Technology is increasingly everywhere – changing the way people communicate, work, play and do business. Along with the rapid growth of technology and startup companies trying to solve problems with innovative technology solutions, we’ve seen the growth of technology accelerator programs looking to help entrepreneurs.
Technology accelerators provide entrepreneurs with education, guidance, and investment capital in exchange for a stake in their companies. There are many different types of accelerators, but the most prevalent accelerators generally cater to very early stage companies, last approximately three months, and focus on nurturing an idea until it is ready to pitch to investors during Demo Day, the culminating event of the program. Y Combinator, Techstars and 500 Startups are a few examples of “traditional” technology accelerator programs.
So how do you decide if participating in an accelerator is right for you and your business? The answer to that question can be based on a number of factors, including the stage of your company, human and financial resources available to you, your management, working style and many others. Perhaps the most important consideration is whether or not you can commit to the program. The old adage, “you only get out of it what you put into it,” can be very true for an accelerator. Accelerators are a big resource commitment — for both the companies and the team running the program. It takes a tremendous amount of human and, sometimes, financial capital to get the full benefit of everything the program has to offer. If you don’t have the resources or can’t make the necessary commitment to get the most value out of the program, then an accelerator may not be right for you.
Once you’ve decided you’re ready to commit to an accelerator, how do you decide which one to choose? With the increasing number of accelerators in the marketplace, choosing the right one for your business can be challenging. Picking the right accelerator can become a little easier if you ask yourself one simple question – What am I looking to get out of it? Having clearly defined goals and milestones for your business, regardless of whether or not you participate in an accelerator, is essential to your success. An accelerator should be viewed as a tool to help you reach those goals. Accelerators can help review early stage products or turn ideas into businesses. Often, participants in an accelerator class will bond together and new business partnerships can be formed or new partners or team members can be found. Introductions to mentors, investors and even customers can also be an incredible benefit of an accelerator. Once you’ve outlined your objectives for an accelerator, make sure you do your homework to figure out which one can best help you achieve your goals – research the team running the program, evaluate the mentors and advisors to see what value they could bring to your business, and don’t forget to review the costs associated with the program.
Now that you’ve launched or improved your product or service, put together an amazing investor pitch, and successfully graduated from your accelerator with a capital investment from new investors after Demo Day, what is the next step to take your business to the next level? Or what if your company has completed a round or two of financing and isn’t an early startup company that can benefit from a traditional accelerator, is a there a technology accelerator solution for you? Relatively new to the marketplace, strategic, or vertical, technology accelerators may be right for you. A strategic technology accelerator can often pick up where a traditional accelerator leaves off by providing access to a vertical market, such as real estate or healthcare. Strategic accelerators are much like traditional accelerators, with education and mentorship components, but are focused on helping their companies grow revenues by providing access and exposure to customers in that vertical. Since it takes time to cultivate relationships with customers or tailor products to fit their needs, strategic accelerators are often longer in duration than traditional accelerators and may have more than one Demo Day throughout the program. Earlier this year, the National Association of REALTORS® and its investment arm, Second Century Ventures, launched the REach™ Accelerator Program to give companies premier access to the more than 1 million REALTORS® driving the U.S. real estate market. Other strategic accelerators include StartUp HealthTM and Healthbox, geared toward health-tech entrepreneurs.
Technology accelerators can add tremendous value to your business and help you take it to the next level, but there are many of them from which to choose and picking the right one is critical. In order to get the maximum benefits from the accelerator, make sure you choose the one that can best help you achieve the goals you have for your business and make sure you have the resources to fully commit to the program.