As seed accelerators become more prevalent in startup culture, it’s important to consider if going this route is right for you and your startup. With the promise of mentorship, capital (in exchange for equity), networking opportunities, and business growth, an accelerator can be pertinent to getting your company off the ground without spending too much time in the early growth stages. An accelerator nurtures your company, fostering growth in a few weeks that can usually take several months or even years. Plus, there’s always the benefit of becoming a better, more efficient founder.
We compiled a list of the most important factors to consider before applying to an accelerator. Don’t rush into this one!
Accelerator vs. Incubator
Incubator and accelerator are sometimes used interchangeably. They’re actually very different. Accelerators are geared towards early stage startups, offer capital for equity, and have specific start and end dates. They offer mentorship, and aim to grow the size and value of your company. Think Techstars or Y Combinator. While incubators also want to see you succeed, they are generally geared towards later stage startups, may or may not offer capital, and have no specific end date — a bit more like the Endeavor program. If your startup already has plenty of traction, then an incubator may be for you.
Do you even need an accelerator?
Some founders downplay their success. If you’ve already reached multiple milestones, have funding, a great team, and more — there’s a chance that an accelerator won’t offer you new goals to achieve. In this case, it’s important to look at their program outline and see if you can benefit from it, as they can vary. On the other hand, if you do need funding, or will soon, an accelerator will be a huge help. They’ll guide you on how to build a defensible business model, stand out from competition, and solidify your product market fit.
What kind of expertise do you need?
There are accelerators that cater to different industries like education, finance, or health tech. These types of accelerators will have specific programs and mentorship with experience fit for your industry and for your startup. The opportunity to meet and work with other startup founders who have similar interests as you won’t hurt, either.
Other accelerators will have a more general approach, but are still just as helpful. They may focus on helping you grow as a founder, a specific product launch, or scaling your startup to more markets. Your best bet for these are to do research on the mentors involved with the accelerator, and see if there’s at least one that will fit your needs.
Do you understand the terms?
Not all accelerators offer the same amount of value. It’s important for you to understand what you’re receiving for your time and equity. How much face time will you get to spend with the mentors? You want to make sure you’re getting a worthwhile return. Do they offer you a flat amount of funding upon joining? If so, what do you give in return?
Another thing to ponder: what happens if for some reason you want to pull out of the program? You’ll need to understand the process of returning the funding you received and voiding the contract should anything happen. Prepare for the worst, but hope for the best!
What do the alumni think?
This step is incredibly important in choosing an accelerator. Do some research, find alumni (accelerators themselves can connect you during the application process), and ask them about their experience and how it benefited their startup. What did they get out of it? How much has their company improved? And most of all, did they enjoy it? If most of them say yes, and their values are in alignment with yours, the accelerator might be great choice!
Wondering about accelerators in the Atlanta area? Check out Startup Atlanta’s Guide to Atlanta’s Ecosystem.