Real talk about applying for startup accelerators
- Hosted October 12, 2019
- By Ramona Ortega
Building a successful startup requires a lot of specific skills and knowledge. In addition to building a great product and promoting it to the right market, you also have to learn about the options for getting resources and financing. There’s so much to learn and so much riding on every decision … so it can get overwhelming fast.
Before I launched my startup, My Money My Future, I was a corporate lawyer—so I was confident in my ability to wrap my head around the concepts. I quickly realized, however, that I was really starting from the bottom. Luckily, I also discovered that the tech industry has a strong community with many programs that can help you get started, including accelerators and incubators.
If you’re not already working in the tech industry, you may not have heard these terms before. You probably have heard of companies that have participated in these programs, however; Airbnb, Twitch, Reddit, Credit Karma, and many other successful tech startups have all participated in top accelerator programs. These programs help tech startups get the resources (such as capital, mentorship, access to professional networks, and co-working space) they need to succeed.
Are you ready?
If you’re thinking about joining an accelerator or an incubator, it’s all about finding the right fit. The first step is deciding what type of program is best for your company’s current stage of growth. The primary difference between incubators and accelerators is that incubators are designed for startups that are in the very early stages, while accelerators are for existing companies that already have a business model in place.
Do you already have the foundations for your business in place? Do you have a strong business plan? How about a minimum viable product, a go-to-market strategy, a monetization strategy?
If not, then you’re probably not ready for an accelerator. Look for an incubator instead, or plan on bootstrapping your company and potentially applying for accelerators in the future.
Looking for programs
Once you’ve made the decision to apply for an accelerator or incubator, it’s time to look at specific programs. There are hundreds of options—some programs are focused on specific industries, like FinTech, fashion, and cannabis. Some are focused on supporting groups of founders, like women and minorities. Others are for companies delivering a certain type of product, like subscription software, or using specific technology, like blockchain. You name it, and there’s probably an accelerator or an incubator for it.
Once you’ve found a list of interesting programs, it’s time to dive into the fine print. What exactly are they offering, and what are the terms of the agreement? Here are a few things to look for.
- Do you have to move or travel in order to participate? Some programs require that you relocate for a period of time. For example, Y Combinator requires you to move to Silicon Valley for three months. For some founders, this is a huge pro—living in close proximity to other founders is invigorating and motivating. For others, it’s a deal-breaker.
- Consider exactly what the program is offering and what they’re asking for in return. Most programs offer a combination of capital plus other resources in exchange for a percentage of the company. Let’s look at Y Combinator again: if your company is accepted into their program, they will invest $150,000 in your company, bring you to Silicon Valley for 3 months, provide you with intensive coaching and mentorship, and potentially help you get additional investors in the future. In return, they ask for roughly 7% of your company. The terms of each program you consider will be different, so make sure you know exactly what you’re getting and what you’re giving up.
- How will this program benefit your company? You might find many great programs that aren’t the right partner for your company. This decision is a challenging one to answer, and you might not know for sure until you’re deep in the application process. It’s a good idea to start thinking about it now, though. What’s the primary purpose of the program? Who are the people in the network? Why are you excited to work with them?
Putting together a winning application
Incubators and accelerators want to help companies become successful. That means that they’ll offer you resources and support, but they’re also going to be screening your application and looking for indicators that your company is going to win.
When I was applying for accelerators, I realized there are two main qualities that will help you get through the application process.
- You have an impressive team and a strong network. You often hear about people in Silicon Valley who get funded with an idea that they’ve jotted on the back of a napkin. Well, these people generally have extensive experience working at top companies like Facebook or Google. If your founding team has impressive experience, you have a very good chance of getting into a top accelerator.
- You have traction in the market. If you don’t have the advantage of a founding team with extensive experience and a network in the tech community, then having a winning market opportunity plus some traction in the market will increase your chances of success.
In my experience, the best way to increase your chances of acceptance is to really know your company (strengths, weaknesses, and opportunities) inside and out. This knowledge will help you apply for the right programs and give you the confidence you need to succeed throughout the application process.
Another tip—accelerators and incubators will often have events and receptions before and during the application process, so go to them! This is a great opportunity to network, talk with alumni, learn more about the program, and get a sense of what they’re all about.
Don’t get caught up in the allure; do learn from the process
The application process can also be a huge drain of time and energy—two things that are in short supply when you’re building a company. And although you can learn a lot from the application process whether or not you are accepted, it’s important to keep everything in perspective throughout the process.
If you are going to apply to multiple programs, here are a few tips for increasing your efficiency and getting the most out of the process.
- Although each program has a different application process, many of the core questions are similar. Create a document with notes and key points to use in your answers.
- Many applications also ask for a short team video. You can save time by creating a single video that you can use in all your applications.
- Create a calendar with the specific dates and deadlines for each program that you’re applying for. If you get past the first stage of the application, there will usually be follow-up interviews, so make sure you allow plenty of time to prepare for each phase.
Whatever happens, don’t get discouraged
No matter how much time and energy you put into applying for accelerators and incubators, and no matter how much potential you have, there’s a very good chance you won’t get accepted. Many companies apply to accelerators again and again before getting in; others are never accepted. There are many million-or-billion dollar companies that were rejected by investors repeatedly, as well as many successful companies that were entirely self-funded.
It’s never easy to be turned down, but it’s part of the startup experience. Here’s author Seth Godin on why it’s dangerous to put too much stock into early negative feedback:
If you’ve created something that will delight and astound 10% of the marketplace, there’s a 90% chance that the first person who encounters your work will dislike it. He might even hate it. In fact, if you do the math, you’ll see that there’s more than a 70% chance that the first THREE people will hate it. And if you give up then, you’ve just walked away from serving the people you set out to serve.
Startup accelerators and incubators can offer a lot of benefits, and they are definitely worth exploring. It might not work out, though—and if that happens, just remember that there’s only one group of people you have to please: your customers.
- #Entrepreneur Story
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