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In the past few years, the conversation around startup accelerators has picked up some pace. While organizations that help in setting up businesses have always existed, the explosion of accelerators has been fueled partly by this era of small businesses and entrepreneurial spirit. There are different types of accelerators that entrepreneurs can turn to. However, it is critical to ensure that the accelerator you work with will actually help to boost your startup’s chances of success. With most startups failing within a few months, a good accelerator will guide you through the hurdles and challenges you face as you venture into the world of entrepreneurship.
What is a startup accelerator?
When it comes to understanding accelerator programs, entrepreneurs should first familiarize themselves with what a startup accelerator is and how they operate. Here is what you need to know before joining an accelerator program.
Startup accelerator basics
So what is a startup accelerator? This is an organization that offers business support services and resources to startup companies to accelerate their growth and increase their chances of success. Some of these services include physical space, coaching, networking connections, common services, and capital.
There are several ways through which startups can find the right accelerator for their needs. These include checking the various platforms for startups and taking part in local meet-ups and hackathons. Although the final decision over which accelerator to choose will depend on you, what you are looking for and the kind of business you run will be important factors to consider.
Accelerators and incubators offer great opportunities during the early days of a business. However, while accelerators support the growth of an existing company, a startup incubator focuses on disruptive ideas with the aim of creating a business model and a company.
Are startup incubators worth it?
Every startup is constantly searching for a business model that is repeatable, scalable, and sustainable. “Are startup incubators worth it?” and “do startup incubators work?”
To answer these questions, let’s start by looking at the primary role of incubators. Incubators provide an environment that encourages and inspires, making it possible for entrepreneurs to get more ideas and form possible alliances. The organizations offer quality advice as well as the support structure to ensure startups overcome common challenges. Training and leadership increase the likelihood of success while associating with a respectable incubator makes others take the startup seriously.
Also, after five years, businesses that were nurtured in incubators have a survival rate of 87 percent. This means that companies that join incubator and accelerator programs can take advantage of the training and assets offered to speed up and sustain their growth. In addition to searching for a ‘startup incubator near me,’ entrepreneurs should identify organizations that emphasize on accelerator best practices.
Startup accelerator business structure
To make the most of an accelerator program, every entrepreneur should understand how these organizations work. This will make it easy to find out what the various options offer and how they can benefit your business.
Startup accelerator structure
Generally, there is no single startup accelerator structure around which these organizations should operate. The enterprises have the freedom to adopt and embrace the style of management and ownership that works best for them. While some are for-profit, others are run by the government. There are also those that are non-profits. This simply means that accelerators and incubators can either be private companies or public corporations. However, a well-designed accelerator should have a structure that features three main businesses: the accelerator services business, investment business, and the investment management business.
Even as you compare a startup accelerator vs incubator, it is necessary to know how they make money. Just like any other organization, accelerators need to raise money to finance their operations. So how do startup accelerators make money? Some of the common ways include sponsorship, events, entrepreneur-in-residence programs, grants, rentals, and market consulting, among others.
How do startup accelerators work? Once you know the structure of these organizations and how they make money, you should understand how they work and how your business can benefit. The organizations offer advice, direction, and funding to ensure comprehensive support, skills development, risk management, and a springboard for future growth.
Startup accelerator business model
For a startup accelerator to ensure successful operations, it must adopt the best business model. An ideal business model will make it easy to identify the intended customer base, sources of revenue, product, and details of financing. With the different business models available, accelerators should go for one that supports the viability of their products and includes the goals of the organization.
Whether you are thinking of a startup incubator business model or a startup accelerator business model, there are several issues it should focus on. These include the stage of development of startups they will accept, the sectors to focus on, the structure of training, mentors, and whether the organization will take an equity interest. One of the best examples is the combinatory business model which focuses on investing a small amount of money in a large number of startups. A startup accelerator business model pdf can provide more examples of models that can contribute to the success of accelerators.
How to choose a startup accelerator
By now, it is clear that joining a startup accelerator is a great way for any startup to gain traction, access capital, and build a customer base. However, in order to realize these benefits, it is essential to choose a startup accelerator whose program will meet the needs of your startup.
Early stage accelerators
An early stage accelerator is an organization that accompanies early stage startups in the journey to grow the business. Such organizations nurture entrepreneurs as they move from the idea to the business stage and create the final product that is ready for the market.
For your accelerator application to be successful, there are several things you will need to focus on. First, make sure you do your homework regarding the market, your target customers, as well as how the program will benefit your startup. Also, be brief and to the point, do not overestimate your growth potential, highlight the progress you have made so far and remain flexible about your strategy even as you hold on to the vision.
The difference between an early and late stage accelerator is the time at which they come in to help and support the entrepreneur. While an early stage startup incubator will nurture the business from the idea stage, a late stage accelerator can be regarded as an entrepreneur accelerator. This means that it is designed to speed up the growth of an already existing business venture. This also has a direct impact on the kind of companies that should join the accelerator programs.
Since the startup phase of different companies varies in regard to time, there is no specific time that it is too late to join an accelerator program. Whenever an entrepreneur needs business support services, they can apply to join the programs. However, a venture incubator is designed to help only businesses in the early stages.
Best startup incubators
One of the reasons why entrepreneurs choose the best startup incubators is because they can be the difference between success and failure. Some of the best incubators and accelerators include Y Combinator, Techstars, 500 Startups, AngelPad, Seedcamp, Capital Factory, ERA, Amplify and Betaworks.
All the organizations on this startup accelerator list focus on connecting entrepreneurs to a global network of advisors. This helps budding entrepreneurs to overcome some of the common challenges faced by startups within the shortest time possible. Apart from the partnerships, the incubators and accelerators offer inspiration as well as seed money to propel businesses to the next level.
The organizations in the startup incubators list above have helped set up numerous companies that have gone on to record impressive growth. This is one of the best ways to measure their successes.
Where to find a startup accelerator
With the important role that incubator and accelerator programs play, it is necessary to find the right startup accelerator. There are a number of cities where budding entrepreneurs can find good startup accelerators in the U.S., the U.K., and India. Here is some information to get you started on your journey to entrepreneurship.
Startup accelerators in the U.S.
Some of the top cities in the U.S. for startup accelerators are San Francisco, Austin, New York City, San Diego, and Atlanta. These cities have recorded not only impressive revenue growth over time but also have renowned startup ecosystems. This had led to the rise of an entrepreneurial spirit and the setting up of numerous incubator and accelerator programs.
Some of the options entrepreneurs can consider in the U.S. include Techstars NYC, Entrepreneurs Roundtable Accelerator, and 1776 Accelerator. Considering the vibrant economy in New York City, startup accelerators NYC have the experience and connections required to propel startup businesses to success.
Startup accelerators in the U.K.
The U.K. has a number of cities where budding entrepreneurs can set up new businesses, making them great cities for startup accelerators. These cities include London, Glasgow, Manchester, Birmingham, and Liverpool. While location should not be an issue when launching a business in today’s world, the cities offer some clear advantages.
If you are looking to enjoy business support services for your startup in the U.K., you can consider approaching Techstars London or Barclays accelerator. Depending on whether your business is in the idea stage or is already running, you can apply to startup accelerator London or startup incubator U.K. The specific needs of your business will also determine if you will go for startup funding London or FinTech accelerator London.
Startup accelerators in India
India is also home to some of the best startup incubators and accelerators. Identifying the best incubators and accelerators in India will play an essential part in the success of your business. Some of the cities where you can find these organizations are Bangalore, Delhi, Mumbai, Chennai, and Hyderabad.
Some of the most popular and successful startup accelerators in India are GSF accelerator and Catalyzer startup accelerator. Depending on your sector and size of the business, you should apply to a startup accelerator India, FinTech accelerator India or corporate accelerators in India.