Startup accelerators are a great way for your startup to gain traction, get capital and access clients. With more than 1000 startup accelerators to choose from, it’s important that you don’t just “spread and pray” your applications. You need to look into what really matters for your startup growth.
If you choose the right accelerator for your startup, there will be incremental growth over time and your business will benefit exponentially. Due to the high number of options in the market (industry-specific, corporate, equity-free, etc…) you need to evaluate correctly what is available. Too many founders have been burnt by the wrong decisions, missing on their startup dream, and you don’t want to join that crowd.
1. To Accelerate or Not To Accelerate
This is the first real question that you have to ask yourself. Why are you looking into the startup accelerator option? There can be several reasons, but you need to know what really matters to you. Understanding the underlying reasons for why joining a startup accelerator can be useful for the success of your company will define ultimately how you choose the right option for your startup.
Key questions to ask yourself are:
- Am I looking for money alone? If yes, are there alternatives?
- Can the startup accelerator give me access to additional VCs or increase my investors’ network?
- Will I get introductions to potential customers?
- How does the current startup community around that specific accelerator currently interact with each other and with the startup accelerator?
Start with these questions to define priorities.
2. A Startup Accelerator Is a Partner for Life
When thinking about choosing a startup accelerator you need to realize that this is a long-term partnership. What does this actually mean?
There’s a lot of research that goes into identifying and choosing the right startup accelerator for your startup. Probably the most important bit is to understand who you might end up doing business with.
Have you thought about interviewing the people behind the accelerators? Do the accelerator partners have relevant experience as entrepreneurs?
Remember that once you join a startup accelerator, you will be in the program for 3 to 6 months. The reality, however, is that the accelerator partners will be involved in every future step of your startup. Evaluate how they plan to make you spend your valuable time and what their values are. When I ran my own startup, the accelerator had actually a deceleration effect on my company growth due to the several ineffective seminars I was forced to attend.
Startup accelerators are investors by all means and they will have a voice in every important decision you will take in the first period.
3. Location, Location, Location
An old saying that is very true for the retailing industry, but also for startup accelerators. Don’t select startup accelerators based on the fact that they are in your backyard. Make a list of potential startup accelerators based on your real needs.
With the same logic, you need to consider the location of the startup accelerator you might be choosing as it might be limiting. At the time when I chose with my co-founder to join a program, we looked at one specific aspect, money (dumb move). That decision translated into our company to be set up in a growing market, but that didn’t fit our primary need for growth.
4. It’s All About Fit
Depending on your startup there are several points you need to consider when looking at fit.
Are you looking for a startup accelerator that is focused on the industry you are trying to tackle? Or perhaps do you need a program for startups that are not in a pre-seed stage? It’s crucial for you to think about those variable as these will affect the way the program is structured as well as the value you can gain out of it.
In order to understand how the accelerator’s values and activities are related to where your startup is, you need to do some real digging. Research among the alumni becomes very important to evaluate each statement the accelerator is making on their website. It’s crucial to evaluate also the level of mentors they attract (consider their background and the variety of mentors available).
5. Mentors That Matter
Due to a high number of startup accelerators available worldwide, it is inevitable that some will not be at the level they claim to be. As a rule of thumb, if an accelerator showcases an incredibly high number of mentors on their website, you might want to ask yourself, as well as to them, how frequent are the interactions with these people. Do they attend all the mentorship sessions or is it just a showcase of faces?
You will also want to keep an open mind when assessing the different mentors you interact with. It might be that a mentor you didn’t think as valuable, could actually be useful in taking some key decision for your startup growth. Failing at choosing the right mentor can also lead to a deceleration of your startup during the startup accelerator program.
6. Money Is Important, But Not Everything
When looking at joining a startup accelerator, you might consider the investment terms as a deciding factor. Unless you have access to one of the top startup accelerators, you might realize that smart money is something that doesn’t really exist in the accelerator world.
There are some top accelerators that offer equity-free/no-money programs, which at first might not seem like a good deal, but offer some great perks and services that could help in a better way your startup.
7. Survival Screams Success
Although not all startup accelerators can brag about successful exits, it is crucial for you to check the survival (or failure) rate. Yes, it’s important that you check how many startups are still alive, as well as how they are doing.
The survival rate is not only defined by how many businesses are still active but also by how well active startup are doing. Was there any follow-up investment? Did the number of employees grow since they “graduated”? All these extra questions will help you get a full picture of the program potential.
As a startup founder, you need to start from the assumption that to build your business, you don’t need to join an accelerator. These programs are not for everyone and you really need to understand whether this is the right step for you. Be focused, do your homework and try to understand if that program is the right partner for life.
Have you joined a startup accelerator to grow your startup? How was your experience? Share your experience in the comment section below.