Accelerators come in all shapes and sizes and are dotted all over Europe, on the lookout for the next big thing.
Startups join accelerators for many reasons: to receive funding, meet investors, access clients, find product market fit and receive mentoring.
Over the years I have been through all of them: the free and the paid for; those delivered by a corporate organisation or a well-known global brand and those businesses set up to help — and in some cases exploit — the startup ecosystem.
Recently I spoke to a serial founder who said he wouldn’t join another accelerator as he found them useless and had had his nose, and a hole in his wallet, burnt a few times — now he can’t trust them!
Here are some things I wish someone had told me to look out for from accelerators, especially before shelling out money.
So here goes.
Be wary of accelerators you have to pay for
I’ve had more negative experiences in accelerators that I’ve paid for than in the ones that are free. Are paid-for accelerators a rip off and there to exploit naive early-stage startups? Yes, maybe and no.
I thought joining an accelerator would help me get funded — and I suspect most founders are as naive as I was. Accelerators’ marketing teams tell startups that they have a better chance of getting funded through them — especially the accelerators that charge a fee.
“Some [accelerators] just want our money.”
I wish someone had told me to think of accelerators as businesses, rather than a shining knight there to nurture startups scrabbling around for help, so they have the best opportunity to succeed. Some just want our money.
Accelerators are businesses and they have a bottom line. Free accelerators are generally funded through grants and corporate funding, while accelerators that charge a fee are pure profit organisations.
Looking back I didn’t even think for one second that they were a business. Today I would look at their motivations and use that as a guide, especially when deciding if to part with cash.
Don’t fall for their marketing
Accelerators are good at shouting about how great they are and backing this up with amazing stats. It’s easy to get swept away with the whole bells and whistle show and feel special for being one of the “lucky few” to get in. Before you know it you are sucked in — I certainly was, not once but twice!
Here are some of the dazzling stats that have been thrown at me — and some of the questions I wish I had asked in response:
‘Hundreds of startups have been through our accelerator’
Wow — but what does this mean? Can I speak to past cohorts to get a better understanding of their experience?
‘Startups have raised loads of money after attending our accelerator’
Brilliant! But how much of this can you attribute to the accelerator — and is this a true figure?
‘We have heaps of industry contacts’
Great! How many startups have had access to these organisations and if so what kind of support have they given?
‘We have great speakers on our books’
Who are they and have they actually had experience in the startup world?
‘We have access to world class mentors, who’ve been there and done it!’
Who are they and have they really been through the trenches? What real startup experience do they have?
‘Our investor network is second to none’
It’s great having an Excel list with hundreds of names but how many are active early-stage investors (pre-seed)?
‘We’ll stay in touch after the accelerator and open up hundreds of future opportunities’
How will you keep in contact with me once the accelerator is finished and how many events per year will I be invited to?
‘Investors will be queuing up to speak to you at our fantastic demo day’
Can I see some past attendee lists and see how many startups actually got investment? (Sometimes demo days can be full of venture capitalists simply there to tick a box.)
But accelerators are not all bad. I’ve had many positive experiences too — mostly with free accelerators.
So what does a good accelerator look like?
Great accelerators can be a big boost for your business.
“Great accelerators coach and nurture you.”
They coach and nurture you. Rather than focusing on the business (and yes, you do need this), they help you be a better leader and develop your skill set, which in turn empowers you and gives you confidence to help bring your vision to life.
They connect you with not only your peers but with the right mentors as well as industry connections. They build communities and help facilitate this.
They talk about the impact the accelerator has created and are humble in how they talk about themselves, focusing on the people on their team. They tap into the wider environment and have a diverse setup with people from all backgrounds.
One of the biggest signs of a good accelerator is that the team is approachable, always willing to help and answer questions, and there to be a shoulder to cry on and give you that pick up when you need it.
So the question is, is it worth paying to be part of an accelerator? For me, no.
Stick to free accelerators — and remember to ask the questions above.
Our secret founder is the chief executive of a UK-based fintech. Want to share an opinion anonymously? Email us.