The pandemic of Covid-19 has resulted in the loss of 225 million jobs around the world. And this has thus resulted in the unexpected growth of innovation and entrepreneurship. As unemployment has inspired and pushed more and more people to do something of their own through entrepreneurship.
If you are a budding entrepreneur and have a mind-blowing business startup idea, along with its prototype or maybe the actual product itself. But don’t know how to execute the same and make it a recognized one in the industry? Well, I Gordon Grigg, a life coach and business consultant from Nashville, Tennessee, will be telling about business accelerator firms.
A startup accelerator firm is a mechanical support that helps startups succeed and reach new elevated heights in the industry. I will be telling you more about what they do and how they work in this comprehensive and interesting article.
What are startup accelerators?
As its name suggests, a startup accelerator is a program that helps startups accelerate their business growth. It is a program through which startups and aspiring entrepreneurs receive support and assistance that helps them to evolve. This is a mentorship-based program that provides entrepreneurs with intensive support, guidance, advice, direction, and resources for a set period.
Accelerators are present all around the country and offer 3-4 months of comprehensive help. Every accelerator program has an expert team of members or some experienced entrepreneurs who will help you in gaining exposure by assisting you in completing & developing the product if it is in the prototype stage by honing your business model and connecting you to potential investors.
However, the guidance and funds provided to you come with a price. Just like other equity funding, the entrepreneur needs to slice 5% to 10% of their startup’s equity to the accelerator program while signing the agreement in exchange for training and the small amount of initial funding done by the accelerators themselves.
Are you thinking, if a business accelerator program is worth investing in your business stakes? Well, the answer to this is yes, for most of the fresh startups who have just entered the dominating industrial world. First-time startups require a lot of help and the accelerators can help you:
- Learn from the mistakes and achievements of the past startups
- Make connections with the potential investors
- Tell you how to make the best and the most convincing pitch
- Connect you to certain experts who can help you understand the product-market fit and can even help you develop a go-to-market plan
- Explaining the circle of investors’ funds, and other important points of consideration
However, you should be careful while choosing the accelerators and not serve your startup’s equity on the platter to those who offer off-the-shelf help.
What do accelerator programs offer to startup business firms?
Enrolling yourself in a three to four-month accelerator program is the best way to make your startup business run on the right track to success. Mentioned below are some of the facilities that the startups will be offered upon signing a contract with an accelerator firm.
- Comprehensive Support – Operating a startup alone can be challenging. Without any external support in the industry, you will not be able to figure out the right connections and right business methods. If you get yourself associated with an accelerator, you will get financial, technical, and mental support from mentors and other people who are experts in the field
- Investors’ access – Accelerators program alone, does not provide much funding but what they do is connect you directly to prospective investors who could be interested in your business idea and want to invest in the same
- Development of skill – An accelerator program focuses on teaching and providing you with accelerated business knowledge and certain skills that are essential for running a business, managing finance, sales & marketing, and some other technical skills required for the effective running of the business
- Knowledge about risk management – Every startup founder has the risk of failing in the back of their mind. The risk prevails in everything you do, the market you choose, the product you have made, the concept you are selling, and various other business aspects. An accelerator understands your risk and helps you to reduce the risk by helping you manage your business effectively
- The long-term and wider aspect of business – Budding entrepreneurs of the industry do not have the vision to foresee the future of their business beyond the initial six months. However, it is necessary to have an overview of the same for running the business efficiently. The mentors associated with the accelerator program help the entrepreneurs to become farsighted and understand all the complexities of the startup business
- Morale and motivation – The accelerator program work in a collaborative environment, where they constantly motivate you to keep going and moving forward. Regular motivation helps entrepreneurs to clear all the self-doubts and challenges resonating in one-self. Also, accelerators work together as a team to remove hurdles if any
- The long-term continued support – Even after the designated period, the accelerator program ends, but the support will continue to remain the same. Accelerators develop a long-term relationship with the entrepreneurs and their alumni network, which helps you in seeking investors and getting assistance whenever necessary
What to look for while applying to an accelerator program?
You will find hundreds of accelerator programs in the United States. In the words of, Michael Wolfe, getting into a quality accelerator is important. If you as an entrepreneur enroll your startup into an accelerator program that is not well known or as respected as Alpha Lab, RevUP, JLabs, Entrepreneurs Roundtable, Y Combinator, Mucker Labs, etc. then the benefits will not be clear.
Look for such accelerator programs that either have a great team of mentors belonging to different niches or choose a program that only specializes in the same sector as your startup. Applying to a well-respected startup and getting accepted into one, can prove to be difficult sometimes. But mentioned below are some points that you should look at in an accelerator before applying to one.
- The program should be providing financial or technical assistance to the entrepreneurs
- Should provide business owners with proper resources such as access to funding of a minimum of $5K per month, permit to attend seminars and educational workshops on various business-integrated topics, and one-on-one group or individual mentorship from mentors, financers & industry experts
- The program should also provide technical assistance such as various tools and resources for business planning, marketing tips, finance, pitching, etc.
At the initial stage, every startup faces a lot of problems and issues. But, with the help of the acceleration program, the hindrances get resolved, products can be successfully developed, entrepreneurs get the required funding & assistance, and also get opportunities to get closer communication with top industry entrepreneurs, business persons, investors, and customers. So, I Gordon Grigg, a life coach and business consultant from Nashville, Tennessee would surely advise you, that having assistance for the startups through accelerator programs at the initial stage not only acts as a boon for them but also helps the business reach substantial heights in a short period.