Pros and Cons of Startup Accelerators

Every entrepreneur wants to see his startup growing at a rapid rate, but the severe competition has slowed down the desired results. Startup Accelerators work as catalysts to promote the growth of the company they are concerned with. ­­­­They are basically a program which helps startups with funding, training, mentoring, consumer relations, etc., resulting in the promising growths of startups. The concept of startup accelerators is not new, they are in the marketplace since late 1950’s, and the increase in the launch of startups has resulted in the rapid demand of startup accelerators. If we look more deeply, we would find out that it is not the only reason for the increased demand of startup accelerators but the remarkable results they have produced, and Reddit is one big example of it. Here, we will learn more about the pros and cons of startup accelerators.   

Pros of Startup Accelerators 

* Access to Mentors 

The main reasons why many startups are attracted towards the program of startup accelerators is the exposure to many mentors. It forms a kind of network among the like-minded people, and one can have a one-to-one session with the industry experts. It is not only insightful but motivating too. 

* Capital Help 

Many startup accelerator programs help their clients to cope up with the capital issues as well. Suppose, you cannot find any angel investor or the bank is creating a lot of fuss before granting you a loan, you can always count on startup accelerators as a helping hand. They provide funds for the development of your startup and help you to invest it in right places. 

* Benchmark your Company  

Startup accelerators help you to benchmark your company. When you are enrolled in a program, you get to understand where your rivals stand, what are the things you are lacking, what approach you should take to make a positive change? These things evaluate your working methods and help to generate a more powerful structure of your startup.   

Cons of Startup Accelerators

* No Two Accelerators are same 

Like no fingers are of the same size, no two accelerators are same. This implies that it is not necessary that the program you are enrolling yourself into for 5-6 months will yield out sparkling results. They may help, they may make you the next big thing, but it is not necessary, which is a very big risk. 

* It Demands More 

Some startup accelerators have a clause that they will be the right owner of your business after a particular time period. This is the most critical clause. Some accelerators take an equity share in your business, and it will also depend on the accelerator to accelerator. Some might want only 5% but some might ask for 40%. It is a daunting thing for an entrepreneur to give a part of his business to something which will only help for a few months. 

* Hard to Get In 

Apart from the aforementioned cons, the biggest problem arises when the entrepreneur is ready to take all risk but he is not selected for the accelerator program. Yes, they are hard to get in. For example, TechStars, the best startup accelerator in the world, cancel 99% of the applications for enrolment. 

We can conclude that startup accelerators are risky yet yield good results. It is the decision of the entrepreneur if he wants to sell a few percent from his equity or let the startup grow in a traditional manner.