What are Startup Accelerators and Are they worth it

Pratiksha Bajikar Pratiksha Bajikar
Mar 19, 2021 5 min read
What are Startup Accelerators and Are they worth it

There are several stages involved when we think of a business idea. Funding, labor, target audience, pitches and the list goes on. Every startup has a pre-success story. Some of the greatest startups have taken birth in their founderโ€™s garages, some in a friendly gathering, and some with a simple vision of providing what is lacking.

Startups are everywhere. Every sector of the ecosystem has an emerging startup and is gaining ground with national and international funding. Sometimes, an amateur entrepreneur might come up with a really good idea but might not know the path towards execution. Or talk about an experienced player launching a new product but doesnโ€™t know who to target.

There are institutions like angel investors, incubators, accelerators, and funding companies who are then a resort these new entrepreneurs run to. These institutions help the startups primarily with fundraising, polishing their products, and making them market-ready.

Difference between Incubators, Angel investors, Accelerators
What are Startup Accelerators
Are Startup Accelerators worth it
Startup Accelerators around the world
Indian Startup Accelerators
FAQ

Difference between Incubators, Angel investors, Accelerators

Were going to contemplate which of these institutions are best suited for startups. Let us find out what distinguishes them from each other.

So as we distinguish between these institutions, we find that each of them differs in the style of investment, mentorship, and education. Incubators and angel investors are along similar lines. In this article, we will be diving deep into how accelerators work for startups and how they contribute to their success or failure.

What are Startup Accelerators

Startup accelerators, also known as seed accelerators are short-term mentoring programs. They are cohort-based, that help emerging companies to deseed their ideas into a fruitful selling product or service. They also include educational guidance and financial backup.

They basically pull in all the components and aggregate them for the startup to get it up and running. Startup accelerators aim to solve basic challenges like fundraising and mentorship with the help of cohorts.

Are Startup Accelerators worth it

The accelerator base in the global ecosystem is large enough to confirm that accelerators are giving the required knowledge and momentum to launch themselves in the cut throat competitive market. Acknowledging this very fact, many large companies such as Microsoft and Jio Infocom are launching their own accelerator programs.

Startups are the future of the every thriving economy. And accelerators are the driving force that is helping these startups gain new grounds in terms of capital, market study and product launching.

The follow ups in the accelerator programs guide these startups to further gain momentum and propel towards larger goals. Hence, it is safe to say, that start up accelerators are absolutely worth it.

Percentage of accelerators offering different forms of business support
Percentage of accelerators offering different forms of business support

Startup Accelerators around the world

Startup incubators and accelerators have a vital role in the making of a successful company. From working space, mentorship to fundraising, accelerators give it all to the startups to embark on their success journey. Hereโ€™s a quick glance at the worldโ€™s top accelerators.

Y Combinators, USA

Y Combinators is considered the supreme accelerator in the world. Founded in 2005, by Paul Graham, Y Combinators has funded 2000 plus startups including Dropbox, Stripe, Airbnb, Instacart, Twitch, Coinbase, Reddit, and Weebly.

Among the 13000 applications on the internet every year, Y Combinator selects about 200 to 240 projects to work on. In their biannual 3-month training program, relocates you to silicon valley to work closely with their team and encourages further investments in your startup. In terms of investment, they give $150000 in exchange for 7% equity in the startup.

TechStars, USA

TechStars is a worldwide network, with a presence in 15 countries, which is known for accelerator programs that have produced 1000 plus companies valued at 8 billion. Uber, DigitalOcean, Twilio, and SendGrid are amongst a few startups which are a result of the accelerator venture capital fund, TechStars Venture.

The TechStars Global Entrepreneurship Network is spread across 15 countries which provides startups with networks, mentors, consultants, investors, and more. They give a $100000 convertible note out of which TechStars contributes $20000 in return of 6% equity.

500 Startups

Located in San Francisco, California, 500 Startups was founded in 2010 with a goal to support emerging entrepreneurs worldwide. A capital venture managed by 150 employees from 20 countries around the globe, spreads investments in 70 plus countries.

They have aided firms such as Apple, PayPal, Google, Facebook, Instagram, YouTube, Yahoo, LinkedIn, and Twitter with mentorship and functional wisdom. They offer a 4-month seed program with a $37000 participation fee which unlocks access to networks, investors, and free workspaces. They provide $150000 in exchange for 6% equity.

Indian Startup Accelerators

Today, India alone has more than 70 startup accelerators spread across the country. Revxx Accelerators, BLS Accelerators and India Accelerators are a few who are putting themselves up on the map.

The founder and Managing director of India Accelerators, Ashish Bhatia, in an interview with Inc42 said, "Accelerators play the role of an aggregator and bring all the components together to provide support to startups to grow at an accelerated pace and increase their overall chances of survival.โ€

Industry veterans believe that most startups have a chance of failure in the early stages of execution with little or no knowledge and depth of the market. Accelerators then, help these companies to strategize and pushes them towards pragmatic solutions.

โ€œThough entrepreneurs are primarily blamed for their failures, it is an equal responsibility of the accelerator to gauge its own potential in supporting a startup that requires a strong go-to-market (GTM) strategy to sustain the business,โ€ says Riya Aggarwal, CEO of BLS Accelerator, a startup accelerator based out of Delhi.

Venture Catalysts

Venture Catalyst is Indiaโ€™s largest and the first start up accelerator. HomeCapital, Go Mechanic and Global esport are a few noteworthy mentions of its investments. Founded in 2006, Venture Catalysts offer $50000 to $1 million worth investment to emerging companies.

Collaborating with Microsoft, Amazon and IBM, it conducts seminars and monthly workshops for budding entrepreneurs in major cities of India as well as cities like Hong Kong, London and Doha.

Startup Boot camp, Ignite, Melbourne Accelerator Program and Metavallon are also among the top startup accelerators around the globe providing hands-on training and equity options to emerging companies.

FAQ

What is the difference between an incubator and an accelerator?

Accelerators focus on scaling a business while incubators are often more focused on innovation.

How do startup accelerators make money?

Accelerators usually provide seed investment for each startup for an equity stake in the company.

What are the best accelerators?

Y Combinator, Techstars, 500 Startups, Venture Catalysts, StartupBootCamp are some top accelerators.

Conclusion

The follow ups in the accelerator programs guide these startups to further gain momentum and propel towards larger goals. Hence, it is safe to say, that start up accelerators are absolutely worth it.

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