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You will most likely relate to the following startup accelerator FAQs (frequently asked questions) to evaluate the potential benefits and drawbacks of the accelerator program you are about to join. This is especially true for a founder considering whether an accelerator program is the right fit for your business. However, the answer isn’t always straightforward. There are several factors to consider before making a decision, including timing, goals, and type.
Timing is critical when evaluating whether an accelerator program is right for your business. You’ll want to consider whether you’re at a stage where an accelerator program can provide the most value. Additionally, you’ll need to assess whether you have the bandwidth to commit to the program’s requirements. Goals and type are also key considerations that can help you determine whether an accelerator program aligns with your business needs.
What are Frequently Asked Questions?
If you’ve ever found yourself with a question about a product, service, or topic, chances are you’ve stumbled across a Frequently Asked Questions (FAQ) section. These sections are designed to provide quick and easy answers to common questions without requiring users to search through lengthy articles or contact customer support.
Why are FAQs helpful?
FAQs are a valuable resource for both consumers and businesses. For consumers, they provide a convenient way to find answers to common questions, without having to spend time searching for information. For businesses, FAQs can help reduce the number of customer support inquiries, freeing up time and resources to focus on other areas of the business.
Overall, FAQs are a simple yet effective way to improve the user experience and provide valuable information to customers. Startup accelerator FAQs are specifically crucial because they help both the startup founders and startup accelerators evaluate each other and determine whether either of them is a desirable fit for a good return on investment. Below are some of the startup accelerator FAQs for both startup founders and accelerators:
Is it the right time?
1. Have you launched your product?
This is one of the startup accelerator FAQs that is important if you have already launched your product or are close to launching. An accelerator program can be a great fit for your startup. Most accelerators provide weekly meetings to review your key performance indicators (KPIs) that you set in the first week. Reporting actual growth in terms of the number of customers and revenue is more impactful than vanity metrics like page views or social media followers.
Tracking KPIs early on can help you identify if your product has a market fit, and accelerators can help you find product-market fit if you haven’t already. However, if you haven’t launched yet or are far from launching, it may not be the ideal time to apply for an accelerator. Consider applying for the next cohort when your startup is better aligned with the program’s goals.
2. When did you start your business?
This is also one of the common startup accelerator FAQs because if you are among those who started your business within the last 1-2 years, an accelerator program could provide valuable feedback and advice to lift your business off the ground. Accelerator staff, mentors, and investors are more likely to offer unique insights if your startup is still in the early days.
However, if you’ve been working on your startup for 3+ years without any pivots or traction, it may signal that you are struggling. Be prepared to explain your execution strategy if you’ve been working on your startup for a few years.
3. Have you raised a significant round of funding?
Providing funding for startups is among the core reasons accelerators exist and why startups join their programs. Therefore, startup accelerator FAQs tend to revolve around funding, especially if the accelerator program in question has raised significant rounds in its years of existence.
The answer to this FAQ is that if you have already raised a seed round, consider the value of the investment from the accelerator. Some accelerator programs can be expensive and take a lot of equity early on. Startups that are bootstrapped or have raised a small friends and family round are typically the best fit. Accelerators can provide help with fundraising, but if you’ve already closed a round on your own, it may be repetitive content. However, joining an accelerator solely for the funding may not be the right reason to join.
4. Do you have a co-founder?
The startup accelerator FAQs about founders and co-founders tend to be directed toward startups. While it is possible for solo founders to be accepted into an accelerator program, having a co-founder can be a significant advantage.
With all the programming, internal and external meetings, and running/maintaining your business day to day, you’ll be pulled in many directions during the program. Having a co-founder can help divide and conquer responsibilities. Both co-founders can attend all core programming, and responsibilities can be split based on job function.
What Are Your Goals?
5. Is Your Main Goal of the Program to Close a Round of Financing?
Accelerators serve different goals, ranging from creating networking platforms to providing mentorship and funding for startups. For instance, if your primary goal is to secure funding, then you should look for an accelerator program that has a proven track record of helping startups raise capital.
Accelerators typically dedicate a significant portion of their program to fundraising, and you’ll learn critical skills such as how to build a pitch deck, how to identify potential investors, and how to manage your investor pipeline.
It is also essential to research the accelerator’s history in helping its alumni companies fundraise post-program. Techstars, for example, hosts Investor Weeks, inviting over 100 venture capitalists and angel investors to meet with up to five companies, curated by their investment thesis, verticals of interest, check size, and current portfolio.
6. Is Your Main Goal of the Program to Grow?
Startups are always looking to grow. Hence, then you should come into the program with a clear growth target in mind. Founders who set specific goals for revenue or customer acquisition tend to outperform their peers. During the program, you’ll set weekly micro-goals to help you achieve your overall target. Being part of a cohort of companies can be helpful because it provides accountability and support.
7. Is Your Main Goal of the Program to Build Your Network?
As a startup with the goal of building your professional network, you should research the accelerator’s staff and mentors to ensure they have the expertise and connections you need. Look for alumni from the program who can provide valuable insights and introductions. During the program, you’ll meet hundreds of people through mentor meetings, workshops, and investor meetings. This makes accelerators an excellent place to build your network, especially if you’re new to the city or startup ecosystem.
Type of Business
8. Do you have a niche business?
When considering an accelerator program, it’s important to think about whether your business falls into a specific niche or vertical. Some accelerators, such as Food-X, Metaprop, and Techstars vertical programs, focus on specific industries or business models, while others, like Y Combinator, 500 Startups, and Techstars city programs, accept startups from all verticals.
If you have a niche business, it may be beneficial to join an accelerator that specializes in your industry. As a result, you will be surrounded by other businesses in the same vertical, and all mentors and accelerator staff will have a strong background in your industry. On the other hand, industry-agnostic programs can expose you to a diverse set of mentors and programming that can provide different perspectives.
When evaluating accelerator programs, it’s important to consider the background of the program staff. Make sure they have relevant experience and a track record that can help you and provide you with the connections you need to grow your business.
According to First Round’s 2019 State of Startups review, 81.7% of founders who have gone through an accelerator or an incubator would recommend it to a fellow founder. Accelerators can be a great option for founders looking to grow their network and startup in a condensed timeframe. With a set end date and a condensed timeline of approximately three months, founders have a forcing function to help them grow fast and iterate early and often.
As you evaluate accelerator programs, take the time to identify the type of accelerator that is the right fit for you and the current state of your business. Consider the following questions:
- Does the accelerator specialize in your industry or business model?
- What is the background of the program staff, and how can they help you?
- What is the timeline and structure of the program?
- What kind of resources and support will you receive?
- What is the success rate of the accelerator program?
- What kind of network will you have access to?
- How much equity will you need to give up?
- What is the overall culture and community of the accelerator program?
