Startup accelerators: The industry and its current state in 2018
A new startup accelerator industry is taking hold throughout the entire world, providing entrepreneurs with access to resources and offering the financial support necessary to turn their startups into lasting businesses.
Now, this isn’t entirely new. By definition, startup accelerators are fixed-term programs that include connections, seed investment, educational components and mentorship, and they culminate in a public pitch event or demo day to accelerate growth and expansion. The first seed accelerator was Y Combinator, started in Massachusetts back in 2005. It was followed shortly by Techstars in 2006 and Seedcamp in 2007, among others.
Fast forward to almost a decade and a half, and startup accelerators have branched out to other parts of the world, often viewed as playing a key role in the growth and scaling up of entrepreneurial ventures. Asia — Singapore and Hong Kong in particular — has become a hotbed for such technological innovations due to its abundance of tech experts. As per CNBC, there has been a 117 percent increase in Asia’s total funding activity, and compared to its prior year’s numbers, this demonstrates an explosive growth. As a result, more and more accelerators are eyeing the region.
In fact, Entrepreneur First, a London-based startup accelerator, established a new office in Hong Kong last March. Speaking with CNBC’s “Squawk Box,” Entrepreneur First Singapore Managing Director Alex Crompton said, “The things that we see in both Singapore and Hong Kong [are] an extraordinary number of ambitious and talented people.” He then added that the advantage of the company’s business model is that it can take talented individuals “from being a person into someone who has something the best investors are willing to fund.”
By the same token, the U.S. has also seen significant growth within the startup ecosystems. In fact, the recent years have seen accelerators evolving from being simply business-service providers or investment vehicles to helpful operators within the public and private sectors. According to findings in the Global Accelerator Report 2016 by Gust, 579 accelerator programs have made over $206,740,005 worth of total investments worldwide in 11,305 startups. As per the report, the U.S. and Canada is the most active region when it comes to investments on a global scale, while Europe leads in terms of the number of startups accelerated.
With these numbers in hand, it’s clear to see that accelerators have indeed earned their place within the startup ecosystem, bringing together investors, entrepreneurs, corporations and public entities under the common goal of helping businesses quickly find stable footing.
One such accelerator is Digital Asset Monetary Network, Inc. (OTCMKTS:DATI) (DigitalAMN). Formerly known as Digital Arts Media Network, Inc., DigitalAMN operates as a specialized tech accelerator and uses the Public Accelerator-Incubator (PAI) model created by business management and development consultant, Ajene Watson. As a startup accelerator, the company provides startups with everything from startup capital to business development services.
Through the company’s “path of accuracy” strategy, DigitalAMN focuses primarily on entrepreneurial teams developing disruptive or cost-efficient sustainable innovations. Keeping cost low and estimated ROI’s high, DATI resembles former 90’s powerhouse incubator, CMGI (then, a public company); which at its peak had close to 100 investments, upwards of 20 subsidiaries, 5K employees, $1.5B in annual revenue and a market cap of $41B. DigitalAMN however, is considered even more progressive than CMGI could have ever been.
Where CMGI used a two-phase model — incubate, then invest — Digital Asset Monetary Network effectively uses a four-phase model to build and sustain the value of its equity portfolio. The four phases are: Accelerate, Incubate, Acquire, and Spin-off. After only officially launching in 2017, DigitalAMN already has seven portfolio companies, four client-companies and one strategic venture partnership.
Startups go through the entire process of getting traction: Working with DigitalAMN’s business development team, getting on a Top 10 DATI funded equity crowdfunding portal, receiving capital investments directly from DigitalAMN, leveraging the public markets though DATI and pursuing an initial coin offering through security token programs provided within the DATI ecosystem.
Provided with the right tools, anyone can succeed, and DigitalAMN has made it its mission, to help startups and development stage companies have access to the tools needed to quickly take root.
Last year, DigitalAMN took advantage of the steadily blooming cannabis industry through Fundanna, one of its portfolio companies. The first regulation crowdfunding platform exclusive for a range of ancillary cannabis businesses in the U.S., Fundanna lets people invest in cannabis companies that they believe in.
Likewise, DigitalAMN also announced earlier this year, taking a significant stake in truCrowd Inc. (owner and operator of truCrowd.com; one of the industry’s Top 10 equity crowdfunding portals). This relationship gives DATI the ability to raise startups money faster, with less intrusion from investors, all while marketing the company. This past July, DigitalAMN began leveraging its investment in truCrowd, with an investment in WorkDone; one of DATI’s new client-companies and portfolio companies.
As a truCrowd issuer, WorkDone is an artificial intelligence platform catering to small and large businesses that want to optimize workflow and increase productivity by removing time-consuming repetitive tasks performed by humans. The goal of the company is to maximize opportunity by replacing countless hours of low-value busywork with more meaningful assignments by incorporating machine learning, content analytics and blockchain technologies.
By continuing to create countless opportunities for emerging companies, DigitalAMN steadies itself as an innovator in the corporate acceleration and incubation arena.
Since the founding of the first accelerator in 2005, the industry has seen immense growth both in and out of the U.S., giving thousands of entrepreneurs access to expertise and capital that can help jumpstart their business. With specialized accelerators like DigitalAMN laying the groundwork and continuously creating opportunities for its related ventures, it will be interesting to see what changes the industry will go through moving forward.