With so many accelerators out there, how do you decide where to apply? How will you know which one is best for you? Let’s go through some of the main points that you should consider while making this crucial decision.
Although there are accelerator programs for scale-ups and later-stage companies, normally it is the early-stage startups that are looking for accelerators, especially ones with investment capacity and growth potential. Moreover, accelerators are commonly perceived as first serious investors that believe in a startup’s success. So one of the first questions to ask yourself, when looking for an accelerator, is at what stage you are in your startup journey and then consider your current struggles, goals, expectations and use them to find “the right fit”.
If you’re looking to enter a new, unfamiliar market, an accelerator could be a helpful gate opener. It connects you with business experts, who know the market inside out and are more than willing to help you. It's also important to consider the target market before choosing the accelerator for your startup. The right choice can make or break your goals.
If however, you are on the lookout for some target clients, especially enterprise-level, going to an accelerator that is sponsored or supported by one of your top desired clients could be a good way to get yourself noticed. For example, if you are a fintech startup, focus on a program that is run in a partnership with a major bank or other financial institution. While struggling especially with fundraising, search for accelerators that have wide investor’s networks and provide financing themselves.
Let’s start with expectation management. Think about the reason why you actually consider jumping into an accelerator? The first thing coming to your mind should be - to grow the knowledge and network. It is a no-brainer for equity-free accelerators, however, in the case of accelerators that do invest in their startups, investment deals are rather standardised and you would give away up to 10% of your equity for investment around €50K. So if you are there only for the money - you should consider looking for a business angel investment instead. Lately, we also see a lot of startups willing to negotiate the deal and boost valuations. Just a note - there’s a reason most accelerators have that standardised, and unless a startup has significant traction or a previous investment round, there is not an objective reason to negotiate a higher valuation.
Instead, make sure the accelerator has the capability to do follow up investments. Check the track records in their startups’ portfolio: amounts, times, geographies. During the program, remember about building trustworthy relationships and really moving your business forward, showing the right growth and traction to deserve the follow-up investment.
Remember, join an accelerator to expand your know-how and get the business support. But how to find the one?
Firstly, check if the accelerator understands your vertical. A cybersecurity startup will get little value out of an accelerator that mainly focuses on manufacturing. See which startups from your field have gone through the accelerator and in which countries they’re operating. If possible, connect with them - ask about feedback on their experience.
It’s difficult to find an accelerator program that is 100% tailored to you. Each startup finds itself in a different phase- some of them are just starting out, some are looking to expand to new markets, some are scaling up. In order to feel satisfied, you should take the number of one-to-one sessions the program offers to you as an important factor.
Besides checking the startups portfolio go through their list of mentors. Picture how each of them could be beneficial to your growth. Also, try to understand how active they are throughout the accelerator program. Not much help from a nice photo of a mentor on a website, who you never get to interact with, right? Another factor you should think about is the involvement of C-level executives. It might not always be crucial, but it’s definitely worth considering. Just ask the accelerator you are interested in directly - how they can support your growth.
What happens after the program? Do you just pack your bags and say goodbye? While it happens in most cases, you can’t let that happen! Both sides should be involved in a long partnership till the next big investor comes in place. The mentors don’t become irrelevant the minute the program ends. You should stay in touch with them so they can support you afterwards as well. At Startup Wise Guys (SWG), we encourage startups to build long-lasting relationships with mentors and we've seen many cases, where that grows into employment, advisory board positions, angel investments and friendships.
Likewise, we provide a rather hands-on “after-care program” that includes regular check-in calls with C-level experts and on-demand help with fundraising, legal, and very often just friendly advice in HR, recruiting, scaling etc.
A good startup accelerator also has an active alumni network of founders, which holds extraordinary power and P2P support. These are great spaces for making new connections, sharing experiences and asking for advice. We have more than 400 founders in our portfolio and the majority of them are active in our alumni community. Apart from day to day advice and knowledge sharing, a special highlight for us is the annual alumni event, where we try to bring the whole community what we like to call “SWG family” together.
So when choosing an accelerator, determine how important a network of mentors, fellow founders and investors is for your startup.
After analyzing the accelerator, take a look at yourself and your team. Do you think it’d be a good match with the accelerator? All aspects mentioned above matter, of course, but if there’s no chemistry between your and accelerators’ team, is it really worth it? You will be working with them day after day for an extended period of time - make sure you are all on the same page. They should push you out of your comfort zone, but also support you and be there for you when things get tough.
It’s not easy to find a perfect match, especially the first time round. Before choosing, just consider what you value the most and do solid research. Also, don’t be afraid to try and make a final decision. After all, fortune favours the bold.
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