Startup accelerators do pretty much what it says on the tin: they accelerate the growth of young companies in their portfolio usually in exchange for stock within the business. They do this by combining mentorship, a supportive community, access to tech and services, and office space into a single package – essentially making sure that startups have to hand the resources they need for the everyday running of their business while providing guidance to help with their expansion and development. The function of the accelerator is to create a replicable programme through which startups can grow rapidly, i.e. at an accelerated rate.
Accelerators offer startups a business infrastructure that takes care of the nit and grit of everyday operation – administration, office space, legal advice – and allows founders to focus on the development of their core business.
Techstars is one such accelerator programme. Considered by many to be one of the best accelerators in the world, Techstars operates 23 programmes worldwide, all from a ‘founders first’ perspective. Its main focus is on the mentorship aspect of the accelerator model.
Their three-month programmes kick off with dozens of introduction that Max Kelly, Managing Director of Techstars London, describes as ‘speed dating with mentors’.
‘The companies come in, we do some induction, and the companies meet 80 mentors in the first month,’ explains Max. ‘It’s incredibly powerful. If a company spends 20 minutes one-on-one with a mentor they can get an enormous amount out of that … if they do that 80 times, the compounded effect is enormous.’
Max goes on to explain that Techstars also runs a mini MBA, which familiarises the startup with all the areas they need to know in order to develop.
A unique chance for due diligence
More than just an opportunity for the startup to grow, a company’s time in an accelerator can be very telling to prospective investors, many of whom take up a mentorship role in Techstars projects.
‘They’ll mentor through the programme and stick with one or two companies, and that allows them to do just about the best due diligence they can do,’ says Max, explaining that time spent with the startup and its team can provide invaluable information on how that company operates, how the market is developing and so on.
While they aren’t for everyone – and nor are they a hallmark of a successful company – accelerators can play an important role in pumping up a company’s momentum in an organised, experienced and timely way. For many startups, being part of a community of other founders, mentors and investors has been what’s helped them get off the ground; for investors, accelerators can provide the assurance that the startup has had access to advice and guidance, and offer a glimpse of its gears in action.