Highly useful for anyone deciding which accelerator to apply for. "Business is booming for startup accelerators. More entrepreneurs are seeing the advantage and benefits of going through such programmes. But they are intensive and can come with trying requirements outside of the terms of application. With that in mind, here are some things you should consider before applying to an accelerator. Why are you applying? Joining an accelerator will cost you time and equity. Rushing into applying for one because ‘it’s what startups do’ could, therefore, be a costly mistake. So the first thing to do is ask yourself why you are applying to an accelerator? Is it because accelerators are in vogue? Are you just hoping for the validation and credibility that comes with being accepted by one? Do you think that an accelerator is a guaranteed quick fix or express ticket to success? Make sure you have the right reasons for applying.
In what location are you applying? It would be another mistake to opt for an accelerator simply because it is based in your area. Shop around and you may find the perfect accelerator for you in another city. It may even mean moving from England to Scotland, Wales to Ireland, or further abroad, but if it is exactly what you and your business needs, it’s probably worth it.
What kind of accelerator to go for? Decide what accelerator is the best fit for you. What stage of startup do they focus on – early stage seed, late stage seed, any stage? Do you want to apply for an accelerator that focuses on a particular expertise or speciality? It’s difficult for an accelerator to truly cover everything, though some can have a fairly generalist set up. Identify exactly what you need from an accelerator and then find out what your chosen accelerators focus on and what they don’t. If you can, speak to some alumni (recent ones), and hear their experience and perspective on the programme – what did the accelerator do for them, did they achieve their goals from it, etc.?
What about accelerator’s network? Again, look at the accelerator’s alumni, who they are and how well they are doing. Does the accelerator provide a comprehensive mentorship programme? This is a large draw of accelerators and something you should definitely take into consideration. It would be a good idea, then, to investigate who the mentors are and what area/industry/problem they specifically work on or have experience with. If it looks good so far, check just how much time you will actually get with the mentors, as it varies greatly and some will offer very little time. Additionally, it is possible to be misled into thinking someone is a mentor when they are not – ensure that what you are reading explicitly states that the person offers mentorship within the accelerator and doesn’t simply support the programme, for example.
Does the accelerator require equity? The vast majority of accelerators require equity in exchange for admittance. This can range from around 3-8% up to a staggering 50%! Accelerators that ask too much equity are a red flag, so make sure to investigate what the average request is and what you are willing to give away. Remember that the more you give away, the less you will have to offer investors. On the other hand, if they take no equity, they might not be what you are looking for either since this might suggest a lower quality programme, or one which doesn’t have the resources necessary to help your business.
Does the accelerator offer investment? Some accelerators offer investment as part of their programme. If this is the case, you will be killing two birds with one stone, although their initial investment may be less than if you were doing a normal seed funding round. But don’t fall into the trap of letting the investment they offer skew your decision making process- money is great, but it isn’t necessarily the point of going on a programme. Many accelerators give you access to a network of investors through organized pitch events at the end of the programme, but again these should be viewed as a bonus, rather than your purpose in applying.
Is your team the best it can be? This is where you may have to become a little ruthless. Your team is, as the cliché goes, only as strong as its weakest link. Every member has to be not only skilled and capable, but ready and willing to work as hard as they can to make the business shine. They need to complement each other, function well together and, basically, be a proper team. The accelerator will be taking your team into consideration when deciding whether or not to offer you a place on the programme, so it is vital that you show the skills and experience necessary to thrive during and after your participation.
Is your business ready? If you rush into applying to an accelerator without making sure you are 100% ready, you probably won't get very far. There’s a very low acceptance rate for accelerators, so you have to be sure that it is your time. This means: having a diversely skilled team (as already stated); being able to clearly identify your market, the problem you are solving or gap you are filling, your USP; showing scalability; proving that you have traction through revenue, investors, MVP, etc.; and basically knowing that you are at a stage where the accelerator can look at your business and see that you’re going places and that it is worth their time and effort.
Are you ready? Don’t underestimate the amount of time and energy you will be putting into this. Being in an accelerator is an intensive process that lasts, on average, around three months. Are you ready to put in that time and effort? Are you ready to move to another city or even country for that time? Equally importantly: is your team ready for all that? As mentioned earlier, every member of the team has to be as dedicated as you, so if a single one of them is unsure about putting in the time and energy to something so intensive, or indeed about moving away from home for that time, you aren’t ready.
Do you have an MVP? This ties in to the previous question. If you have a minimum viable product then you are bringing in revenue, you are showing that you have actually got your product or service to market, it will give you feedback and show the accelerator more than pictures, plans, and statistics. It seems as though many applicants to accelerators do not have an MVP, so having one will give you an immediate advantage. It will tell them all sorts of things about not just your product or service, but about you and your business as a whole. Not having an MVP may very well work against you, depending on your sector, as some accelerators won’t even accept applications from startups without one.
Thanks for the great insights Diane, and best of luck with the upcoming intake of Startups onto StartPlanetNI!
If you are the founder of a tech-focused startup that needs some support in development then be sure to take a look at StartPlanetNI, which could be a good opportunity for you.
StartPlanetNI are also a delivery partner of the upSTART Pitch Battle for Tech Startups taking place at Digital DNA enterprise and technology expo taking place in June.