If you are a startup founder looking for ways to accelerate your growth, raise funding, and connect with mentors and investors, you might be considering joining an accelerator program. But how do you choose the right one for your startup? What are the benefits and drawbacks of different types of accelerators? And what can you learn from the fall of NewChip, one of the most popular online accelerator programs in the world?
What is an accelerator program?
An accelerator program is a short-term, intensive program that provides selected startups with mentorship, training, resources, and access to potential investors. The goal of an accelerator program is to help startups achieve product-market fit, validate their business model, scale their operations, and prepare for fundraising.
There are different types of accelerator programs, such as:
- Online or remote accelerators, which are conducted entirely online and do not require relocation or physical presence. Examples include Y Combinator, Techstars Anywhere, and 500 Startups Remote.
- In-person or local accelerators, which are based in a specific location and require startups to relocate or commute for the duration of the program. Examples include Techstars Boston, 500 Startups San Francisco, and Plug and Play.
- Vertical or industry-specific accelerators, which focus on a particular sector or niche and provide specialized mentorship and resources. Examples include IndieBio (biotech), Dreamit Health (healthcare), and Food-X (food).
- Corporate or strategic accelerators, which are sponsored by large companies or organizations and aim to foster innovation and collaboration. Examples include Google Launchpad, Microsoft for Startups, and Comcast NBCUniversal LIFT Labs.
What are the pros and cons of joining an accelerator program?
Joining an accelerator program can have many benefits for your startup, such as:
- Learning from experts. You can get valuable feedback and advice from experienced mentors, investors, and peers who have been through the startup journey before.
- Accessing resources. You can leverage the network, tools, discounts, and perks that the accelerator program offers to save money and time.
- Gaining exposure. You can showcase your startup to potential customers, partners, media, and investors through demo days, pitch events, and online platforms.
- Raising funding. You can increase your chances of securing investment from angel investors, venture capitalists, or crowdfunding platforms that are affiliated with or attracted by the accelerator program.
However, joining an accelerator program also has some drawbacks, such as:
- Giving up equity. Some accelerator programs require you to give up a percentage of your startup’s ownership in exchange for their support. This can dilute your control and future returns.
- Committing time and energy. Some accelerator programs are very intensive and demanding, requiring you to attend workshops, meetings, events, and assignments on a regular basis. This can distract you from your core business activities and cause burnout.
- Relocating or traveling. Some accelerator programs require you to move to a different city or country for the duration of the program. This can be costly, disruptive, and stressful for you and your team.
- Competing or conforming. Some accelerator programs are very competitive and selective, accepting only a small fraction of applicants. This can create pressure and anxiety for you and your startup. Some accelerator programs also have a standardized curriculum or methodology that may not suit your specific needs or goals.
How to choose an accelerator program for your startup?
The fall of NewChip in May 2023 serves as a cautionary tale for both startup founders and accelerator operators. It shows that not all accelerator programs are created equal and that joining one does not guarantee success.
Therefore, before applying to any accelerator program, you should do your homework and ask yourself some important questions:
- What are your goals? What do you want to achieve by joining an accelerator program? Do you want to learn new skills, find mentors, gain exposure, raise funding, or something else?
- What are your needs? What are the specific challenges or gaps that you need help with? Do you need product development, customer acquisition,
- Market validation, or feedback from potential customers and users?
- Business model, or how you will generate revenue and profit?
- Growth strategy, or how you will acquire and retain customers and scale your operations?
- Team development, or how you will recruit, train, and manage your employees and co-founders?
- Legal and regulatory issues, or how you will comply with the laws and regulations of your industry and location?
Choose an accelerator program that can address your specific needs and provide you with the most relevant and customized support.
- What are your preferences? What are the personal and professional factors that influence your decision to join an accelerator program? Do you prefer to work online or in-person? Do you want to relocate or stay in your current location? Do you want to join a general or a specialized program? Do you want to give up equity or not? Do you want to join a competitive or a collaborative program?
Choose an accelerator program that matches your preferences and expectations and provides you with the most comfortable and enjoyable experience.
How to evaluate an accelerator program?
Once you have identified your goals, needs, and preferences, you can start researching and comparing different accelerator programs that fit your criteria. Here are some tips on how to evaluate an accelerator program:
- Check their track record. Look at the past performance and outcomes of the accelerator program, such as the number of startups they have supported, the amount of funding they have raised, the survival rate of their alumni, and the impact they have created. You can also look at their portfolio companies and see if they are relevant and successful in your industry or market.
- Talk to their alumni. Reach out to the founders who have gone through the accelerator program and ask them about their experience, feedback, and advice. You can also ask them about the benefits and challenges of joining the program, the quality of the mentorship and training, the network and connections they gained, and the impact on their business growth and fundraising.
- Meet their team. Get to know the people behind the accelerator program, such as the managers, mentors, investors, partners, and staff. You can also attend their events, webinars, workshops, or info sessions to get a sense of their culture, values, and vision. You want to join an accelerator program that has a competent, supportive, and diverse team that can help you achieve your goals.
- Understand their offering. Review the details and terms of the accelerator program, such as the duration, curriculum, schedule, location, funding amount, equity stake, application process, selection criteria, graduation requirements, etc. You want to join an accelerator program that has a clear, transparent,
- Compare your options. Don’t limit yourself to one accelerator program. Apply to multiple programs that fit your criteria and compare their pros and cons. You can use online platforms such as F6S, AngelList, or Gust to discover and apply to various accelerator programs around the world.
Choosing an accelerator program for your startup is a big decision that can have a significant impact on your success. Therefore, you should do your research, evaluate your options, and select the best one for your startup. Remember that joining an accelerator program is not a guarantee of success, but rather an opportunity to learn, grow, and connect with others who can help you along the way.
If you are looking for some examples of successful accelerator programs, here are some of the most renowned ones in the world:
- Y Combinator. Based in Silicon Valley, Y Combinator is one of the most prestigious and influential accelerator programs in the world. It has backed over 2,000 startups, including Airbnb, Dropbox, Stripe, Reddit, and Coinbase. It offers $125,000 in exchange for 7% equity and provides mentorship, education, and access to a network of investors and alumni.
- Techstars. Techstars is a global network of accelerator programs that operates in over 40 cities across 16 countries. It has supported over 2,000 startups, including ClassPass, DigitalOcean, PillPack, and Zipline. It offers $20,000 in exchange for 6% equity and provides mentorship, resources, and access to a network of investors and alumni.
- 500 Startups. 500 Startups is a global venture capital firm and accelerator program that invests in early-stage startups across various sectors and regions. It has backed over 2,400 startups, including Canva, Udemy, Grab, and Talkdesk. It offers up to $150,000 in exchange for 6% equity and provides mentorship, training, and access to a network of investors and alumni
- Plug and Play. Plug and Play is a global innovation platform that connects startups with corporations and investors. It has invested in over 1,000 startups, including PayPal, Dropbox, Lending Club, and Honey. It offers up to $500,000 in exchange for 5% equity and provides mentorship, resources, and access to a network of investors and corporate partners.
These are just some of the examples of successful accelerator programs that you can consider applying to. However, there are many more options available for different types of startups and entrepreneurs. You can use online platforms such as F6S, AngelList, or Gust to discover and apply to various accelerator programs.
Choosing an accelerator program for your startup is a big decision that can have a significant impact on your success. Therefore, you should do your research, evaluate your options, and select the best one for your startup. Remember that joining an accelerator program is not a guarantee of success, but rather an opportunity to learn, grow, and connect with others who can help you along the way.
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