Why we joined Techstars and Seedrocket accelerator
And what we learnt from them
- Why did we join the Techstars Barclays Accelerator in London?
- Why did we join seedrocket accelerator in Barcelona?
- Six KEY learnings
- Three myths about accelerators
1. Why we joined the Barclays Techstars Accelerator
Techstars is one of the leading global accelerators. Their numbers speak for themselves:
- 1,333 companies accelerated (currently growing at more than 1,000 per year)
- $4.9 billion in follow-on funding for portfolio companies
- $12.5 billion in combined market cap
Here are some of the reasons why we joined the Techstars program in collaboration with Barclays:
Access to funding: because cash is King
In NoviCap’s case, Techstars has been a very committed investor during multiple phases. The first ticket they write allows you to extend your runway throughout the program. Techstars also has a follow-on fund that can invest in follow-on rounds after the program.
Demo Day, the culmination of the acceleration program, is the perfect occasion to present your startup in front of hundreds of venture capitalists (VCs). This is a once in a lifetime opportunity that will pave your path for the future VC meetings and jumpstarts your seed round process.
Lastly, capital comes in various forms and, when it comes to Techstars as investor, the monetary part has always been secondary. Having a founder-centric investor as Techstars on board is certainly the best you can do for your cap table.
Brand: opens doors and closes deals
Yes, brands also matter in the tech startup world. The program gives you a quality stamp that will help you in many ways: readily get in front of VCs, close deals with partners, access valuable perks/discounts, etc.
Today, more than 3 years after the program, when we meet new investors they still take note of the Techstars brand in a very positive way. Those guys from Boulder have built something that lasts.
Mentoring: a complementary co-founder from day 1
Techstars runs about 50 (corporate) accelerators globally. We specifically selected the program with Barclays because it gave us access to 100s of hours of mentoring and raw product feedback from senior banking executives. This allowed us to tweak and redefine the business model and product swiftly. Barclays was the complementary co-founder that completed the founders’ tech background. In addition, we continued collaborating with Barclays after the program and still have access to key decision makers and the banking services we require.
And mentoring does not stop after the program — on the contrary! We are still in monthly contact with some of our favorite mentors who keep advising us on everything from legal to culture. We join the annual Techstars meetup (called Foundercon) and frequently consult the Techstars partners (David Cohen and Ari Newman). Greg Rogers, who originally started the Barclays program and now a partner at Techstars, joined NoviCap’s board last year.
Lastly, Techstars’ #GiveFirst and #DoMoreFaster values are still deeply rooted in everything we do today. Because culture is a topic on its own, I will elaborate in a separate post how #GiveFirst allowed us to win deals or teach at some of the leading business schools.
2. Why we joined the SeedRocket Accelerator
SeedRocket is one of the most successful accelerator programs in Spain. NoviCap was part of their Barcelona 2014 cohort and won the first prize :). In our case, it was a very helpful experience to jump-start NoviCap in Spain, our initial market. Here are some of the reasons why we joined SeedRocket:
They don’t ask for equity
As simple as that. Many accelerators ask for equity in exchange for not much.SeedRocket is equity free and will work hard to prove its value-add. Its business model is to offer a small cheque after the program and it is up to the entrepreneur whether to accept it or not. We did, and so did many other now successful portfolio companies.
Track record of success stories, now we are one of them
Always do your homework. Before joining an accelerator you should speak to alumni, both successful and unsuccessful companies. Try to understand how they helped in good and bad times, and what value they got out of the program. This exercise is also very helpful to understand the process “how to apply and get in”.
Amazing mentors
SeedRocket mentors are some of the most successful business angels and entrepreneurs from in Spain. We can’t be thankful enough for all the help we received from Jesus Monleon (one of the founders), François Derbaix (founder of Top rural, indexa, etc.), and many more.
Great office space
As part of the program (and winning it) we received complimentary office space in their Barcelona offices for our first months. This was very useful to gain exposure to the tech ecosystem in Barcelona and provided proximity to mentors who regularly visited their offices. (And helps to increase your runway 🙂).
“Easy” access to funding
Only 2 months after the program we landed a small angel investment from a group of 8 SeedRocket mentors. The investment was structured via an SPV to keep our cap table lean and came at favorouble, founder-centric terms. This cheque extended our runway until we raised our Series Seed (more about that in following posts!). SeedRocket has expanded quite a bit since then and now invests from a fund.
3. Six Key learnings
- Don’t give equity, unless you receive a lot in return. When I say a lot, I mean A LOT. At least you should get a decent investment for the stage you are at (120k from Techstars for example), a 3 month program (not one week), office space. etc. Also be aware of how much you give out: always below 10% and ideally below 5%.
- Know your objective: joining a program just to get office space is probably not a good reason. You should know your objectives and what you want to get out of the accelerator experience. This exercise will also help orient you towards the right accelerator (if you need one).
- Get the most out of the program: joining an accelerator is a full-time commitment and you should be prepared for that. You shouldn’t be a tourist, you are there to make life-long relationships. Don’t skip any parts of the program. Over-prepare.
- Get the most out of mentors: mentors join the program for a reason. Reasons can be many and include access to deal flow, give back, because it is (much) more fun than their day job, corporate innovation, etc. Find out what it is and build momentum around what drives them. Mentors will want to learn from you too. Play the reciprocity game and apply #GiveFirst.
- Negotiate: there is nothing such as “standard” terms or a “standard” contract. Negotiate the conditions under which you join a program if you believe they are not fair.
- Do your homework: talk to alumni and do your research before embarking on a program.
4. Three myths about accelerators
- If you are experienced you don’t need accelerators: This is not true, you can see this in many successful entrepreneurs who join accelerators such as Markus Ament. He is the founder of 3 start-ups (including Taulia, a fintech unicorn) who just joined the SAP accelerator with his fourth start-up Centrifuge
- You need to go through an accelerator to be successful: Just look at some examples of companies that didn’t go through one -> Facebook, Twitter, Instagram, Tumblr, Foursquare and many more
- “Just the money we get is a good reason to join”. I have heard this sentence many times and I completely disagree. The money is probably the least important reason to join. The network, the friends, the competitive environment, the help in fundraising are much better reasons to join one.
What is your experience with accelerators? I would love to hear your thoughts in the comments below!
