Daniel Epstein of the Unreasonable Institute has a really interesting blog post up about accelerator programmes and accountability. The context is David Cohen’s guess that there’s a new accelerator programme set up every day. He might be right. The number is certainly increasing on Jed Christiansen’s Seed-DB although the number of impact accelerators (which is what I’m looking at at the moment) is much more modest. I get a similar level of emails to Daniel from people wanting to set them up.
What worries Daniel is the significance of what startups give up to accelerators, namely shares in their companies. At BGV we get a 6% stake in the startups in return for the £15,000 we invest and the support they get during the programme. Daniel thinks that programmes should have a break point half way through where the startup can decide whether or not they think they’ve got that much value and he’s putting it into practice on the upcoming Unreasonable At Sea programme. I think that’s a good idea although for us it would make more sense for it to be at the end of the programme and possibly even six months after the programme when it becomes clearer what impact we’ve had.
I think all accelerators really need to get the stats right as well and publish them openly which is why I’m a big fan of Jed’s Seed-DB. Not all the numbers are meaningful for everybody — Paul Graham has written about fundraising being a misleading statistic for example (which I agree with) but some founders find it useful. The mark to market value of the startups is another metric that is used or some programmes look at how many jobs have been created or the total revenues of startups they’ve supported. There’s no settled way of measuring things yet but I’m fairly sure it will come with time.
When you add the social impact element to all this though, things get even more complicated. When you start to consider how to measure the social or environmental impact that all your startups have had it becomes a bit like three dimensional chess. I don’t think anybody has cracked that for early stage social ventures yet.
My only addition to Daniel’s idea and what Jed is doing is that I also think we should all be publishing our costs, although I doubt this is going to happen soon because compared to other investors, the ratios don’t look good. For the last cycle of BGV for example we invested £85,000 and the programme cost £60,000 in cash terms. From what I hear that makes us pretty efficient but you also need to bare in mind all the ‘in-kind’ support we got from Google, the mentors and lots of other people. Again, it’s complicated but we do all need to work on this to get some standards in place. It’s something I’m asking all the programmes I’m meeting for the Field Guide about.
