Accelerator programs have become a ubiquitous part of the startup world, with dozens of programs promising access to capital, mentorship, and a strong network in exchange for equity and/or the ability to say they were part of a successful startup’s journey.
“[Accelerators] aren’t a silver bullet … they are a helping hand that can help you level up.”
While Y Combinator and Techstars are two of the best-known programs, and both have been around for over a decade, there are now countless programs run by VC firms, Fortune 500 companies, educational institutions, and community organizations.
The increase in the variety of programs means it can be difficult for founders to parse through them to evaluate which are the right fit. Each program offers a different value proposition, structure, and focus, so deciding which one to apply to can be time consuming – and that’s after deciding whether to apply at all.
When I joined Willful, an online estate planning platform, as CEO in early 2019, we found out shortly after that we had been accepted to FounderFuel, a 12-year-old startup accelerator program based out of Montreal (backed by VC firm Real Ventures).
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I had attended FounderFuel demo day in the past, and knew that it had alumni like Sonder, Bus.com, and Transit App, but beyond that I didn’t know much about the program. We accepted, and my co-founder and I relocated to Montreal from April to August, with our VP of engineering, to participate in the program.
Now that I’m on the other side of the program, I want to provide some takeaways for founders who have considered joining an accelerator program, but aren’t sure whether it’s a worthwhile experience for their company or are unsure how to choose one.
In this article, I’ll tackle why an accelerator program can be valuable, and how to narrow your list of potential programs. The first thing to consider when deciding whether to do an accelerator program is your desired outcome, and to ensure that your goals match the value prop of most programs. What are you hoping to get out of the program?
The list of typical outcomes include:
- Money – not just the money put in by the program, but the connections to investors that could result in easier future fundraising.
- Prestige – saying you’re a Y Combinator or Techstars grad has an element of prestige to it that can help open doors (despite the fact that hundreds of companies have gone through these programs with varying degrees of success).
- Expanded network – accelerators provide a lot of exposure to local entrepreneurs, program alumni, investors, and media, not to mention the relationships you build with your fellow cohort companies.
- Corporate pilot – Accelerators backed by big companies often commit to launching a pilot with your company – or at least introducing you to the right people internally – and most accelerators can facilitate intros to potential corporate partners and customers.
- Industry expertise – programs with a specific vertical focus, or those housed out of schools (like Creative Destruction Lab, for example) can provide access to leaders in fields like AI, manufacturing, and blockchain, and all programs provide access to expert mentorship in various fields.
- Mentorship/development – most programs include some aspect of mentoring and programming around key areas like marketing, sales, and product development, so they’re a good way to tackle things like refining your product roadmap or working on your marketing plan.
- Pitch development – most programs culminate in a demo day, where you pitch your company in front of investors, media, and community members. This is a great opportunity to work on a solid version of your pitch deck, and to get comfortable presenting in front of large audiences. It also means you usually have a well-produced pitch video you can share with investors or partners post-event.
If none of the above would provide value to your company – or they aren’t a priority at your stage – then an accelerator is probably not a good fit.
Accelerators can provide all of the above value, but they can also be time consuming to apply to, as well as participate in. And they aren’t a silver bullet to finding funding or product market fit, they are a helping hand that can help you level up. If you’re expecting a program to be the only thing standing between you and unicorn status, you’ll likely be disappointed.
Once you know what you want out of a program, and decide that it would be valuable, it becomes easier to figure out which program to apply for.
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For us at Willful, we had three primary goals in mind: refine our product roadmap, build a network of corporate partners and investors we weren’t already connected to, and build team cohesion, (since we had just hired a new VP of engineering, and I had just come on full-time).
Once you’ve defined your reasons, and confirmed that your goals align with the typical outcomes of an accelerator program (expanded network, product focus, funding) it’s time to narrow down the list of accelerators. There are hundreds of programs around the world with different structures, requirements, and value props, so here are a few of the criteria to consider when making your decision:
- Location – do you want to relocate, or do you want to stay in your home city? We knew we wanted to move to build connections in a new place, so that made it easy to target accelerators in other places like Montreal.
- Program requirements – many programs dictate that you have to have multiple co-founders, some stipulate that you have a technical co-founder, and others want you to be at a certain traction point in your company. Read the requirements for applicants carefully to ensure you fit the criteria before adding a program to your shortlist.
- Time commitment – programs vary in length, though most are about 12 weeks. The time commitment per week varies, so ensure you review the expected commitment to ensure you can meet those expectations.
- Track record and/or reputation – when assessing an accelerator, you should be looking at who backs the program, the cohorts of companies that have graduated and whether they’ve gone on to be successful, and ideally you should look for testimonials or references from alumni. In some cases, like with Y Combinator, the name alone is enough to provide cache, whereas for others, you want to ensure that they have a history of supporting startups with fundraising and connections after the program ends.
- People involved – you should be looking at not just who hosts the program, but who the actual people are administering it day-to-day. You should also vet who the mentors and experts are to ensure they are people you could derive value from. If you can derive value, research which investment firms typically attend demo day or have put cheques into past alumni. The people involved make all the difference with a program, so you want to ensure that mentors, investors, and people leading the programming are solid.
- Program focus – many programs have a specific vertical focus, for example FinTech, or they focus on a certain business stage (scaling up, getting to your first sale, etc.). You should selecting programs that either align with your focus, or that align with your company stage.
Ideally after this process, you’ll have a short list of accelerators to apply to, you’ll have a clear picture of why they’re the right fit for you, and what you hope to achieve from each of them.
Image courtesy Willful. Photo by Becca Lemire