Accelerators are Dead, Long Live the Accelerator
Startup accelerator programs have been around for a long time, but they have recently gained significant traction; so much so that they are now an essential part of the startup landscape. It is, therefore, perhaps not surprising that we at Porsche decided to build an accelerator program with our partner Axel Springer.
Today’s blog post is about the importance of accelerator programs, our decision to partner with Axel Springer, which makes our program different from others, and how we help startups reach the next level. I’m Robert, Project Manager at Porsche Digital, and I would like to introduce you to APX, the early-stage startup investor and accelerator by Axel Springer and Porsche.
APX in a nutshell
The strategic interests of Axel Springer and Porsche are very different, as both companies are active in different markets and have different customer targets. That’s why APX doesn’t invest strategically. The only ambition is to find and support great teams with fast-growing digital business models. In other words, we provide shortcuts that allow our startups to reach their goals even faster.
The state of acceleration
The concept of accelerator programs emerged about 15 years ago. In Germany, in particular, accelerator programs are usually very closely tied to the strategic interest of its corporate shareholders. While a strategic investor in the pre-seed stage might have some advantages and synergies for an early venture, an investment (and thus a shareholding) of a potential acquirer in the early stage of a company’s lifecycle is mostly perceived negatively by venture capital investors. And that can harm the overall equity story and the potential to build a big and impactful company. Combined with a usually expensive deal (relative to the current market terms), a classic accelerator program may not suit every founder’s need.
Today, there are plenty of opportunities for early-stage founders to get funding and support, but what makes a good investor? In my opinion, he is interested foremost in building a strong business, rather than achieving strategic corporate goals. Despite the fact that “cash is king” — especially in the very early stage — an experienced early-stage investor who has an aligned interest with the founder is often worth the tradeoff of skipping a purely financial investment from inexperienced investors.
Eliminating the blind spots
In order to make a qualified decision in this regard, founders need to find out what type of business they are striving for and what “success” exactly means for them (individually, long-term etc.). Moreover, the founding team should be very well aware not only of what they know and are capable of; but more importantly, of what they do not know and are not capable of, yet. Only by eliminating the blind spots, founders will be able to make the optimal decision in the search for the right early investor.
When to choose an accelerator and how to tell if an accelerator is up-to-date
Founders need to explore existing opportunities among their peers. If you as a founding team already have all the support (money, advice, access) you need, just go for it (without any kind of accelerator). In case you fall short in some areas, an accelerator that perfectly matches your agenda is still a very good choice in order to really achieve your goals. An investor is especially “up-to-date” if…
- …it enables founders to make better and faster decisions, which they probably would not have been able to make without the accelerator
- …it enables founders to avoid mistakes that they potentially would regret further down the road (especially in fundraising)
- …it provides founders easy access to relevant players for their journey whom they otherwise would not have met
- … gives you the right trust and credibility in both the VC market as well as your specific industry in order to start at pole position
APX’s new approach
Based on the experiences of the predecessor “Axel Springer Plug & Play” and on the convictions of its two shareholders, APX does a few things differently.
Two key differences are as follows:
- APX does not work in batches. As a financial return focused early-stage investor, APX is constantly looking for the next big thing. This requires higher flexibility in investing than conventional programs can offer and a better understanding of the actual need of successful entrepreneurs, who generally are not willing to wait for the next batch to start.
- APX does not offer a fully standardized program. The Venture Development team works with each startup individually to address the specific challenges that are most important and seeks to find the best solutions and shortcuts for each challenge. This includes making the right intro at the right time.
What are the success factors of an accelerator?
1. Network, network, network
One key advantage an accelerator should offer is a strong network. This includes opportunities that would otherwise not be available to founders. These opportunities should be made as low-threshold as possible. The network should be vast and rich in opportunities. On top, the network should be wisely maintained and continuously extended. Jörg Rheinboldt, founding managing director of APX, has written about the power of networks here.
2. Accelerate means “faster!”
Entrepreneurs need to quickly find out what is best for their business and take responsibility for it. Accelerators should create an environment that promotes this mindset. Communication and support should be managed in a very efficient and result-driven manner.
3. Follow on — What’s next?
The program itself is one thing, but what is going to happen after the program is even more crucial. The clearer an accelerator is able to explain the “afterward”, the better. Founder and accelerator should know as concretely as possible how and under which conditions they will proceed in the long run. The accelerator should provide access to top-class investors who will be able to drive the startup to the best exit scenario possible. Looking at the existing portfolio and co-investors helps to make qualified due diligence of whether the respective investor has the right network and credibility in the VC space.
If all of this convinces you as an ambitious founding team and you want to join the APX family, please apply here: https://apx.ac/looking-for-funding/
Robert Martin is Manager Venturing at Porsche Digital.
About this publication: Where innovation meets tradition. There’s more to Porsche than sports cars — we’re tackling new challenges, develop digital products and think digital with focus on the customer. On our Medium blog, we tell these stories. It´s about our #nextvisions, smart technologies and the people that drive our digital journey. Please follow us on Twitter (Porsche Digital, Next Visions), Instagram (Porsche Digital, Next Visions, Porsche Newsroom) and LinkedIn (Porsche AG, Porsche Digital) for more.
