Let’s say you get a fantastic idea for a new business: what now?
Do you pitch it to investors? Do you crowdfund your operations? Do you go solo and hope for the best?
There are a variety of different ways to seek funding for your business ideas, but one increasingly popular funding method is to seek a startup accelerator.
What is a Startup Accelerator?
A startup accelerator program essentially connects you with investors, other businesses, educational resources and often mentors in order to help you grow your business and accelerate your growth.
Think of it as a way to boost your business in a holistic fashion; by offering you advice and assistance on virtually every aspect of your business–but for a price.
Do Startup Accelerators Work?
It might sound like it’s too good to be true, but startup accelerators are actually an interesting and effective way to seek funding. Around $20,000 to $50,000 in capital or grants is awarded to startups in an accelerator program which is a considerable amount of money that can achieve great things. Programs usually last around 3 to 4 months and applications are open to anyone.
If we look at the numbers, there are currently around 186 accelerators in the US and Canada that have invested a combined $107.3 million, funding around 3,296 different companies across the world between 2012 and 2017.
Some of the biggest investments are in the advanced manufacturing and robotics industry with blockchain and agricultural technology taking a close 2nd and 3rd place. Below that is artificial intelligence which has seen a much lower growth rate.
Applying For a Startup Accelerator
The first hurdle to overcome is finding the right accelerator that will help you. These are essentially people with an interest in investing in new and unique ideas.
Investors will typically ask about your products and services like any other business proposal idea and they’ll even ask to meet with your team. You can often apply online and the entire interview could be conducted over the internet, but it’s often a good idea to prepare yourself for an in-person visit.
As you apply, you will gradually return for future interviews as the list of potential prospects thins out. In fact, statistics show that in every 3,000 applications, only around 45 to 90 are actually accepted and given investment in money, education and mentorship.
Accelerators can be local to your business’s location and this is helpful for when you need to meet in-person with people such as your mentors or teachers that will educate you on how to run your business or refine your ideas.
Is an Accelerator Right for Me?
Almost anyone can take advantage of an accelerator program, but it’s important to understand that acceptance rates are very low. Competitive accelerators can have an acceptance rate of less than 10%, even as low as 1-3% in some instances.
Accelerators look for ideas and products that can disrupt the market and take advantage of their wealth of resources, so if you’ve got a cookie-cutter idea then this isn’t for your business.
However, if you feel like your ideas have the ability to take off and become successful products or services, then you may want to consider an accelerator as a reliable source of funding, exposure and education.
Source : MassChallenge