How to choose the right accelerator programme for your startupNovember 10, 2014 10:21 am
Fortunately, help is at hand. Charities like Nesta, the UK’s innovation foundation, are working to study and support accelerators to ensure that entrepreneurs are provided with the best opportunities available to kick-start their business. Chris Haley, Nesta’s head of startups and new technology research, shares his knowledge on what UK accelerators have to offer.
What are the benefits of accelerator programmes?
“The benefits differ for each stakeholder but, primarily, accelerators deliver a model of startup support that is resource-efficient. The programmes offer funding, expert mentoring, access to industry or investor connections and an environment which encourages you to build a strong network and learn from your peers. Many businesses that have entered accelerator programmes report that the intensive, time-limited nature of the programme is beneficial, as it forces them to focus on developing their idea in a very short space of time.
Completing an accelerator programme often provides an element of endorsement, which can make it easier to gain support from investors or customers in the future. It is also worth mentioning that the most typical model takes shares in the future business as payment, which is an attractive option for cash-starved young companies.”
What is Nesta’s definition of an accelerator programme?
“The term ‘accelerator’ has a broad definition within the startup community because accelerator models are still changing. However, since Nesta’s 2011 study (‘The Startup Factories’ by Kirsten Bound and Paul Miller) we have used the term to describe a specific type of startup support programme, which typically includes the following characteristics:
- An application process that is open to all startups and their teams, rather than individuals
- A three to six month programme of events which offer support and intensive mentoring
- Offering a provision of pre-seed investment (a sum of money to establish your idea with) of around £10k to £50k, usually in exchange for equity.”
What does Nesta do?
“We are an innovation charity dedicated to helping organisations bring great ideas to life through activities that range from early stage investment to in-depth research and practical programmes. We believe that startups are important engines of innovation and we aim to understand the barriers they face in order to promote policies that lower these hurdles.
Nesta also aims to promote a high standard of learning and good practice across all accelerators. Despite the increase of programmes available, there is still much more to learn about exactly what works, and how accelerators can improve in order to deliver the most efficient programme model. In light of this, we helped to establish the European Accelerator Assembly in 2013. This aims to strengthen the support environment for web entrepreneurs in Europe, in order to stimulate the growth of web startups.”
How is Nesta working with accelerator programmes?
“We help translate good ideas into action through funding and practical programmes. Interactive tools and resources are available to help you plan, build, communicate and launch your new creative business. We offer social innovation tools, a database of accelerator programmes and a crowdfunding directory. We’re also trying to promote the next generation of digital entrepreneurs through skill development schemes like our Digital Makers programme, which supports and encourages young people to develop digital technology.
How can a startup know which programme is right for them?
“Do your research. Not all accelerators are the same and there is a growing diversification among business models, which also include corporate and government-backed programmes. Startups should consider the mission of the accelerator. For example, a government- funded programme aimed at regional growth may not be suited to a startup that hopes to move to Silicon Valley in the US. Make sure you know what you’re signing up for and talk to other startups about their experiences.”
What is the next step for startups once the programme is over?
“Most startups will still be in their infancy on exiting accelerator programmes and inevitably face tough challenges ahead. In most cases, startups will require further investment and other crucial elements such as an advisory board, new staff and intellectual property advice. Good accelerators help startups plan for the post-acceleration phase and often this involves arranging pitching days or other introductions to investors.”
What are your three tips for a tech startup thinking about joining a programme?
- “Consider your options. Although accelerators are a great way to kick-start your startup, it’s always good to look at all your options before making any decision to see what fits your business model. You may find boot-strapping (financing your company’s startup growth with the assistance of others), crowdfunding, or funding through existing contacts are alternatives worth considering.
- Get all the details. Accelerator programmes are designed to help jump start businesses but they will only be beneficial to you if you are prepared to put in the time and dedication. Before you sign yourself up make sure that you are fully aware of all the details, including the time and costs required of you.
- Ask for advice. Get some honest opinions from those who have already been through the programme. Talk to previous cohorts about their experiences. What did they gain from the process? What were the strengths of the programme? Would they recommend it for your business?”
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