In a previous article, we went into some detail, both about startup companies and their attempts to secure early-stage investment, along with one of the other avenues that's becoming increasingly available for up and coming entrepreneurs - Incubators. In this article, we'll be going through the second of these methods for startup companies - Startup Accelerator/s. So, What is a Startup Accelerator?
The number of startup companies over the years has undergone a veritable explosion over the past few years. Case and point - one of the front-runners in the technology world, especially for startups: the United Kingdom, is home to more than 660,000 across the country as of reports from this year.
With such a dramatic increase in startup companies, there's a pressing need for organizations to help get them off the ground. This is where Accelerators come into frame.
So what is a Startup Accelerator? These refer to organizations, initiatives or companies dedicated to 'accelerating' the development and progress of startup companies that they choose to support.
Through a mixture of highly immersive partnerships and intensive programming, these Accelerators serve as an ample of resources and information in order to take startup companies and their entrepreneurs to the next level.
These same accelerators are backed by a range of Venture Capitalists, Private Investor and Equity firms, even major companies in the tech world, meaning that they provide a firm source of information, advertisement, education and funding for startups.
Being one of the avenues that startup companies can look to for early-stage support, Accelerators offer a much more rigid structure compared to counterparts like Incubators. Accelerator projects, depending on the specific kind, run anywhere from 6 weeks to 6 months, and have annual intakes of startups known as 'Cohorts'.
This cohort structure means that the kind of industry focus of that Accelerator can differ significantly. But what this also means is that more specialized support can be given to startup companies chosen to participate.
Much unlike Incubators as well, startup companies have ready access to capital investment through these initiatives. And, again: depending on the Accelerator, these can often be non-profit equity investments, so there would be no need on the startup's side to sweat paying it off.
Along with these factors, Accelerators take on a more hands-on approach towards the professional development of companies. As a result, it provides associated startups with continued education through presentations of their projects over their development stages, along with seminars. These Accelerators also provide a good deal of individual support; with a range of mentors that specialized in whatever industry the cohort focuses on that year.
Much like Incubators, Accelerators' most immediate benefit for startup companies is that they plug you into both a social and professional pipeline of like-minded entrepreneurs, mentors, investors and business professionals. This 'Network Effect' is invaluable to a startup trying to earn recognition.
Along with this network effect, Accelerators have gained notoriety for being more than a challenge to get into for startup companies. Some of the most popular initiatives out there like TechStars in the USA, or SeedCamp in the UK, have a thorough vetting and application process.
But with the challenging process of application, comes the kind of brand recognition that results from being trumpeted by a world-renowned Accelerator initiative.
With such a regimented approach towards seminars, mentorship and education, there are plenty of educational events that are compulsory for startups to prove successful in one of these Accelerators. With these seminars, along with the challenges of building up your fledgeling startup, this means that days can prove more than taxing.
In many instances, your startup company may find itself having to jettison intrinsic values in the name of turning a profit and being seen as a viable investment prospect in the eyes of those responsible for the Accelerator. While this can prove an almost sacrilege to entrepreneurs, this is often a necessary evil, and can be a deal-breaker for some.
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