If you are starting your own business or are interested in growing your business, I am sure you have heard of the term “accelerator” – so what is an accelerator? and did you know that it is harder to get accepted (1.5-3%) into an accelerator then it is to get accepted into Stanford or Harvard?
A startup accelerator is basically a programme that seeks to provide entrepreneurs with the capital they need to take their businesses from fledgling concepts to scale. Startup accelerators, therefore, are essential facilities that help to deliver the funds that companies need to get to a critical, self-sustaining size so that it can begin to generate returns for investors.
Most startup accelerators aim to boost the growth of a new company for around three months. Accelerator Programmes provide not only access to capital but also mentors, investors and other advisors who may be able to offer strategic direction and experience.
How Much Do Startup Accelerators Invest?
Startup accelerators are usually involved in the initial phase of a business – the point at which investors believe it may be a viable concept. Typical investments range from $20,000 to $50,000, although they can fall outside of this in exceptional circumstances. The application process is open, meaning that anyone can apply for accelerator support.
Last year, startup accelerators invested more than $107.3 million in new enterprises across 186 accelerators. The distribution of funds varies according to industry. Over the period 2012 to 2017, investments in advanced manufacturing and robotics grew more than 1,386 percent. Growth in accelerator funds directed to startups involved in blockchain increased a similarly impressive 1,321 percent. And growth in agtech exceeded 1,000 percent. Fintech saw more than 400 percent growth in funding, and gaming, 225.
What Is The Application Process For A Startup Accelerator?
- Step 1: Application. The first part involves filling out an online form about the startup company. The application should include details about the team, the core concept of the business, the target market and any work that has already been done.
- Step 2: Assessment. The next part of the process involves the accelerator checking that the startup has the skills required to succeed, that it fits the accelerator’s investment ethos, and that it aligns with investment verticals.
- Step 3: Interview. The purpose of the interview is to find out more about the people and the product. Investors need to know that a startup has the requisite human capital to go the distance, as well as a product that people will want to buy. Interviews typically last for 20 to 30 minutes.
- Step 4: Evaluation. Evaluation is the part of the process where the accelerator judges a startup’s credentials. They want to see that the startup has proficiency in core areas and can make a return.
- Step 5: Acceptance. At the final stage, the investment committee meets to discuss the application. They then decide whether to part with the requested money and support the start for the following 12 to 16 weeks.
There’s a lot to learn about startup accelerators. Take a look at the following infographic from MassChallenge. Not only will you learn about the application process, but also about how to nail the application process, which are the most popular accelerators in the US, and the industries accelerators are doing the most to support. Check it out below.