Product launch ☑
Incredible team of founders ☑
Traction with customers ☑
…Congrats! You’ve launched a business, built a product and are now beginning to focus on finding product market fit, scaling and fundraising. In examining how to scale, your team might be considering participating in an accelerator program. Once dubbed a fad, accelerators are playing an increasingly important role in the global startup ecosystem and have become the standard in helping early-stage companies scale. However, not all accelerators are created equal. Here are some key factors to consider when choosing the right fit.
Program Size + Engagement:
Programs are built with different focuses and the class size and location are two important drivers of your experience. A larger class size can be valuable if you are laser focused on leveraging key elements of a program or interested in higher-level content and don’t necessarily need individual advice. Smaller classes are helpful for more 1:1 time with program directors and managers, but these smaller programs may have smaller mentor networks or less network access. Beyond program size there’s program engagement, i.e. is it a full-on in space experience, a virtual program or something in-between? Again, founder preference here is largely based on what you want out of the program — if it’s rifle-shot strategic advice or introductions then virtual or part-time works, if it’s a community of like-minded founders and a more immersive experience then an on-site program is best.
Quality of Content:
Some programs are content heavy and will run classroom style sessions and panel events covering business 101s: Product Market Fit, Data Science, Sales & Marketing, VC fundraising and more. Other programs focus solely on connecting companies with strategic go-to-market partners. When opting for a content heavy program, it is best practice to prioritize in showing up for sessions/events that fill information gaps in your operations as you simply will not be able to attend all. Reviewing curriculum, researching session leads and talking to alumni founders are all very insightful ways to get a sense of programming and rate quality of content.
Accelerator Deal Terms:
Without getting too deeply into deal terms, at a high-level you want to make sure that the program investment is meaningful enough (in cash or strategic value) to produce an ROI and bridge you to your next milestone. Core terms are investment amount, valuation, structure and other benefits like space, strategic partnerships, etc. If you are cash-strapped with limited initial support, then a cash investment is important — if you’re in an expensive market perhaps free space is attractive, and if you’re vertically focused then that strategic introduction might be priceless even if comes with $0 investment. Programs provide everything from cash to free space to strategic introductions, but there is a cost to your time and resource investment that you should weigh carefully.
Strategic Partners and Mentors
Who are the LPs, corporate partners, and mentors and how do they fit into your growth strategy? It’s important to also understand the level of commitment of various corporate partners — are they logos on a website or living, breathing mentors + partners. Best way to diligence value add is to ask to talk to past accelerator participants and point people at the corporate partners.
For instance, one of our more veritcally focused partners here at at NVP is RWJ Barnabas, the largest hospital network in NJ. RWJ’s partnership is extremely valuable to our healthcare IT companies who often leverage this relationship to run pilots.
Access to VCs & Angels
The goal is to increase your chances of getting funded post accelerator by increasing your network of VCs and Angels. In addition to introductions during and after programs to VCs and Angels, credible programs should prepare you for these meetings by hosting pitch practice sessions and working with you 1:1 to refine investor deck. It’s also up to you to vet the ability of your accelerator to make these intros, so don’t be shy about asking which firms have funded their previous companies.
Although your team is amazingly talented, your resources are thin and you a lot of operational help!!! Many programs will (and should) give functional support by providing business associates, designers, developers at no additional cost to you. These associates help with a number of projects ranging from sales & marketing strategy, development, to UI/UX. #allhandsondeck.
Do you still get to keep your office space, get additional funding, access to partners, VC, & alumni network? Find out! These benefits will sustain your growth. It also helps to have a community of founders to reach out to for support. A good way to gauge community dynamics and post-accelerator benefits is to work out of the co-working space for a day and talk to founders in the office.
There are probably (definitely) other items to add to this list, but taking these into account while doing some homework will ensure (95% chance) that you find the right fit. Do your diligence, just like the accelerator teams are diligencing your company. At the end of the day an accelerator is an investor (in most cases), and you should consider who is making the investment, who will be spending time with you during the program and how those people have done with other companies in the past. Now go!
Thoughts, comments, and shares are welcomed :)
NVP Labs is a next generation program, which leverages leading corporate partners including Audible (an Amazon Company), Prudential Financial and Dun & Bradstreet and many more to help scale our companies. Startups in the program receive a $100k initial investment plus $100k in follow-on capital, mentorship from corporate partners, and access to a brand new 25,000 sq ft. co-working space located in the same building as Audible’s global headquarters in Newark.
We focus on attracting leading entrepreneurs to Newark to build distinctive businesses while catalyzing development in the technology ecosystem of the city. Interested in joining our fall cohort or have a company to recommend? Applications are currently open and will close on Sept 8th.