Startup accelerators, no matter where in the world, all offer more a less a standardized program of a little up front investment, office space, contacts to mentors and possible investors and a learning curriculum with workshops, one-on-ones and classes in designated office spaces over the course of three to six months. The investment is not big, and oftentimes not a good deal, the mentor network can be relevant or not to the startup but can most of the time be created by the entrepreneur him- or herself with a bit of effort and the curriculum is by long time entrepreneur perceived as a waste of time. With all this negativity why do entrepreneurs opt for acceleration?
What are the reasons startup founders decide to join an accelerator program?
While interviewing different founders and accelerators in Europe four themes have been recurrent:
- Network: Meet customers, mentors and investors
- Legitimation: First filter for investment and quality stamp
- Process: Learn about business processes and scale up
- Internationalization: Access to a new market
These four themes have come up in various conversations and have been explained as being the reason for joining an accelerator program. German startups thought the help of a US-based accelerator to enter the local market, young entrepreneur with few experiences have turned to accelerator curriculums and mentors for help in structuring their growing enterprise and setting up smooth business processes, founders aiming to raise a substantial amount of capital have sought the backing of a renown accelerator to be introduced to possible funds and almost all startups hope to find customers and mentors to accompany them on their journey through such a program.
Joining an accelerator program to network
Especially young startup founders that are just starting out, setting their first foot in the world of entrepreneurship or setting up their business in a new, unknown location, look in startup accelerators for connection. They decided to join the program to grow their business and experience through the network the accelerator has and they evaluate the accelerator not on the investment and equity deal it offers or takes but rather on the potential its network promises. B2B startups could look for corporate accelerators whose customers or partners might be a match for the own business model, foreign startups opening up their business to the local market could look for mentors to help them on the way and startups aspiring to bring in an important amount of funding could be looking for support in the accelerator’s extensive network.
In this case the offered learning curriculum, the initial investment, the contact with other startups and the office space become secondary resources offered but not the most important when deciding upon which accelerator to apply to.
Joining an accelerator program to find legitimation
In many interviews I have heard that startup founders chose to participate in an accelerator program to get a kind of stamp of approval, to find legitimation for customers, future employees and also investors. The idea behind this this is that the accelerator has chosen this one particular startup among many, has placed not only their hopes in the founder but also many resources (like capital, time and connections) and that thus this startup is not just any startup but a valid, a worthy one. Legitimacy in front of other startups to be taken seriously, in front of customers to be trusted, in front of future employees to be considered and in front of business angels and venture capitalists.
In such a quick paced and unstable segment, where new technology arises and only few are familiar with, where people move quickly from one role to the next and where customers do not stick to one product for life legitimacy is an important value to attain. A seal of approval similar to a college degree that shows to the world out there: Hey, this someone has taken a look at us, has examined and taught us, you can trust us.
Joining an accelerator program to set up processes
Startups in a somewhat later stage might join an accelerator program for a whole different reason. Not looking for capital or possible new customers, these startups might be overwhelmed by their growth and might be looking for professionalizing their business. Setting up processes, finding more efficient ways to deal with this and just overall stepping it up a notch to scale the business up further.
In this instance the most value a startup accelerator can bring is its own staff and its mentor network. And most of the times this occurs in startup accelerator programs that are focussed in one special market segment or even have a specialized corporate partner involved that can take the startup under its wings.
Joining an accelerator program to internationalize
Another very interesting reason to join an accelerator program that has surfaced during different interviews is internationalization. Startups looking to grow in Europe or the United States have come to respective programs looking for help, for experts in legal aspects, for connaisseurs of the market for marketing purposes and for support in logistics when it comes to physical goods.
Especially international programs with accelerator branches in various countries take in many startups with this aim and are able to connect them to different actors fueling the startups’s growth.
As you can see a founder’s reasons for joining a startup accelerator are varied. From meeting new customers, to showing off a kind of seal of approval, to improving its own process up to setting foot into new markets. With varied reasons for participating different resources of the accelerator are highlighted and on the part of the accelerator different focus are set. Even more so the accelerator program specializes and takes in startups that are aligned in goals and reasons for coming into contact.
The most interesting to see is the post-acceleration reflection: Have the expectations been fulfilled? Did startup founders attain the reason for joining the accelerator program?