We all know how difficult it can be to start up a new business. You may have a great idea and plenty of determination, but it will take a lot more than that to achieve success. Today we are going to focus on a tool that is used to prevent the premature death of a startup. We will see what is a business accelerator, if it’s any different from a business incubator, as well as analyze some examples.
What Does a Business Accelerator Do?
A business accelerator is an organization that offers an array of support services, plus funding opportunities for startups. The starting business is enrolled in programs that last for several months. Thus, they receive supply chain resources, mentorship, and office space. Moreover, they can gain access to capital and investment, in exchange for startup equity. In general, the projects are very intensive, as well as time-sensitive.
Is a Business Accelerator the Same as a Business Incubator?
Though many people confuse the two, they essentially refer to different things. Both help companies grow by offering them mentorship and guidance, only they do it in different ways. Moreover, they take care of it at different times in the business evolution. Here you have an infographic that shows the main differences between the two, courtesy of Nut Cache:
Why Do People Love Business Accelerators?
The main reason why business accelerators have become so popular is that they offer the best both to investors and startups. Because the startups are already closely analyzed, investors won’t waste plenty of time on selecting their opportunities. Instead, they can choose to invest in the accelerators directly. Moreover, the investments are structured as real options.
This means that the early stage investors can invest more in the future if they want to, but they’re not obligated. Truth be told, it’s a great place to find angel investors. If you don’t know what is an angel investor, find out that it’s the person who invests in a company and takes an active role in its leading.
On the other hand, startup owners also love these structures for the resources they bring. Usually, the accelerators are made up of various experts who only goal is to help business thrive. As such, you can hardly find a better way to success, if at all. Moreover, the entrepreneurs can connect with other business peers and trigger more development through friendly competition. The only disadvantage that might convince an entrepreneur not to participate in a generator might be the fact that they must hand over some equity.
How to Find One? Top Business Accelerators
It’s not easy to find the best business accelerators. That’s why we are bringing you a brief list with the best ones you can find. Of course, depending on your field and area, not all of them are available. For this reason, it’s better to do your own research and be up to date.
1. XRC Labs
XRC Labs is a business accelerator that focuses on retail and consumer goods. It’s available in New York City and it offers participants access to capital, mentorship, operational support, as well as a workspace on the campus of the Parsons School of Design. They have 2 programs each year that last 10 weeks each.
2. The Brandery
Found in Cincinnati, The Brandery offers support for various fields, such as design, marketing, and branding. Some of the benefits they offer are partnership opportunities, mentorship, $50,000 in funding, and introduction to seed stage investors.
This is a special business accelerator that focuses only on women-led startups. MergeLane offers virtual mentoring, personal coaching, as well as a curriculum that targets any issues with the business that might appear in the early stages. Moreover, they deal with topics that affect mostly women leaders.
4. 500 Startups
Yet another generous program is 500 Startups. Here, they focus on diversity, helping entrepreneurs of all genders, ethnicities, and ages. They offer early-stage companies a maximum of $150K in exchange for 6% of the company.
TechStars is, in fact, a competitive program available in various cities in the U.S.: Boston (Massachusetts), Boulder (Colorado), New York City (New York), San Antonio (Texas), and Seattle (Washington). They co-invest in companies that are part of their ecosystem of founders.
6. Disney Accelerator
If you’re an entrepreneur that wants to innovate in entertainment, as well as create some new media experiences, this is the right accelerator for you. You can get access to creative expertise, enjoying the resources of The Walt Disney Company. Ten companies a year get enrolled in the Disney Accelerator program that lasts from June to October.
How to Apply?
Each business accelerator has different conditions to apply. As you have seen in the examples above, they focus on various fields, so you should see what is the competition in your field. There are different sets of requirements for programs, some of them being more generous than others.
Generally, the application process consists of a long series of questions about the business idea, the market, the competitors, any potential challenges, and the work you’ve done so far. There may be some specific qualifications with some programs, such as a certain development stage, intellectual property agreements or having raised funds before.
The next step is the interview. If the accelerator is interested in your company, they’ll call you for an interview. The questions there might vary a lot, depending on what the accelerator is looking for. Here you have the opportunity of asking questions yourself. In fact, this will show them that you are truly interested. Ask about how much time would you spend together, how many people are involved in the program and what are their career fields. It’s important to make sure that your needs match what the accelerator has to offer.
To conclude, a business accelerator is a special program that aims to help startups succeed. Given the varied nature of startups, there is a huge array of accelerators that are available. Moreover, no accelerator experience resembles another since they offer different guidance, amounts of money, supervision, etc. Before applying to one, make sure you carefully read the conditions of admission. And in case they don’t accept you, don’t be disappointed. Remember that there are plenty of other programs where you can sign up, and there are new ones born every year, so keep applying!
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