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What is a startup accelerator?
January 15, 2023
There are two types of accelerators: accelerator for startups and for
existing entrepreneurs. The most popular is startup accelerator.
There are over 200 startup accelerator programs in the United States — many
more globally — and they differ in approach, focus, cost and effectiveness. The
well-respected Y Combinator and SVB’s partner, Techstars, are
investor funded and work primarily with tech startups. Others are sponsored by
universities, in the case of Stanford University’s StartX, or by corporations — the latter is particularly true for healthcare
startups.
Private startup accelerators can provide funding, and the money helps cover
early-stage business expenses as well as travel and living expenses for the
three-month residency at the in-person startup accelerators. However, the funds
and guidance come at a price. Just like any other equity funding, signing an
accelerator agreement typically means giving up a slice of your company. Startup accelerators generally take 5% to 10% of your equity in exchange
for training and a relatively small amount of funding.
There is another type of accelerator (less popular), when its focus is not on
new startup companies but rather on growth of existing companies. The Center
for Entrepreneurship implements two types of programs. The ScaleUp
accelerator is for existing entrepreneurs who are willing to grow existing
business. The Startup Club program is for new startups.
Are startup accelerators worth it?
February 20, 2023
Are startup accelerators worth it? For most startups, the overwhelming answer is yes. First-time
founders usually need a lot of support, and an accelerator can help you
by:
Accelerators can also connect you to subject matter experts to help you
achieve product/market it or even help you develop a go-to-market
plan.
Success stories abound. “I’m not sure we would have made it without Techstars,” says EverTrue co-founder and CEO,
Brent Grinna. In the years following its
participation in the startup accelerator program, the company raised roughly
$25 million in venture funding.