For entrepreneurs seeking an additional boost of support, accelerator programs are effective packages that provide important resources such as seed investment to gradually develop the venture out of the infancy stages, mentorship to provide effective feedback and a source of knowledge, as well as a working space and networking opportunities among other entrepreneurs and industry figures.
There are also opportunities such as demo days for entrepreneurs to prepare a presentation and pitch to angel investors, providing a valuable learning experience and evaluation of a business’s appeal and financial prospects. This is also a great chance to meet investors in person and expand professional networks.
Accelerator programs are very competitive, with some of the top names like Techstars having an acceptance rate of one to two percent. They gauge several factors like their potential ability to exceed standards and the viability and creativity of business ventures with respect to their particular markets. Of course, the team behind the vision is likely to be the most scrutinized factor by accelerators with an eye out for promising talent and business ideas.
Startups who remain standing will benefit immensely from an intensive curriculum aimed at providing professional business consultation and access to valuable resources over the span of around three months.
Pioneers in the sector
While there are many accelerators to choose from, there is a handful who have become well known for their abilities to maximize the potential of startups looking to make their mark.
Silicon Valley-based Y Combinator, having contributed to 192 exits through 1,834 investments, is one of the premier names in the accelerator business. Twice a year, the Company invests $120,000 in various startups in their search for shining stars, who are then relocated to Silicon Valley for a three-month intensive program, aimed at helping develop a businesses foundation to produce a successful pitch to investors.
An accelerator’s expansive network continues to provide support, long after the program is complete, with startups benefitting from the ability to make lasting and beneficial relationships in the sector. Y Combinator has worked with companies with a combined value of $100 billion, featuring well-known brands such as Airbnb, Dropbox, Stripe, and Reddit, to name a few.
Another familiar face hailing from Silicon Valley is 500 Startups, a seed and early-stage venture capital firm who has helped fund startups like Udemy and Credit Karma in over 60 countries. They invest $150,000 for a 6% equity stake and provide a four-month seed program that has resulted in exits including purchases by Google and Rakuten.
For startups further along the path to establishment, 500 Startups offers a Series A program that provides $100,000-$250,000 in funding.
Plethora of options
Techstars is no stranger to the accelerator game, having played a pivotal role in the development of over 1,000 companies, with a total value in excess of $8 billion. Through corporate partnerships, they provide mentorship and business development opportunities with industry experts.
They also run startup weekend and startup week, which are programs aimed at immersing entrepreneurs in an environment built to spur growth and learn how to launch an idea into fruition within a few days. 300 standout startups are selected to join their three month accelerator every year, benefiting from a massive network of over 10,000 mentors and 300,000 alumni.
With 51% of investments funneled towards early growth in pre-seed ventures, Plug and Play managed to successfully create 8 exits in 2017. They invest in over 260 ventures every year, having accelerated 426 in 2017. Their portfolio brands have managed to raise over $7 billion, with their venture team funneling anywhere between $25,000 to $500,000 per venture.
Plug and Play aims to invest in 30% of accepted startups and doesn’t require an equity stake to get involved in their program.
MassChallenge runs accelerator programs throughout many corners of the world, resulting in the creation of over 60,000 jobs in countries such as Israel, Mexico, Switzerland, and the UK. They also have the distinction of being non-profit and do not require an equity stake from their clients, while also routinely gifting annual prizes to provide further assistance to startups on the rise.
Select startups also receive an invitation to a one-week boot camp, where industry experts provide their knowledge and insights as mentors through workshops and trainings, aimed at expediting the growth of budding startup enterprises.
Innovation in the sector
Another program building significant buzz is Digital Asset Monetary Network, Inc.(OTCMKTS:DATI)(DigitalAMN), which provides a revolutionary Public Accelerator Incubator (PAI) model that allows accredited and non-accredited investors to access a wide variety of perspective startups.
PAI dramatically increases the opportunities of a startup receiving the funding needed for success, as it allows angel investors to access liquidity within 2 years, when it normally can take several years to do so. This serves as a very strong advantage for investors who are able to invest with more confidence and less risk in some of the most promising startups, on the search for the next unicorn.
DATI also helps provide crowdfunding access to startups seeking funding, as they own an equity share of FINRA member equity crowdfunding platform truCrowd. They arranged for financial and legal support to WorkDone Inc., funding initial costs for their crowdfunding campaign as well.
DATI continues to search for tech startup prospects, effectively funneling capital towards startups through a large range of options for investors of all types. The model is also aimed at alleviating the symptoms of the commonly disenfranchised investor, who is unable to get involved with larger opportunities.
Entrepreneurs seeking capital and opportunities for growth will benefit massively from startup accelerators, with a proven resume and extensive network to help business grow and successfully exit. With many solid options available, along with the emergence of innovative brands like DATI, funding and business development provisions have never been more accessible.