22 Oct 2014

Should you apply to an accelerator? 4 questions you should ask.

By Glen

Accelerators are all different – pick the one that suits you.

Like choosing the university for you, there’s no right or wrong: there’s only what will help you turn your idea or prototype into a company, or what won’t work for you.

To help pick the right programme there are lots of different things you need to consider. Do you like the programme managers? Have they got the right mentors? Do they offer (and do you need) office space? Who can they introduce you to who’s important for you? Do they have a track record of getting further funding? For your type of business? Is more funding what you want? Will they pressure you into an exit?

When I was working on Miavia, my spam filter start-up, we didn’t have the option of going on an accelerator programme. There were a couple of options: Fund yourself from your own savings, F/F/F, (Friends/families/fools) or work evenings & weekends to build some sort of alpha on the back of which you can raise money.

It seems these days that the perceived path to success is to get on an accelerator programme – get your product to market and leverage the investment and networks that an accelerator programme provides, and then get on to an angel or super-angel round and head as quickly as possible for a Series-A round.

It doesn’t have to be like that. These four questions will help you decide what is right for you.

1) What’s your definition of success?

What do you want out of your business? Lots of money? Change the world? Your dream job? Experience?

Loads of people starting up that we know are driven by a desire for a product or service that doesn’t exist– they want to build something they can use. It’s important – as in any investment – to think about what the accelerator programme wants. If your desire is to spend the next 20 years changing the world – like (warning: blatant promotion of BGV portfolio companies) Fairphone, Open Utility, Andiamo, or DrDoctor and the accelerator is looking for a five to seven year exit, you’re probably not quite right. We look for companies who want to use tech to make a big splash solving a social or environmental problem, and we’re not fussy about exits.

2) What support is on offer?

In Good Incubation, we talk about the support on offer from incubators and accelerators – it comes down to money, networks, space, and help crafting and testing your proposition. A place on the world’s best accelerator won’t make your company any more investable: you have to do the work, get the customers and the traction, and prove the value.

It’s always good to take an honest look at your startup – be brutal about it. What do you know and what do you really not know (it’s really OK not to know things. No one knows everything), and then try to work out what it is that you need to get your startup going.

3) Can you do it on your own?

Sometimes the best way forward is to do it. In the early days of Web 2.0 bootstrapping was all the rage – and those days aren’t over – working in the evenings and weekends and getting cashflow to prove things to future investors as well as the market. If you’re able to move forward on your own, then you might not be best placed to make use of the support (from before). This leads me right to…

4) Is it the right time for you to go on an accelerator?

Accelerators and businesses run on cycles – and your dream accelerator may not be running at the right time for you. If you’re looking to hustle sales into schools but the programme runs over the holidays you may end up spinning your wheels (but that time may be just right for you to work on your product). Some programmes are focussed on developing your tech – if you’ve done that, and need to do is hustle and sell, then it’s at a different phase in the business cycle for you – they should screen for that but they may miss it.

When you get that all-important interview with the accelerator programme of your choice, remember that you should be interviewing them as much as they are interviewing you.

Of course, if you’ve gone through the thought process and decided that BGV is the right one for you… our current round is open (until Monday at midnight GMT)

Image credit: By Tsahi Levent-Levi licensed under CC BY 2.0