If you are in the tech world and feel you have an idea or concept that can positively change the world, but you do not know where to start? You could fight to get a few minutes with the top VCs in Silicon Valley, or you could turn to a startup accelerator. These are companies or organizations that mentor fledgling startups on their concept, execution and assist with funding in the process.
Over the years, startup accelerators, like TechStars, 500 Startups and Launchpad LA, have helped many brilliant young minds to realize their tech dreams and launch some amazing companies. This has proven to be one of the most reliable methods for achieving success in the startup world, or at least to get enough momentum to take an honest crack at it. These programs give you a chance to build on your startup while getting a proverbial cheat sheet from some of the industry’s best minds. What’s more, if your startup is particularly promising, they may even offer you seed funding in exchange for less than 10% equity in your project.
The first step on your road to greatness is to submit an application to the accelerator of your choice. Accelerators are based all over the country, so you might want to consider which ones are closest to you. Because of the high demand for spots in these programs, competition is fierce and you need to start working on the admission process well in advance. For example, at the time of this publication, the earliest you can get into TechStars would be winter of 2015 with an application deadline of 15th August 2015. This lead time reveals just how many would-be tech moguls are lining up to get their shot. To improve your odds of being admitted, make sure you’ve prepared a well thought, concise plan for your new venture and what kind of support you’ll need from the accelerator if you get in. If you’re one of the lucky ones to be selected, prepare for the ride of your life!
Depending on which accelerator you join, you will either get assigned a team of mentors or select your own from their pool. These could be employees at accelerator or influential people from partner companies that they have worked with before. The mentors will be able to guide your project in the right direction and give you a more informed template of how to have a successful startup. This process not only builds a sense of community, but also gives you connections and a chance to build on a future network to work with.
During their time at the accelerator, most programs will provide budding entrepreneurs with office space, telecom services, hosting plans, etc. These ‘perks’ are meant to remove some of the typical obstacles most startups face when preparing to launch allowing you to focus on the product. Once they get settled in, participants will attend forums, seminars, workshops and group meetings to learn everything they can from their mentors. This part of the program usually takes about one month.
After selecting mentors, it is time to get down to business. At this point of the program, you will begin execution of your project. This means long hours, hard work and ironing out the kinks to ensure that your project is perfect and on par with other successful startups that have been there before. Also around this time, participants need to figure out how they will acquire the finances needed for the project. This gives them a chance to not only master their skills in interacting with investors, but also creating a network of future shareholders or financiers for their startups. This could go on for another 2 to 3 months, depending on the accelerator.
At the conclusion of the program, most accelerators will hold an event where all of the teams can make a final presentation of their projects. Often called a demo day, these presentations give founders and entrepreneurs a chance to pitch their startup to potential investors and financiers.
One other thing that startup accelerators might do as part of their program is to offer you funding in exchange for a stake in your startup. For example, Launchpad LA can invest anything between $25,000 and $100k as funding and a spot in their offices to carry out your work with the first $50k being offered in exchange for 6% of your shares. Techstars will offer around $118,000 investment in exchange for between 7%-10% share in your startup. 500 Startups will invest $100k in exchange for 7% and also offer an investment net amount of $75k and charge about $25,000 as a program fee.
Getting a chance to work with an accelerator could mean the difference between launching your idea into the world or having your dream crushed when someone else get to market first.