The Ultimate Guide to Accelerators: What Every Startup Founder Should Know
As an entrepreneur looking to take your startup to the next level, you may have come across the term’s “incubator” and “accelerator” in your research. While the two programs share similarities, they have distinct differences that make them suitable for diverse types of startups. In this guide, we will focus on Accelerators – what they are, how they work, and what benefits they offer to startups. Furthr delivers a range of accelerator programmes designed by our experienced team of startup mentors. These accelerators are informed by our deep experience of advising startup businesses on how to grow and scale and connecting them with investors since 1988.
What is an Accelerator?
An Accelerator is a programme, that provides startups with the skills, knowledge and competencies to take their business from idea/minimum viable product through to being an established business that is growing and scaling. It does this through the provision of mentorship, experiential learning and sharing with other entrepreneurs, and in many cases the provision of small amounts of ‘pre-seed’ funding ranging between €10K and €100K approx. Accelerators typically operate on a fixed timeline, usually around three to four months, during which startups receive intensive support to robustly develop their business models and business assumptions, hone their value proposition and prepare them for investment.
How Does an Accelerator Work?
The application process for an accelerator is highly competitive. Startups need to demonstrate that their business has the potential to have a highly scalable business model. They need to understand the journey to getting product market fit and the importance of strong market validation of their value proposition at the early stages of growth. If accepted into an accelerator, startups receive mentorship from experienced entrepreneurs and business leaders, and the possibility to connect to a network of investors and industry experts.
The programme typically kicks off with an orientation, where startups get to know the accelerator’s staff and fellow participants. During the programme, startups receive mentorship from industry experts and successful entrepreneurs, who guide them through the process of the continual testing and refining of the value proposition of the product and service, and evolving their business models. On completing accelerators, the companies are closer to being ‘Investor Readiness’. During the time on the accelerator, they will develop a compelling investor proposition that has been robustly tested and stands up to investor scrutiny.
Many accelerators also offer a wide range of resources to startups, including co-working space, legal and accounting advice, marketing support, and access to investors. At the end many accelerator programmes startups typically pitch their businesses at a demo day, where they can showcase their business to a panel of investors.
Benefits of an Accelerator
One of the most significant benefits of an accelerator is the mentorship provided to startups. Mentors are successful entrepreneurs or industry experts who provide invaluable guidance and support to startups. They offer advice on everything from refining the business model to product development, building out operations, growing teams, sales, marketing, and fundraising.
Accelerators typically offer startups exposure to investors and the investment community. On completing an accelerator, a startup should have a clearer picture as to what funding it would need to raise to execute on its business plan. This funding can be critical for startups, as it provides them with the capital, they need to develop their products or service fully, hire key staff, and get into the market selling their solution. Accelerators will offer education and exposure on the various types of investment start-ups can raise, from Venture Capital to Angel investment, Crowdfunding and much more.
Accelerators provide startups with access to a broad network of investors, industry experts, and successful entrepreneurs. This network can be invaluable for startups, as it provides them with opportunities to connect with potential investors, strategic partners and/or customers
Accelerators usually provide startups with a wide range of in kind resources, including co-working space, legal and financial advisory services and basic marketing support’s and guidance, These resources can be expensive for startups to obtain in the open market, making the accelerator program an excellent value proposition to keep costs down but significantly progress your business towards sustainable growth
5. Branding and Credibility
Participating in an accelerator program can also enhance a startup’s brand recognition and credibility. Being accepted into a reputable accelerator can signal to investors and potential customers that the startup has been vetted and is worth considering.
How to Choose the Right Accelerator
Choosing the right accelerator can be a critical decision for a startup. Here are some key factors to consider when evaluating accelerator programmes:
1. Industry Focus
Accelerators often have a specific industry focus. Look for an accelerator that aligns with your startup’s industry to ensure that you receive the most relevant mentorship, resources, and networking opportunities.
2. Programme Length
Accelerator programmes vary in length, with most lasting between three to four months. Consider how much time your startup needs to prepare for investment and choose an accelerator program that aligns with your timeline.
The quality of mentorship provided by an accelerator is crucial to the program’s success. Look for an accelerator that has a proven track-record of providing excellent mentorship and access to industry experts.
4. Alumni Network
Consider the accelerator’s alumni network and how it can benefit your startup. An active alumni network can provide ongoing mentorship, networking opportunities, and potential partnerships.
At Furthr we understand the challenges that face startups from the beginning of their journey all the way through to taking on investment and scaling. Accelerators offer startups a unique opportunity to accelerate their growth, receive valuable mentorship, and access funding and resources. Choosing the right accelerator can be a critical decision for a startup, and it is essential to evaluate the program based on factors such as industry focus, programme length, funding and equity, mentorship, and alumni network. With the right accelerator program, startups can take their businesses to the next level and achieve their growth goals. Check out Furthr’s full range of accelerators and our 1:1 consultancy offering that will support your startup at every stage.