Accelerators — How to get in and make the most of the experience

All startups finance their early days through money from friends and family, right? Wrong! Grasshopper’s Friends and Family virtual event series was created to shed light on the other ways that entrepreneurs can fund their dreams. This is particularly important for founders of diverse backgrounds whose communities may not be able to fund them. For instance, the net worth of a typical white family is nearly ten times greater than that of a Black family, according to 2016 data from the Pew Research Center.

Grasshopper Bank is committed to leveling the playing field and providing more founders with the support, information and connections they need to excel in their startup journey. There are many paths to entrepreneurship and we hope you’ll join us as we explore them throughout this series.

The focus of our most recent Friends & Family event was on accelerators. Three wonderful guests who have a variety of accelerator experience joined us to weigh in — Micah Kotch, Managing Director at URBAN-X Accelerator that works with startups reimagining city life, Greta McAnany, Co-founder of Blue Fever, a company on a mission to create an online space for teen girls that increases belonging and builds resilience, and Kristen Mashikian, Head of Sponsorships at Envision Accelerator, a student led and built accelerator for student entrepreneurs of diverse backgrounds. With them, we discussed how to choose an accelerator, how to get into one, and what the future of accelerator programs may look like. Three key themes arose throughout our conversation: Ask questions, be transparent, and don’t make decisions based on “the norm”. Read on for more or catch the full video here.

Choosing an accelerator program

There are a lot of programs out there for startups and anyone who’s considering joining an accelerator should be sure to know the difference, Micah tells us. Central to an accelerator is a value exchange — experience for equity. You can also find mentor-led programs, or partner-led programs, each of which offer different experiences. There are also programs out there that might give founders pause, such as corporate accelerators, some of which have been accused of stealing ideas. If you’re wondering how to choose the accelerator that’s right for you, all our guests were in agreement that you should talk to founders who have worked with the investors involved. Greta says she saw accusations about Amazon’s Alexa program in the news while her team was applying. She was transparent with the managing directors about her concerns. It spurred Amazon to ask more questions internally to ensure there were no conflicting products being developed. Greta suggests, “Instead of being worried that you’re not getting in because you’re calling something out, think of it as being a leader and defending your business”. Greta’s team did their due diligence, didn’t rush, and it paid off. They got into the Alexa accelerator and had a great experience. It’s not a race. Micah even tells us, “We’ve had founders who’ve been in touch for years before they’re ready to apply”.

Winning your bid to join an accelerator

One of the most critical components of business success, including getting into an accelerator program, is great communication skills. Being able to provide good updates about your business over time means that you can keep in touch and decide when the time is right to join an accelerator, raise your next round, or make a new hire. Kristen points out that traditionally, getting into an accelerator has been about who you knew, which put diverse and younger founders at a disadvantage. With the resurgence of the Black Lives Matter movement, plus the need to maintain physical distance due to COVID-19, these long held paradigms are changing and more diverse founders are getting more opportunities to tell their stories. To do so effectively, founders should understand who they’re pitching to. Find out who the investors involved are and ask yourself what they care about, what their life experiences are like, and take a look at the companies in their portfolio. To win, you’ll need to be able to tell your story while tailoring your narrative to your audience. This is of particular importance when pitching an investor on an idea they may not have direct experience with. In such an instance, you may want to rely more heavily on facts than on cultivating empathy, Kristen says. Greta suggests, “Find someone good at storytelling who looks and thinks like the person you’re trying to convince”. Tailor your story, but maintain your integrity, all speakers agreed. Be truthful about what you’re looking for in an investor and the right one will come along.

The future of accelerators

Our guests emphasized across the board that the “right investor” will be investing in you and in your team. They don’t expect you to know everything already — the point of an accelerator is to learn and to build fast! The current circumstances around COVID have forced a lot of accelerators to move online which, on the up side, offers opportunities to those who may have been unable to attend otherwise but on the down side, makes it harder to replicate the camaraderie of an in-person cohort. It’s certainly not all bad, but it’s important to ask yourself what you’re looking to gain from joining an accelerator. “We now have something to look forward to when we meet in person when it’s safe,” Greta offers optimistically. The pandemic has also encouraged many students to take a gap year and, as a result, we’re seeing an influx of fresh ideas in the startup economy. Further up the capital stack, we’re hopeful that we may see investors who’ve come to appreciate that work life balance looks different for everyone and who recognize that being “all in” can’t always mean quitting your day job. Looking forward, founders may be more comfortable being transparent with potential investors about how they balance their time. Kristen makes a great point that the ability to choose is a privilege that not everyone gets to enjoy. We’re now starting to see companies throughout the capital stack pledge to be more inclusive of diverse communities. In fact, Kristen’s student accelerator program, Envision, was founded to offer capital and mentorship to underrepresented entrepreneurs in response to the disparity seen in our industry. As a society, we are facing dire circumstances that have been compounded this year and we have a lot of work to do. Through the hardships, we’ve also been given an opportunity to see things from different perspectives- across different nationalities, races, vocations, socioeconomic circumstances, genders, and more. If our community collectively opens our minds to these new perspectives, the future of accelerators has a LOT to gain from it.

Thanks so much to our guests Greta, Micah and Kristen for their wisdom and insights. We hope you feel empowered to look at accelerators as a value exchange, to make sure you find the right fit when considering them, and that you’ll help shape what the future holds for these programs.