In today’s new economy, founders build and grow innovative businesses through the help of a startup accelerator and the programs they operate. Around the globe, a multitude of startup accelerators are helping bring together founders, businesses, investors, public entities, and corporations with the common goal of helping startups grow.
What exactly is a startup accelerator? By definition, startup accelerators support early-stage, startups through an intensive program of education, mentorship, and finance or investment support. Founders enter the program for a specified timeframe as part of a cohort of startups. Programs range from six weeks to up to six months. The startup accelerator experience includes intense, immersive education that jumpstarts startup growth by compressing years’ worth of hands-on experience into a short timeframe.
There are two types of startup accelerators: for-profit and nonprofit. For-profit accelerators are funded with private capital from investors targeting to produce long-term revenue. They usually take a small portion of startup equity in exchange for the support they provide. Nonprofit accelerators tend to support industries that deliver a certain public benefit. The nonprofit startup accelerators generally do not take equity but still offer lots of support.
A majority of startup accelerators, follow the traditional “cash-for-equity” model wherein a small amount of seed money in a startup is invested in exchange for equity. This model is changing though, as more accelerators reconsider and no longer rely on generating revenue from exits. As accelerators are exploring new models of income generation, many are exploring alternative models in addition to exits. Nonetheless, across the globe, startup accelerators emerging as vital operators within public and private spheres. We should understand their potential to effectively facilitate the exploration and development of successful startups.
I am personally involved in two global startup accelerators: Founder Institute and Cleantech Open. The Founder Institute is the world’s premier idea-stage accelerator and startup launch program. Founder Institute (FI) operates in about 170 cities around the globe. The program has an incredible success rate. Since its launch, FI has helped launch more than 2,300 companies (72% of which are still operating) with a portfolio value of more than $15 billion.
Cleantech Open is a non-profit, startup accelerator that focuses on the clean technology area. It is active across the United States in eight regions and also runs a global ideas competition. Since 2005, the Cleantech Open has awarded over $6 million in cash and services. And the 1000+ companies in the Cleantech Open’s accelerator programs have raised more than $1.1 billion in external capital.
Below are the Top 10 Seed Accelerators (By Capital Investment) according to the Global Accelerator Report 2016:
- 500 Startups is a global project capital seed account with a network of startup programs which has working experience at companies such as PayPal, Yahoo, LinkedIn, Google, Facebook, Instagram, YouTube, Twitter and Apple.
- Techstars provides links to other businesses, community leaders, professionals, mentors, alumni, investors, and corporate partners through the Techstars Worldwide Entrepreneur Network which help their companies grow.
- StartX is a non-profit organization runs for Stanford-affiliated entrepreneurs. They advance the development of the best entrepreneurs through experiential education and peer learning.
- SOSV accelerates their founders’ big ideas for positive change. They partner with startups, guide them at every stage of their development, and form communities that provide long-term connections through seed, venture and growth-stage funding.
- Elemental Excelerator works alongside the Elemental practice of Emerson Collective, which focuses on establishing a strong the relationship between humanity and nature through equitable, measurable, and new solutions.
- Start-Up Chile is a public startup accelerator by the Chilean Government for promising businesses to assist their startups and use Chile as a foundation.
- Wayra is dedicated to the internationalization and expansion of UK-based start-ups, comprising those coming from migrant businesses and by people from diverse backgrounds.
- IMPACT Accelerator, consistently being one of the top accelerators, recently launched IMPACT Growth, focused on improving high-performing excellence to the next level.
- Entrepreneurs Roundtable Accelerator offers direct help, pools seed capital, along with great location with a skilled team to positively impact the trajectory of new startups.
- MassChallenge is a nonprofit organization with a mission to support startups and not take equity.
Whether you are a novice or experienced entrepreneur looking to launch a new business venture, you ought to consider launching through a startup accelerator. A recent Brookings Institution analysis showed that participation in a quality startup accelerator can really improve outcomes for participating startups.
Interested in learning more about startup accelerators and how they can jumpstart the growth of your new business venture? Contact me today and let’s talk.