Thoughts on Accelerators

Today I want to talk about Accelerators. There are lots of good ones out there from Y Combinator to TechStars to 500 Startups and more. Accelerators can really help a founder define their business strategy, meet investors and mentors, and refine their pitch deck and presentation skills. You typically get a cash injection from the Accelerator program and can often get pilots rolling with large corporations.

However, Accelerators are not great for every early stage startup. Most of the startups have classes or cohorts of 10–12 companies, and Y Combinator has over 100. Founders in an Accelerator cohort are effectively fighting each other for attention from the best mentors, investors, and corporate partners. The cream rises to the top of each class and gets the best outcome. Startups with specific patterns tend to get the most out of these programs.

If your startup has some traction, say $500K or more in prior year sales, you will likely be the darling of your startup cohort and will attract a lot of attention. Most of the companies in a cohort will have zero revenue going in and might not even have a product in market yet. If you do, you can bet that resources will flock to you and your Seed round will be a lot easier. I love Accelerators for companies with traction that are having trouble finding an institutional lead for their Seed round.

I also think that young, passionate, first-time founders who are struggling with their friends and family round can get a lot out of an Accelerator program. While you probably won’t raise much money, you will get critical assistance on your business plan and pitch, and you will likely pick up a key advisor or two. Plus the $100K or more that you get from the program will be a nice boost to your business, effectively serving as your friends and family money.

Other types of founders can benefit from Accelerator programs, but it becomes more difficult. If you get lost at the bottom of the class, chances are you will not accomplish much and can often leave the program with nothing more than a little cash and a fancy pitch deck. Take stock of your situation and make sure you are ready to maximize your Accelerator experience. You typically get only one bite at the apple with these programs.

Thanks for reading today’s post, I hope this helps you find the right path for your startup.

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