Tag: Springboard

What do founders get from accelerator programs?

When I think back to why we applied to Seedcamp, it was probably the money that attracted us in the first place. We’d been working on School of Everything for about a year, running the company on a very small amount of cash which was rapidly running out, so €50,000 of investment was quite enticing. My guess is that for a lot of teams applying for accelerator programs, in advance of being accepted, it is the idea of investment that initially peaks their interest in applying. I’d like to test that hunch though.

In truth what accelerators give first time founders is actually very different. Having spoken to quite a few companies that have been through Y-Combinator, Seedcamp and the like, there are a few themes that stand out:

  • Accelerators give you the chance to meet people in the tech industry, both from successful startups and in larger tech businesses. Many of the people I’ve spoken to have told stories about how they met people who later went on to help them be successful. This could be the guy from PayPal who tells you what you need to do to take payments in a particular way or the branding consultant who gives you the insight you need to change your name. For Seedcamp, Techstars and Springboard, this is achieved through ‘mentoring’ (for example see this list from Seedcamp) while in the case of Y-Combinator, the speakers are the most obvious exposure the teams have to people who are already founders.
  • Accelerators give you introductions to investors and time face-to-face with them which can be hard to get for first-time founders. Because accelerators do a great job of providing a quality pipeline of new companies (more on that in a future post), a lot of investors make sure they go along to accelerator events and getting them all in the same place is something that is a very rare opportunity for new companies.
  • Accelerators give young companies validation. The idea that you’ve been vetted by a group of successful founders and investors helps any early stage company, whether that’s with journalists, or investors or potential clients. It helps to be able to say that you’ve been selected as a ‘promising startup’ by an accelerator program. The value of that validation is linked to how well the program is regarded. Saul Klein has written about this in relation to Seedcamp.
  • Accelerators give you a peer support group. Strange as it might seem it’s actually quite hard to meet people who are doing the same thing as you, even in London and to some extent in other tech hotspots. And for teams who are starting out elsewhere, it’s really tricky. The problem is that most interactions with other founders are very superficial and you really need to be spending time in the same building or meeting each other regularly over the course of a few months to get to know them to a level where you can provide each other with meaningful support.
  • Finally accelerators provide pressure. A number of people have said that one of the things they got out of an accelerator program was a deadline and basic framework for getting there. Of course every company should be able to provide this themselves, but in reality in the early days it’s tricky to do.

So those are first thoughts. Let us know if there’s anything we’ve missed in the list of benefits for founders.
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Defining Accelerator Programs

As we start working on The Startup Factories there are a few things we need to get straight. First of all we need to try and settle on a definition of what constitutes an accelerator program. Quora is doing a great job of listing the kind of scheme we’re interested in as they pop up, but what are the defining features? Our first thoughts are:

  • They work with pre-seed stage companies — usually with small teams (2–4 people) of first time founders.
  • They are selective — they have some form of application process, this could either be by referral or by an open application system with expert judgement that picks the most promising companies.
  • They are time bound — they have an intense period of support for companies that usually lasts for three months, although there is often some form of support beyond this period.
  • They support teams in cohorts — they tend to take companies in batches to create peer support. This can be anything from six per cohort up to over 30 in the case of Y-Combinator.
  • They have a heavy focus on mentoring — bringing in people from the local tech and business communities to help the companies
  • They have the aim of securing further funding for companies. Accelerators are often described as ‘on ramps’ to the investment world.

Then there are a few features that accelerators have different approaches to:

  • Providing shared office space — Y-Combinator and Seedcamp don’t provide shared office space, Techstars and Springboard do.
  • Providing finance at the beginning of the program — While most accelerators do provide finance up front, Village Capital for example provide a prize at the end of the program.

I’m sure we’ll come up with a sharper definition as the project progresses — in the grand scheme of things it’s early days for the accelerator model and things will change over the next few years. There’s also a lot of room for diversity within the model because the context makes a big difference. Whereas we know an awful lot about starting companies using bank credit because the model has been in place for centuries, we’re only just learning how to create and support new businesses in the internet age.
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