overwhelmed with applications is because the applicants do not do the leg work and it can reflect poorly on your venture if you are one of those applicants.

Are their relationships of value to you?

Relationships forged by accelerators are key to their value.  Relationships come in all forms and may be geographically restrictive, financially dependent and resource limited making n accelerator with a big network appear valuable but turn out to be useless. Check to see if that accelerator works with companies in your city, state, or county and if the types of relationships they offer are the ones you think you need. There is nothing like working with an accelerator only to find out all their resources cannot help you because you are not near them. Often qualifying this information can be problematic and will require a conversation with a key member of the accelerator since most do not publish their details of their relationships.

What types of assistance do they offer?

Money is often what draws a startup to look at an accelerator, but the other services and assistance they offer can be worth far more than the cash.  Often an accelerator has a larger network of investors who can fund you better than the accelerator so look for success stories.  Many accelerators do not bring more than business plan, pitch, and a few investors to the table which is fine, play to your strengths, but other services like sales teams, business development opportunities, compliant and legal assistance, technology advice and operating expertise can prove more valuable.  If you are a true startup, you probably need it all, but determine which is priority. If you are working a full-time job, it may be better to focus on non-monetary assistance and keep working until you are at the point where you have the funding to quit your job.

What do they ask for in return?

Accelerators ask for a wide variety of things in return for their assistance. Some are based on pure investment into your company, but many are not. They can range from simple stock, typically Preferred class, to a seat on the Board plus monthly fees or a combination of both.  When deciding whether their ask is just, you need to understand where you are and what you can or cannot offer. This can cause quite a conundrum since the whole reason you go to an accelerator is to get help to understand this in the first place.  This often leads to startups getting taken advantage of or at least feeling like they did which immediately starts things off on the wrong foot.

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