I was at an accelerators' presentation event last week, where a panel discussion with Murat Aktihanoglu (ER Accelerator), Mark Wachen (DreamIt Accelerator) and Kelly Hoey (Women Innovate Mobile Accelerator) took place. I have looked into the accelerators' scene in New York in the past very briefly, so this time I wanted to learn more and share it with fellow entrepreneurs.
What happens to a company that joins an accelerator? Typically, the "boosting mode" period is three months, during which the team members enjoy the community's benefits, the mentorship and access to knowledge and network that can resolve any issues in an efficient way, plus having cash for the business.
However, the accelerators are not philanthropic organizations that enjoy rewarding entrepreneurs simply for having a great idea or putting together a great team. They see themselves as investors to the teams that accept and they make it pretty clear by asking for a good percentage of their company's equity.
The process of getting into an accelerator is very competitive as each program accepts around ten teams. The applicants are encouraged to attend all the networking events prior to applying, so that they find the better fit. If you wish to apply for their summer programs, all the above have deadlines very soon.
Each accelerator has a different positioning and targets groups that do not overlap. For example, WIM Accelerator focuses on women-led or -founded businesses in mobile technology, while DreamIt has developed various programs like the DreamIt Health or the DreamIt Israel.
From the panel discussion, it was clear that they were all actively looking for the next big thing and they would be focusing on the following criteria to find it:
- You: Who are you? Why you are doing what you are doing? Where does your passion come from? What knowledge, experience and network do you bring with you?
- Your team: Does your team have a balance between the hustlers and the hackers? Do you complete each other's expertise or you overlap?
- The idea and your progress: How far along are you with your idea? Have you done your research? Do you have a proof of concept? Do you have your first clients?
- Commitment and physical presence: Are you and your team committed to both the idea and the program so that you all participate full time once you are accepted? For example, if one of your team members is located outside of the US, is s/he willing to come for the entire program's period?
- Investment: Are you willing to give up a significant amount of equity from your company so that you go to market faster?
As an entrepreneur, I believe that the last question is the most crucial one. This is the differential factor for applicants and start-ups. If you already have the knowledge, a great team, a strong commitment to your idea and venture, and access to network that can support you with mentorship and later on with funding, then getting into an accelerator might not be a good idea. In this case, simply focus on doing the actual work and success will come.
My point of view is that accelerators are a great way for many young entrepreneurs to take off their businesses and learn a lot from the process of creating a company. Being part of a cohort and sharing experiences and knowledge with fellow entrepreneurs, receiving mentorship and tangible assets like office space and capital, and being acknowledged for what you are doing, is an amazing start! As in every experience, it is the journey that matters more than the destination itself. On the same side, being a mentor and an investor at an accelerator is also a wonderful opportunity to invest in smart people that bring innovation and have an impact in society's welfare by supporting small businesses that create new jobs.