Do they pave the path for startup success?
Executive Summary
Are business accelerators the key to success for early-stage businesses and startups? Many entrepreneurs think so. Since the first accelerator, Y Combinator, was founded in the United States in 2005, the number of accelerators has increased dramatically. More than 180 accelerator programs worldwide have helped some 6,000 companies attract in excess of $22 billion in funding from all sources. Yet, not everyone agrees that participating in an accelerator guarantees that a startup will succeed.
Among the key takeaways:
Not all accelerators are equal: Startups should research their options before committing to an accelerator and, once accepted, be clear about what they want to gain from their experience.
Accelerators involve trade-offs: Entrepreneurs give up equity in return for seed money and a chance to pitch potential investors.
Joining an accelerator isn’t the only way to grow a new business. There are a number of free resources available to entrepreneurs.
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Resources for Further Study
Bibliography
Books
Deering, Luke, Matt Cartagena and Chris Dowdeswell, “Accelerate: Founder Insights Into Accelerator Programs,” FG Press, 2014. This comprehensive guide features 230 accelerator programs spread across 46 different countries.
Stross, Randall, “The Launch Pad: Inside Y Combinator,” Portfolio, 2013. A journalist offers a unique inside tour of the world of software startups.
Articles
“Startup competition guide: A Giant List of The Best Business Contests,” Grasshopper Blog, http://tinyurl.com/
Fallon, Nicole, “Accelerator Programs 101: How to Apply and What to Expect,” Business News Daily, June 5, 2015, http://tinyurl.com/
Hathaway, Ian, “What Startup Accelerators Really Do,” Harvard Business Review, March 1, 2016, http://tinyurl.com/
Wasik, John F., “Help for a Business Idea Trying to Catch Fire,” The New York Times, Oct. 12, 2016, http://tinyurl.com/
Reports and Studies
“Creating Inclusive High-Tech Incubators and Accelerators: Strategies to Increase Participation Rates of Women and Minority Entrepreneurs,” JPMorgan Chase & Co and the Institute for a Competitive Inner City, http://tinyurl.com/
Dempwolf, C. Scott, Jennifer Auer and Michelle D’Ippolito, “Innovation Accelerators: Defining Characteristics Among Startup Assistance Organizations,” Small Business Administration, October 2014, http://tinyurl.com/
Hathaway, Ian, “Accelerating growth: Startup accelerator programs in the United States,” Brookings Institution, Feb. 17, 2016, http://tinyurl.com/
The Next Step
Financial Incentives
MacBride, Elizabeth, “Dubai Has $300 Million To Entice The World’s Best Startups To Its Accelerator,” Forbes, Dec. 29, 2016, http://tinyurl.com/
Theis, Michael, “Accelerator raises millions to help immigrants start Austin businesses,” Austin Business Journal, Dec. 21, 2016, http://tinyurl.com/
Vanian, Jonathan, “Samsung Pumping Millions into Artificial Intelligence and Virtual Reality Startups,” Fortune, Jan. 4, 2017, http://tinyurl.com/
New Accelerators
Ciecko, Brendan, “Museums, startups and accelerators… oh, my!” TechCrunch, Jan. 2, 2017, http://tinyurl.com/
Collins, Terry, “Startups now have a direct connect with NFL players,” CNET, Dec. 10, 2016, http://tinyurl.com/
Smith, Ryan K., “Bitcoin-Based Startup Aims to ‘Decolonize’ the Diaspora,” Ebony, Oct. 20, 2016, http://tinyurl.com/
Organizations
AngelPad
https://angelpad.org/
In the past five years, AngelPad helped launch more than 130 companies.
Brand Entrepreneurs Bootcamps
http://brandentrepreneurs.com/
The group offers free daylong sessions providing practical advice for startups in New York City, Boston, San Francisco and Washington.
DreamIt Ventures
3401 Market St., Philadelphia, PA 19104; or 116 W. Houston St., 3rd floor, New York, NY 10012
http://www.dreamit.com
This accelerator has made 210 investments in 194 companies.
500startups
444 Castro St., Suite 1200, Mountain View, CA 94041; or 814 Mission St., 6th floor, San Francisco, CA 94103
http://500.co/
This accelerator manages $200 million in assets and invests in more than 1,300 technology startups.
Startupbootcamp
International House – Rainmaking Loft, 1 St. Katharine’s Way, London, E1W 1UN
https://www.startupbootcamp.org/
This was the first accelerator in Europe.
Techstars
1050 Walnut St., Suite 202, Boulder, CO 80302
http://www.techstars.com/
Located in multiple cities including Austin, Texas, New York City, London and Berlin.
Y Combinator
320 Pioneer Way, Mountain View, CA 94041
https://www.ycombinator.com/
The original accelerator, it has funded more than 1,200 startups since 2005 and typically invests $120,000 in each.
DOI: 10.1177/237455680303.n1