Incubators and Accelerators

Is a startup accelerator right for you?


12th Sep'22
Is a startup accelerator right for you? | OpenGrowth

If you are a startup founder, you must have wondered whether or not a startup accelerator is right for you. Some think that it dramatically hastens the building process with the help of advice from mentors and well-structured deadlines. On the other hand, some people say it's a waste of time. 


It can be puzzling to make a decision. So let us weigh the pros and cons of a startup accelerator and figure out 'is a startup accelerator right for you?'


What are startup accelerators?


Startup accelerators, also known as 'seed escalators', help out early-stage, growth-driven startups through education, guidance, and funding. Startups enter accelerators for a fixed time, and as part of a group (of seed-stage startups). The process of a startup accelerator provides young companies with an education that comprises of year's worth of trial and error/ learning by doing, in just a few months.


A startup accelerator is different from incubators, angel investors, or seed-stage venture capitalists. Startup accelerators are fixed-term, cohort-based, and mentorship-driven. They progress towards the day of graduation or "demo day".


a group of people talking around a table

Startup accelerators work out well for those startups that have already gained momentum and are looking to commercialize their product or service. These programs can take somewhere between a few weeks to a few months. So they are time taking for someone just running a young business. But don't worry this time is utilized very well. During this time you get access to the network, connections, knowledge, and some funding for your startup. 


Before joining any accelerator program make sure you do your research well. Please pay special attention to their alums and mentors. Find out how many of their startups have thrived and failed, and if you have the chance to speak with any former participants, find out how they felt about the particular startup accelerator.


Take your time before you decide to go for a particular startup accelerator. After all, you'll be investing a sizable sum of money in this program and putting your business's future in its capable hands (to some degree). Now that you know how startup accelerators work, let's check: Would you benefit from a startup accelerator?


Why should you join an accelerator?


1. If you are looking for mentorship


Many startup founders have no or limited experience in business at best. This is a key reason why many startups fail. They enter the market with little knowledge and experience in running a successful business.


Accelerator programs give you access to the industry's bright and seasoned business minds. These experts can guide you to navigate the market from a very practical point of view. You can learn a lot from their experience and lean on their tried and tested business knowledge. This will help you grow as a business owner and give you a firm and realistic perspective.


When you struggle, it can be comforting to have some sharp business veterans behind your back guiding you. Their insight can help you reflect, refocus and charge forward.


2. If you are preparing to raise capital/funding


funding written on a green board


Startups are usually short on cash. Hence they need to get monetary support. Startup accelerators have an extensive network of investors looking to invest in the next best revolutionary product or service. Accelerator programs provide a great opportunity to meet investors.


When the program completes, you can pitch your unique ideas to multiple investors at once. This can be the big break you need to get the show started.


3. If you want to gain credibility


Think of it like this, graduating from a prestigious university provides you with a certain credibility. Similarly, when you graduate from a notable startup accelerator your brand is automatically seen with positive regard. This also helps you get your name out there. It can even help you in attracting investors and clients for your business. 


Before joining an accelerator program, ensure you carefully assess the alums. See how many of their startups have succeeded and how many have failed. This will give you an idea of how many investors will be interested in a particular accelerator program.


4.  You want to exchange insights


Accelerators are great mediums to meet with fellow founders and experienced business owners. There can be a lot to share and receive. Accelerator programs provide you with an environment conducive to personal growth. When you exchange stories of struggle and hard work with people going through a similar experience, you learn a lot from each other and also get a cathartic release from sharing.


5. You want to make connections


picture of a handshake


A good accelerator program will have an extensive network of connections, encompassing investors and other businesses. This gives you a platform to garner funding from an investor. Additionally, you can also partner up with another business. Partnering with another business can help you with logistics, production, etc. 


6. You want to compare your startup's growth with other startups


Accelerator programs can be a real wake-up call sometimes. They give you access to other startups up close. You can compare your company with theirs and get to see firsthand where you are lacking. 


If you wish to assess your success and growth against a standard, you can average the growth of other startups that started around the same time as yours and get a real answer. This may sound rough but this healthy competition keeps you on your toes. The pressure to outperform others is real. Nobody wants their startup to perform poorly on the demo day and receive little investment. 


Why should you join an accelerator?

1. If you haven't done your research well


 As we discussed earlier not all startup accelerators are with it. Accelerators that are just a couple of years old don't have a good profile in terms of successful startups and also don't have an extensive network.


If you have not done your research well don't rush to an accelerator program. If it is a bad one, it will cost you not just money but time, which is crucial when starting a business. Carefully examine the pros and cons of accelerators for startups before you make a decision.


2. If you can't afford it


Startup accelerators cost money. If you don't have the money you'll have to offer equity (often a high percentage). So you have to evaluate if it is worth it for you, are you willing to part from a chunk of your company for what the program has to offer? This is another reason to do your research about the accelerator program well.


3. If you are not looking to raise funding


Often founders go for accelerator programs to raise funding. Accelerator programs usually end on a demo day, where startups get an opportunity to pitch their idea to investors.


So if you are not looking for funding, you might want to reconsider joining a startup accelerator program. If you are looking for networking, there are other options that won't cost you as much money and time as an accelerator program would.


4. If you don't have the time


As mentioned a few times in this blog, startup accelerator programs can take much of your time. Given that you'll be learning a lot during the period of your program, you still have to consider if it is worth it. You wouldn't want your actual startup and sales negatively affected by a startup incubator program; that would be counterintuitive. 


So Is a startup accelerator right for you? I hope I was of help and you found your answer!

We at OpenGrowth, are committed to keeping you updated with the best content on the latest trendy topics from any major field. Also, both your feedback and suggestions are valuable to us. So, do share them in the comment section below.

A student in more ways than one. Trying to feed her curiosity with news, philosophy, and social commentary.