Innovators and budding entrepreneurs with brilliant business ideas don’t always have the expertise to convert their concept into a commercially viable company. Their ideas or Intellectual Property need the support of experts who can provide the necessary guidance and training. In other words, they need an incubator or startup accelerator program. These third-party platforms will help launch and develop the idea into a product prototype for potential investors to back with funding. Read on to know more about how these programs work.
Accelerator Programs Provide Much-Needed Traction
The first accelerator program was the Y Combinator. It was established in 2013 to create a founder-friendly ecosystem. The Y Combinator, alongside more than 700 other programs in the US, is a non-profit organization. Of all the programs available today, some are public, and others are privately owned and run. These startup accelerators provide users with basic funding and other support to attract investment. Mentoring, training, peer support, infrastructure, and staff assistance are only some of the benefits that entrepreneurs can expect. In addition, founders get the opportunity to interact with a network of potential investors who might be interested in funding their company. Essentially, accelerators support early-stage or pre-seed-stage startups.
Signing up for the Startup Accelerator Program
Any entrepreneur can apply for and sign up with an accelerator program. If you think you have an interesting concept with potential, check the website of the program that appeals to you and enter an application online. Invitations to apply are always open. However, you’ll have a better chance of getting in if you pick the program that supports your product’s specific industry. Do some research into the most frequently funded startups and their niches. Some examples include, agritech, fintech, green technology, and digital marketing.
The organizers accept applications after vetting the business idea and founder and evaluating them for viability. Getting accepted into the program is not easy since the top programs receive thousands of applications but accept just 1% to 3%. Getting in is validation in itself that your concept is robust enough for expert backing. Furthermore, you can rest assured that you’ll get the support you need to build a thriving business.
Programs Last for a Fixed Term
Once selected, founders can expect the program to last for a fixed term. These terms range from two or three weeks to three months and up to six months. Intensive training, mentoring, and knowledge are crammed into this short window. Candidates must work hard to make the most of this opportunity. The deliberately short time frame aims to spur learning and expedite growth. You’ll have the top experts in your field providing guidance, leading workshops, lectures, seminars, and answering questions. Most importantly, you’ll get insights into the legal implications of starting a business, registering it, and acquiring mandatory licensing or business insurance, among other facets.
Entrepreneurs Join a Peer Group for Cohort-Based Training
Accelerator programs are cohort-centric. As such, you’ll work with a group of highly-skilled entrepreneurs and benefit from exposure to innovative thinking processes. First-time founders dipping their toes into the startup pool learn the nuances of starting a business, pick up valuable tips, and build contacts. One of the most significant sign-up advantages is the chance to network. You’ll connect not just with potential partners but also investors. You can approach these individuals when fundraising for the business, at the seed and later stages.
Several Resources Available
Entrepreneurs entering the startup accelerator program must exclusively commit three to six months of their time. Most available opportunities are on-site. This means that you’ll work in the organization’s office premises. For this reason, you’ll want to look for programs in your home city or state unless you’re open to relocating.
All necessary resources will be available. These include seed funding ranging from $50,000 to several hundred thousand dollars. While some of these programs are non-profit, others are owned by private entities. Private programs operate in exchange for equity in the new company once it is up and running. Once the business takes off, they’ll likely move on to supporting new entrepreneurs, while maintaining their stake without any other decision-making or voting rights.
Aside from funding and intangible resources like mentorship and knowledge, founders will also receive the infrastructure to develop a product prototype. You’ll get the assistance of a support team and exposure to actual customers. This way, you can collect valuable feedback and opinions on your product. As a result, you can make the necessary tweaks to develop a Minimum Viable Product (MVP).
Founders Can Hone Pitch Decks and Fundraising Skills
Through the accelerator program, entrepreneurs will learn to create a compelling and robust pitch deck. They will also hone their presentation skills and develop confidence when pitching to venture capitalists, angels, and other investors. Founders can test their mettle on “demo day” by presenting their pitches and product demonstrations to investors. If they are successful, they can acquire funding and take their company to the next level.
Simply by being in the accelerator program, founders raise their chances of getting funding. This is because investors know of the program organizers’ stringent pre-vetting and screening process. Furthermore, accelerators connect founders with a wide range of potential investors.
Getting into a startup accelerator program is the best way to build a business. You’ll get the necessary resources and assistance in prototype creation, training from expert mentors, and funding from investors. Repeat entrepreneurs who have successfully started and exited successful ventures and first-time founders who have yet to learn how the corporate world works can take advantage of these programs. So, research, determine the best program, and start.
Alejandro Cremades is a serial entrepreneur. His book, The Art of Startup Fundraising, is one of the best for entrepreneurs. It boasts a foreword by ‘Shark Tank‘ star, Barbara Corcoran and is published by John Wiley & Sons. As the title suggests, this book offers a step-by-step guide to today‘s way of raising money for entrepreneurs.
Most recently, Alejandro built and exited CoFoundersLab. The platform is one of the largest communities of founders online.
Prior to CoFoundersLab, Alejandro worked as a lawyer at King & Spalding. He was involved in one of the biggest investment arbitration cases in history ($113 billion at stake).
Alejandro is an active speaker and guest lectures at several prestigious Universities. These include the Wharton School of Business, Columbia Business School, and NYU Stern School of Business.
Alejandro has been involved with the JOBS Act since its inception. He was invited to the White House and the US House of Representatives to provide his stands on the new regulatory changes concerning fundraising online.