Is the startup accelerator industry saturated?

An quick look at the accelerator industry

Over the last 15 years, we have seen the inception and rapid growth of the startup accelerator industry. Within this time, accelerators have become a crucial piece of the innovation ecosystem — they provide founders and startups with the resources they need to succeed. However, as the industry continues to grow, the value of these accelerator programs comes into question.

What is an accelerator?

There are many, many different definitions. I’m going to go with the Seed Accelerator Rankings Program’s: fixed term, cohort-based program that includes educational and mentorship components and culminates in a public pitch event or ‘demo day’.

The innovation ecosystem is saturated with hundreds of new organizations that call themselves accelerators but don’t necessarily meet the above definition. Even within that definition, the sheer number of accelerators has exploded in the last decade, from 16 in 2008 to over 170 in 2015. The goal of an accelerator should be to position its cohort of startups for long-term success, but it is difficult to find information on the true value of many of these programs.

Source: The Brookings Institution

Is it worth it?

It depends. There are a few common value adds regardless of the program.

• Validation: Well-regarded/well-known accelerators like YC, AngelPad, Techstars could give your brand a boost and put you in front of the right investors
• Structure: Being required to show up somewhere everyday and demonstrate progress helps with goal-setting and deadlines
• Community: Being a founder can be lonely. Accelerator programs allow you to spend everyday with startup founders who are going through the same thing you are.
• B2B Customers: An industry-focused accelerator (e.g. healthcare, fintech, energy) could be particularly helpful in bringing about connections to customers in your vertical

Things to think about

• If an accelerator requires an equity stake, think long and hard about its added value before you give a piece of your company away
• Look into performance of portfolio companies and what stage they were at when they entered the accelerator — does this match up with your company stage and where you want to be?
• Who runs the accelerator and who do they have access to? All accelerators have a laundry list of mentors, but try to dig in to see how many of these mentors actually show up on a regular basis and are willing to share their rolodex.