The number of startups trying to solve problems with innovative technology is growing rapidly. With that growth, we’ve seen more technology accelerators looking to help those entrepreneurs by providing education, guidance and investment capital in exchange for a stake in their companies.
It’s important to note that there are many different types of tech accelerators to choose from. The most common and “traditional” accelerators cater to very early stage companies. These programs, such as Y Combinator, Techstars and 500 Startups, last approximately three months focusing on nurturing an idea until it is ready to pitch to investors during the final event of the program — demo day.
In this article, we discuss several factors that can help determine which accelerator is right for your startup. These factors include:
- The stage of your company
- Human and financial resources available
- Your management and working style
But the most important consideration is whether or not you can commit to the program. Accelerators can be a big resource commitment — taking tremendous amount of human and sometimes financial capital to get the full benefit of the program offering. If resources aren’t available and you can’t make the necessary commitment, an accelerator program may not be the right step for you.
Once you’re ready to commit, choosing the right one for your business can be challenging as there are increasing numbers of accelerators in the marketplace. So how do you know which direction to go? Answer one simple question – What am I looking to get out of it? Outline your objectives for an accelerator and make sure you do your homework to figure out which one can best help you achieve your goals. Clearly defined goals and milestones, regardless of whether or not you participate in an accelerator, is essential to your success. An accelerator should be viewed as a tool to help you reach those goals — helping review early stage products or turn ideas into businesses.
Research the team running the program, evaluate the mentors and advisors to see what value they could bring to your business and don’t forget to review the costs associated with the program. Often participants in an accelerator class will bond and new business partnerships can be formed or new partners or team members can be found. Introductions to mentors, investors and even customers can also be an incredible benefit of an accelerator.
So, what’s next after a successful launch of your product or service? How can you take your business to the next level? A strategic technology accelerator can often pick up where traditional accelerators leave off, providing access to a vertical market, such as real estate or healthcare. Strategic accelerators can also help companies that have completed a round or two of financing and can’t benefit from a traditional accelerator. They provide education and mentorship components, but are more focused on helping their companies grow revenues through access and exposure to customers in that vertical.
Cultivating relationships with customers and tailoring products to fit their needs takes time. Strategic accelerators often have longer duration periods than traditional accelerators and may include more than one Demo Day throughout the program. Technology accelerators can add tremendous value to your business and help you take it to the next level. Choosing and picking the right one is critical. Make sure you choose the one that provides maximum benefits and can best help achieve the goals of your business. Most importantly, make sure you have the resources to fully commit to the program.