Do you have a new business idea? Have you already started on your new business? Then you probably are in need of professional help and money.
Enter the startup accelerator.
Startup accelerators have only really been around for about 12 years, with the first startup accelerator being Y Combinator, which started in Cambridge, Massachusetts and later moved to Silicon Valley. As the entrepreneurial movement keeps scaling, more and more startup accelerators have come into existence, with their exponential growth mirroring the startups they invest in. Although most accelerators were originally based on the coasts, more and more of them are popping up in the Midwest (Silicon Prairie), leading to more access for businesses to grow. (For related reading, see: Grow Your Business With Business Incubators.)
What Is a Startup Accelerator?
Sometimes referred to as seed accelerators or incubators, startup accelerators are unique and tend to have the following characteristics:
- Cohort based: A group of startups going through the accelerator at the same time, focusing on the teams, not individual founders.
- Fixed term: A defined start and finish to their program, typically ranging from three to nine months, ending with a final, public pitch event where the participating startups are highlighted and can get real investors on the spot.
- Educational: Structured learning
- Mentoring: Most accelerators have access to already successful entrepreneurs who want to give back by mentoring startup companies. (For related reading, see: 6 Ways Mentors Elevate Your Career.)
- Connections: Offers connections to other business ventures and strategic partners and co-working spaces.
- Seed money for equity: It is typical for an accelerator to take an equity position in the startup company in exchange for the startup being accepted to and completing their program. The equity position is usually accompanied with a modest seed investment into the company as well. Some also offer convertible notes as their initial investment.
- Private or public: Can be privately or publicly funded and invest in a wide range of companies.
- Application process: Programs are open to mostly anyone, but highly competitive.
- Prestige: Being accepted in and completing a well-respected accelerator can greatly enhance the value of a startup company to future investors and increase potential business opportunities.
- Five phases of accelerator process: The typical accelerator process includes: awareness, application, program, demo day, post demo day. This allows for growth and support both during and after a startup completes an accelerator program.
Each accelerator has its own nuances and is unique in how they do things, yet most of them share a number of similarities in how they conduct their programs. Any accelerator you are considering should be strongly vetted by you, your co-founders and any mentors you are currently working with.
5 Tips for Getting Into a Startup Accelerator
There are many variables to consider when you are trying to get into a startup accelerator. Ask 10 different entrepreneurs and you will get 11 answers! Getting into a startup accelerator is extremely competitive, but the following five tips could be what sets you apart and gets you into a program.
- Explore – Research the accelerator programs in your geographic region and what they specialize in. Finding an accelerator close to where you live that is geared toward your type of business are two major parts of the puzzle when you are applying to get into their program. (For related reading, see: The Best U.S. Cities to Become an Entrepreneur.)
- Network – Once you narrow down the accelerator(s) you would like to apply to, make sure you know who the key players are that are involved with the program. Also reach out to prior graduates of the program to learn inside tips from them and maybe even get a personal introduction to one of the principals of the accelerator.
- Prepare – Make sure you know your business (service, product, etc.) inside and out. Having an MVP (minimum viable product) and knowledge of your addressable market is huge. Be able to show scalability, and more importantly, how your business can solve a problem while also being a strong investment opportunity.
- Apply and pitch – If you pass muster with the initial application, then it is time to make certain your pitch is rock solid. Show the accelerator the problem you and your startup are going to solve, how you are different and how investors can get a return on their money if they invest in you and your company. Being able to tell this in a concise manner is key to grabbing and keeping the attention of the decision makers.
- Be all in – Once accepted into an accelerator you can celebrate, for about five minutes, because then the real work begins! You will need to get your game face on since most accelerator programs are intense, focused and constantly moving. The accelerator is investing in you more than anything, so show them you are serious, be coachable and learn as much as you can. As the saying goes, put good in, get good out.
Startup Accelerators by State
The following list is certainly not all-inclusive because of the ever-changing accelerator landscape. I have focused on cities in the Midwest (Silicon Prairie), with some overlap to the cities that Steve Case has visited or is going to visit as part of his Rise of the Rest tour. The accelerators are listed in alphabetical order by state.
For the purposes of this article I am limiting my definition of accelerators to those that have a formal program, application process and provide some type of funding. However, some states simply don’t have established accelerators yet. If you don’t see an accelerator on the list that you think should be, please leave me a note and I will gladly take a look at adding it.
Here it is, the list of accelerators you have been waiting for! I hope you are able to find the accelerator that best meets your needs.
(For more from this author, see: 3 Personal Finance Tips for Entrepreneurs.)