Start-ups are considered to be the cool and very ‘now’ thing for the young and ambitious to aspire to live the glamorous life. With about 50 start-up accelerators in India and the growing network of entrepreneurs, a question that usually occurs is, ‘Should you take your startup through an accelerator?’ So, before we discuss whether you need a start-up accelerator to help you run the show, let us first understand what startup accelerators are and how they function and help.
Start-up accelerators are aimed at rapidly developing high growth potential start-ups in a relatively short period of time and finding them significant start-up capital soon after. They provide support through mentorship, access to technology, office space and an innovative community for a finite period of time – usually three to six months – in exchange for a small amount of equity. They are highly competitive in their entry process and typically end with a ‘demo day’ in which participating companies have the opportunity to pitch to prominent investors and the media.
Broadly speaking, accelerators serve a very valuable role in the entrepreneurial ecosystem. They provide an environment where you can advance your company incredibly in a short period of time. Accelerators put a brand name behind your startup. Essentially, the function of an accelerator is to turn the art of starting a company into a program that can be repeated, to attract better companies and investors.
If you are an outsider to the entrepreneurial community, accelerator will help you grow rapidly and expand your network; they will help you engage with a hyper-local ecosystem and the ‘who’s who’ of the community; if you are new to fundraising, they will provide the necessary due diligence for investors and thus help you establish relationships with them and create instant credibility. Through an accelerator, you will gain a lot of training on how to pitch, how to put together your pitch deck, what aspects of your business you should cover and then how to pitch in front of an audience or a VC.
Should I take my startup to an accelerator?
Taking your startup to an accelerator is more like getting into college. So, the primary question is should you go to college? And then, should you go to Harvard or Stanford?
The answer is Yes, you should go to an accelerator but it’s not a pre-requisite. So, if you don’t get into any of them, it doesn’t mean you are a failure. There are always other ways to do things.
There are alternatives to everything – you have friends and family to help you raise money, you can hire an advisor instead of a mentor, or other founders can introduce you to VCs or angel investors – but being in an accelerator makes things happen faster. It is like being in a boot camp – you have other founders going through the same thing that you are going through, trying to solve different problems and you learn a lot from them, probably making you progress faster together.
Before you apply or join an accelerator, think through the following:
1. Commitment to the venture
Too often, startups join accelerators before even baking the idea or setting up a prototype, so a lot of time is spent in creating the business along with accelerating it. Therefore, the company cannot leverage the resources or mentorship offered during the program. Follow the rule of three, before you proceed to join an accelerator:
- Establish a vision
- Lay the groundwork for the product/ services
- Give your 100% commitment
2. Don’t join with unrealistic expectations
Accelerators provide you with office infrastructure, mentorship, access to investors, recruiters and more – these services provide a participating startup with a distinct competitive advantage – but by no means do they guarantee that you will raise additional money or serve you success on a silver platter. So, be prepared to leverage the benefits you receive from the startup program and work your way through it.
3. Grow a thick skin and be prepared to take criticism
Although you are absolutely committed to your business, you don’t want to be told that you’ve done something wrong. But you should be prepared to listen to people around you. Learn to take criticism well. Mentors in these accelerators have ‘been there, done that’. They wouldn’t be there if they weren’t looking out for your best interest to help you reach the ultimate success for your company.
4. Research and decide
No two accelerators are the same. There are a number of startup accelerators being positioned to help support entrepreneurs with various ideas, but it’s important to evaluate the program’s vision and its execution. For instance, there are a lot of accelerators for IT and mobile startups but hardly any for social enterprises or manufacturing. So, you need to know if the accelerator offers you the right set of resources and opportunities required for your venture to be successful. As you are giving up certain equity in your company, make sure that the accelerator you intend to join will deliver their side of the deal.
5. Leverage from the community and boost your network
Finally, when you have made the decision and have joined the program, meet everyone you can and learn from them. One of the most tangible benefits of being a part of the startup program is the way you can fast track a business idea while enhancing your network contacts.
If you haven’t thought all these points through, then you may want to reconsider your decision.
Accelerators are not for everyone. If you are already well-connected to a particular entrepreneurial community, have an entrepreneurial track record and network, and are comfortable with your fundraising skills and relationships, then an accelerator probably isn’t worth it for you. But if those attributes don’t describe you as an entrepreneur, an accelerator may be an excellent choice.