A common conception among entrepreneurs and founders of early stage startups is that by participating in an accelerator, their idea will be work out and are assured funding from investors.
However, although there has been some truth to this conception, it is not always true. Rather, we need to ask ourselves, just how efficacious are these accelerators programs for the idea or business I want to start or grow? How will an accelerator help me through the process of starting my business? We can answer some of these questions from the results of a recent study on accelerator programs in the United States.
Results:
1. It’s not the idea that matters as much as the quality and effectiveness of the team.
This means that you could have the best startup idea in the world and still fail because the right team was not able to carry it through. Essentially, a team that works well together will be more successful.
2. The reputation of the accelerator program provides legitimacy for its startups in obtaining investor funding.
Accelerator programs who have developed a reputation for graduating great companies (Airbnb, Dropbox, Zendesk) have provided these companies with an enhanced reputation among investor eyes. For example, a VC is more likely to schedule a pitch from a top accelerator program over other applications because the VC knows that well developed companies, with a proper legal structure, product testing and market validation, have typically come from accelerator programs.
3. Accelerators help startups recognize and exploit opportunities through mentoring and peer feedback.
With guidance from the accelerator resources, entrepreneurial teams could be prompted to search in their areas or industries of expertise, or knowledge pooled from the expertise of mentors and peers. In this sense, it is the mentors that assess the nature of the opportunity and decide if the expected or perceived value of the opportunity is worth pursuing and exploiting.
For more results, stay tuned for the next article!