Last night we had a great talk about what it takes to get into and "survive" an accelerator. If you're a startup, this is a period in which learning is fast, networking is intense and work is done at an astounding speed. And an accelerator could also be your way to seed investment, a better product or a better network of mentors & investors you can tap into along the way.
Below you can find the main insights from the talk we had with Ciprian Borodescu, Co-Founder & CEO at Webcrumbz, Bogdan Iordache, CEO at How to Web, and Alexandru Rada, Founder at Vibe Trace. Enjoy!
The most common type of accelerators is the mentor driven accelerator model. This type of seed accelerator supports the startups with funding, mentoring, training and events for a definite period (usually three months), in exchange for equity.
The differences from startup incubators are:
- the application process for accelerators is open to anyone, but highly competitive (and the quality of the applicant startups has increased over the past 2-3 years)
- a seed investment in the startups is usually made, in exchange for equity
- accelerators focus on small teams, not on individual founders
- the startups have a "graduation" deadline, typically after 3 months of joining the accelerator
- startups are accepted and supported in cohort batches or classes.
What is the best stage in a startup�s development to apply and join an accelerator?
- when a startup wants (and can) accelerat its product
- you definitely need an MVP, traction and/or seed investment
- startups applying today are more competitive and better prepared than in the past years
- applying with just an idea is not enough
- Y Combinator is the only accelerator that works only with ideas, but they have a very different structure (it doesn't include mentoring sessions, for example)
- teams that have an MVP and are trying to find out what market to address that product with - that's where the mentors come in.
What indicators and details can you use to infer if an accelerator is appropriate for your startup�s profile and objectives?
- research the mentors that are involved in accelerator - they're the guys that add value to an accelerator, not the money
- don't choose an accelerator because of the money they can offer
- is the country where the accelerator based an initial market for your product?
- if you're planning on applying to another accelerator after you've graduated from one already, go for a bigger accelerator, one that has more important venture funds backing it. Getting into a smaller accelerator may be a path to take to join a bigger accelerator that wouldn't accept you in the first place.
*What are the main points to cover in your startup accelerator application? *
- the team - teaming up with people you've already done some work with is essential, because of the stressful working conditions in an accelerator
- you should have at least 2 guys in the team (a tech-oriented person and a business wizz)
- describe your product's market opportunity
- include your business plan
- David Cohen, founder of Techstars says the most important elements are: "Team, team, team and market."
- the initial product is not that important, but traction is (it shows that you know a bit about that market).
*What are some goals worth pursuing while in an accelerator? *
- the mentoring sessions (but don't chase every mentor that the accelerator makes available)
- focus on growing
- work on strengthening your team or at least keeping it together
- touch base with angel investors through the accelerator's mentor network.
What are potential investors after when looking at startups in an accelerator?
- the progress that a team makes - help mentors or angel investors keep track of your evolution, so you can increase your chances for an investment at Demo Day.
What types of accelerator events should startups explore the most as opportunities to learn, grow and make themselves noticed?
- the starting party (and all parties for that matter)
- any chance you get to network with the other startups (go to all the lunches together)
- there are also accelerators that enable startups to swap CEOs/CTOs/devs/designers between them for a day/week
- the mentoring sessions, of course
- the preparations for the Demo Day (which could include closed events for pitching)
- take advantage of the media representatives at Demo Day by having a great pitch.
How important are iterations in this stage?
- they're very important, but you may not have the time for them
- it's wiser to itterrate before going to an accelerator
- a team who successfully iterated was Mavenhut, who has 2 developers who kept working long hours while the third member attended mentoring sessions. They also managed to do it because in gaming you can get feedback quite fast.
- don't limit itterating to your product. Also itterate your pitch until you get it as close to the right approach as possible.
What types of benefits extend beyond graduating from an accelerator?
- the network you build while in the accelerator
- don't leave the accelerator area immediately after graduating - you'll leave all the network you built in 3 months there
- you can leave a business guy there and send the technical team home and keep building the R&D team remotely.
If you want to see the full talk, the recording of last night's live streaming is also available and you can find some pictures on our Facebook page. For a more than comprehensive list of accelerators around the world, check out this FS6 list.
See you next time!