Will a startup really benefit from an Accelerator Program? This is a million-dollar question in the minds of several Founders and for good reasons! StartUp Accelerators or Seed Accelerators as they’re also called, are programs which encompass seed investments in startups for fixed terms along with mentorship, connections, educational and skill based programs and usually reach their climax at demonstrations or public events for sparking higher growth. Many startup accelerators in Silicon Valley and other global hubs are usually funded via investment funds privately in exchange for equity and these usually focus on multiple business sectors.
Business incubators, by contrast, are usually government backed zero equity sector/industry-specific programs for fledgling startups. Accelerators have application procedures that are open to just about anyone although the entire arena is quite competitive. There are various kinds of accelerators including corporate accelerators and the like. Being part of an accelerator as an entrepreneur can certainly be rewarding, going by the educational component of these programs, the mentorship, insights, industry connections and the sheer recognition that comes from being part of a major accelerator. Additionally, the product pitch opportunity and presentation of the startup to investors is another huge opportunity for future growth.
Early stage growth can be driven through startup accelerators in many cases and startups enter these accelerators for a fixed period of time. The entire experience offers considerable training, education and experience for young and budding companies. Accelerators have four unique components that differentiate them from angel investments, incubators and seed stage venture capital. These are their fixed-term nature, cohort-based operations and mentorship backed progress along with the final culmination through an event.
For entrepreneurs setting out to grow their startups, accelerators can be a hugely rewarding educational experience where a fixed time period enables the entrepreneur to learn and grow rapidly. As per reports, startups which have successfully graduated from reputed accelerator programs, witnessed faster achievement of key landmarks and goals including raising of venture capital, gaining more customers and exiting through acquisition as compared to startups that have not participated in accelerator programs. Startups that pass through accelerators are more likely to garner their next funding round quicker as compared to startups that have not been through an accelerator program. This is one of the biggest parameters or thought points that entrepreneurs must keep in mind. Startups which have passed out from an accelerator with flying colours are more likely to get interested angel investors and venture capitalists. Those startups which have an exit/acquisition in mind are likely to be acquired faster by a top company after passing out through an accelerator.
The entire experience in a startup accelerator revolves around one key word- Learning. This is the biggest pivot on which the success of the accelerator model hinges. Accelerators also help in building an entrepreneur and startup’s future credentials when it comes to dealing with venture capital firms, angel investors and the industry at large. They function without any selection biases such as age, experience, previous experience and so on. In fact accelerators can also be viewed as a kind of finishing school if you take that perspective. They are that vital sounding board and platform which you require to jump straight from the frying pan into the fire.
This is where they play a hugely vital role for startups and entrepreneurs. Accelerators also have a majorly positive impact on the entire startup community and ecosystem. They help in sparking the inflows of more funding for these startups and also enable regional startups to reach out to targeted audiences along with raising funding. Several accelerators have put regional startups on the map and this is a boon considering the fact that metropolitan zones are usually where all the action takes place in terms of seed funding and venture capital investments.
Accelerators can positively impact overall startup performance and this is something that entrepreneurs may look to harness from the experience along with enjoying the benefits of decades of learning compressed into actionable insights and material that makes them better equipped to grow their businesses. Accelerators also work as a magnet for early-stage funding and seed capital which makes them a win-win mostly for young entrepreneurs and startups.
At India Accelerator, the only GAN partnered accelerator in India, provides a 360-degrees mentorship program to early-stage technology startups on all aspects of business scale-up. Currently, we are inviting applications for S2019 Cohort. Early stage technology startups can apply to be part of the same at – bit.ly/Apply_S2019 – and take advantage of the curated program for the founders to empower them with cash, connects and competency.