When L-SPARK launched two years ago, the goal was to support early stage SaaS businesses looking to scale their companies. Until that time, the only option was to go to US-based accelerators.
To complete its goal, L-SPARK used a two-pronged approach by offering two programs: an incubator program targeting extremely early stage companies that were just developing their product-market fit, and a separate accelerator program for more developed companies with revenue and customers that were looking to expand globally. Over the past two years, L-SPARK has accelerated 19 SaaS companies, some who have gone on to grow revenues between $7,000 to $100,000 MRR. With this success, the team asked itself if anything needed to change to continue fulfilling its mission of scaling startups through a high-intensity program.
We partner companies with entrepreneurs who have been there and done that in a direct and hands-on way. By their example and enthusiasm, they build momentum for the company.
“The word incubator and accelerator had so many meanings to so many people that it lost any real value, and saying that you are going to join an incubator really was not sufficient to describe what we were doing,” said L-SPARK executive director Leo Lax. “We actually accelerate a company in its stages of development. Compared to ideation, when someone has an idea and they’re exploring what the idea is about or what team they need, and it’s all about the early, early stages of putting something together, we’re more about ‘you got something, we think this is good, we’ll accelerate it and put it on a commercial platform.'”
L-SPARK has now transitioned to operate exclusively as an accelerator with the collective goal to help SaaS companies generate 10x revenue growth. The accelerator will operate two programs: its four-month Foundation program, which helps early stage companies with a product to establish go to market fit, capture early adopters, and develop an action plan with a mentor; and its nine-month Scale program, which will help companies execute on repeatable sales processes, start the process of building a board of directors, and building a plan for aggressive customer growth.
Lax said it’s more of a restructuring of message rather than a change in program delivery, emphasizing its ultimate goal of helping companies grow revenue by working closely with a mentor to execute on tailored action plans; in both of its programs formerly known as incubator and accelerator, L-SPARK was focused on rapid acceleration over ideation.
Rather than take a bottom-up approac, where an accelerator works with a startup to figure out how to improve their current process, Lax said that L-SPARK takes a top-down approach where they set a goal for companies — such as reaching $40,000 MRR a month by the end of the program — and coach them through reaching it.
“Sometimes we say this to founders and they think we’re smoking dope,” Lax jokes. “But because of the way we do things, we believe we can get it done. We partner companies with entrepreneurs who have been there and done that in a direct and hands-on way. During that period, embedded mentors not only provide advice, they get things done. By their example and enthusiasm, they build momentum for the company.”
Lax said that in the SaaS industry, the concept of momentum is especially important. “In our market, it’s all about momentum and how rapidly you can grow and acquire customers and turn them into revenue-generating opportunities,” he said. “The SaaS business is all about building an engine that can grow rapidly over a large period of time. And growth is a large opportunity for businesses to become global and sustainable.”
Unlike many accelerators, L-SPARK won’t take equity up-front. If a company raises money during the program, and up to 12 months post-graduation, L-SPARK will receive equity in the company calculated as 5 percent of the total size of the investment rounds converted into equity.
Applications are now open for its winter 2017 Foundation program.