When Startup Accelerators Work
Much has been written about startup accelerators and the impact they have. For better or worse, so much of what is written is done so by people who have little to no inside experience with or knowledge of the mechanics behind an accelerator program.
This post is written by someone who has seen both sides of an accelerator program — as a founder having gone through a program and most recently having spent the last 2.5 years running one of the top accelerator programs.
First, a quick story about what happens when startup accelerators work, the impact they can have and why the success of a startup accelerator program is measured by setting goals that should by definition take years to achieve.
ChartSpan is a healthcare technology company that was founded by two brothers. One was a successful entrepreneur living in Texas, the other was a healthcare professional practicing in North Carolina. When they decided to launch their startup — they did so at the Iron Yard Ventures accelerator program in South Carolina — a dot on the map between Texas and North Carolina.
What started as a two person startup at the beginning of the accelerator program in 2013 has now become one of the fastest growing technology companies in the southeastern US and is about to grow even larger.
The company itself has changed since they entered and graduated from the accelerator.
After several starts and stops on their original product as well as some team changes, the company has now outgrown their third office in an many years and employs over 20 full-time employees. The team has grown, fought, survived and hustled long-enough to find their hockey stick of product market fit.
As a result, ChartSpan last week announced plans to hire 300 new employees, build out a new 100,000 sqft corporate HQ on Main Street in downtown Greenville, SC (their hometown since the accelerator program) and closing on a new round of venture financing.
Some people say there are too many accelerators — and I agree with them in some ways. In other ways, the impact and importance of accelerators is just beginning to be realized and success is all about perspective. ChartSpan is a clear example of what happens when an accelerator program works by always putting the founders first.
As the world economy moves away from industrial-era career paths towards an “everyone is an entrepreneur” workforce, great startup accelerator programs can and should be a replacement for the traditional business education.
Four years ago The Iron Yard’s accelerator program (now Iron Yard Ventures) kicked off in Greenville, SC as a new investment and mentorship program for startup founders focusing on solving the capital gap for early stage technology companies in the Southeast US. The Southeast, perhaps more than other regions in North America, is underserved by early stage and institutional funding resources.
Since launching in 2012, many, not all, of the startups that have completed the Iron Yard Ventures accelerator programs have gone on to achieve successes. Based on internal goals, the program has outperformed expectations for a startup accelerator program founded in a state with no formal seed investment fund.
By no means has our program seen the scale and financial success on the level of YCombinator or Techstars — nor has that been our goal. Both are great organizations which, like Iron Yard Ventures, place a heavy focus on helping early stage company founders. I have a tremendous respect for the people behind both YC and Techstars as well as other great programs for startups.
However, our little portfolio of more than 50 companies has quietly begun to really take off in terms of economic impact as well as financial metrics. Iron Yard Ventures companies have hired hundreds of well-paid employees, raised millions in follow-on venture funding and continue to have a tremendous impact on the communities they are a part of.
And that is what happens when startup accelerators work.