Top Things to Know Before Joining an Accelerator

Starting a business is hard and requires making tough decisions. More than that, most startups struggle to find the necessary investment. This is why many startup founders seek to join an accelerator that will make the initial investment and provide quality mentor support.

Startup accelerators have attracted a lot of buzz in recent years and multiplied in number too. Still, the abundance of related terms — angel investors, venture capitals, crowdfunding, incubators to name just a few — make early entrepreneurs really confused on what accelerators are all about.

Are accelerators and incubators the same thing?

How can you choose the right accelerator and get accepted?

Will it make your startup failure-proof?

These are the questions to ask yourself before contemplating your future in an accelerator. Although my experience is not too big, I have already been there and I will try to give some of the answers.

Incubators vs. Accelerators: What’s the Difference?

Attending global conferences and communicating with fellow startups, we have noted that most of them do not distinguish between incubators and accelerators — some even use the words interchangeably as synonyms.

There is a marked difference between the two:

1. An entry stage: Incubators support startups with a business idea, but no business model. Accelerators accept those who already have a business model in place.
2. Duration: Incubators’ timeline is often open-ended, and there is no pressure on startups to “graduate”. Accelerators’ programs often last for three to four months and culminate in a Demo Day, when startups can pitch the qualified investors.
3. Chances to be accepted: Incubators are funded by universities and organizations interested in community development and the creation of new working places. If your startup is something like this, you have pretty good chances to get accepted. Accelerators are more selective, and some of the best are notorious for taking no more than 1% to 3% of all applicants.
4. Investment: Incubators guide but do not invest capital into startups. Accelerators have a traditional business-like approach: they invest a specific sum in a startup and gain an equity share (around 7–8%) instead.

Choosing the Right Fit for Your Startup

When choosing the most suitable accelerator for your startup, do not chase their popularity or big names among the mentors. All these do not guarantee success.

Instead,

• study the portfolio of the accelerator to see if it has helped a comparable business to rise
• research the mentors’ experience with your niche or your type of product

Most importantly,

• make sure the culture of the accelerator and its location is a good fit considering the values you cherish.

If it is possible, visit the most popular destinations and seek a chance to communicate with accelerators’ representatives face to face.

In fact, these were the two factors that made me choose. After an online search, I still had no idea what accelerator might work well for a nect MODEM, a hardware startup I have founded. A Boomtown Accelerator, to which we had been invited, was not an expectation too, so I even hesitated whether to fill out the form.

However, after speaking to a representative of the Boomtown Accelerator on CES and visiting New York, Silicon Valley and Boulder — drastically different startup hubs in terms of culture — I was sure about where I wanted to be.

Dos and Don’ts of Applying

After you choose an accelerator, it’s time to think about the application process. Here are the major do and don’ts to remember:

1. Focus on your product and its traction instead of the application process itself. A fancy video for your pitch will trigger many expenses but will not add you an advantage over competitors that have a better business case.
2. Do not put off doing business for the sake of application. Joining an accelerator is a good chance for your startup, but do not make the prospect of getting accepted make you overlook other viable opportunities.
3. Plan your hiring. Most startups on early stages consist of a founder and a co-founder, and a major mistake would be to put off looking for potential contractors (e.g. developers, marketing experts) until you get accepted into the accelerator. For when you do, the pace of working on your startup will become blistering. The mentors will advise you on the necessary steps, and it is critical to have a network of contractors to be able to execute them and move forward.

Concluding Ideas

Joining an accelerator may be a unique opportunity for a startup paving the way to a sustainable business. Still, see an accelerator as a means to your goal, not a goal in itself.

There is a good test to see if you do.

Close your eyes and paint a picture of success, which you associate with an accelerator.

If you have imagined yourself talking to a prominent mentor or even successfully pitching your idea to investors — you probably see joining an accelerator as a goal in itself. Thus, the experience may distract you from the main focus, while the unsuccessful application may leave you crushed and discouraged.

In that case, put off the idea of joining until you have a clear vision of a true goal you are pursuing, like the image of people enjoying and using your product.