startup accelerator

MaryW commented on the word startup accelerator

Startup accelerators support early-stage, growth-driven companies through education, mentorship, and financing. Startups enter accelerators for a fixed-period of time, and as part of a cohort of companies. The accelerator experience is a process of intense, rapid, and immersive education aimed at accelerating the life cycle of young innovative companies, compressing years’ worth of learning-by-doing into just a few months.

Susan Cohen of the University of Richmond and Yael Hochberg of Rice University highlight the four distinct factors that make accelerators unique: they are fixed-term, cohort-based, and mentorship-driven, and they culminate in a graduation or “demo day.” None of the other previously mentioned early-stage institutions — incubators, angel investors, or seed-stage venture capitalists — have these collective elements. Accelerators may share with these others the goal of cultivating early-stage startups, but it is clear that they are different, with distinctly different business models and incentive structures.

Ian Hathaway, What Startup Accelerators Really Do, Harvard Business Review, March 1, 2016.

What do accelerators do? Broadly speaking, they help ventures define and build their initial products, identify promising customer segments, and secure resources, including capital and employees. More specifically, accelerator programs are limited-duration programs—lasting roughly three months—that help cohorts of ventures with the new venture process. They usually provide a small amount of seed capital, plus working space. They also offer a plethora of networking, educational and mentorship opportunities, with both peer ventures and mentors, who might be successful entrepreneurs, program graduates, venture capitalists, angel investors, or even corporate executives. Finally, most programs end with a grand event, usually a “demo day” where ventures pitch to a large audience of qualified investors (Cohen 2013).

. . . We thus define the Seed Accelerator as follows:

A fixed-term, cohort-based program, including mentorship and educational components, that culminates in a public pitch event or demo-day.

Susan G. Cohen & Yael V. Hochberg, Accelerating Startups: The Seed Accelerator Phenomenon, March 2014.

March 2, 2016