During the boom in startups and venture capital, new players in startup ecosystems emerged. Startup accelerators are one of them, supporting early-stage startups along with other similar but distinctive institutions like incubators, angel investors, and venture capitalists.
Startup accelerators support growth-driven companies in their early-stages through education, mentoring, and financing. Since it is aimed at accelerating the life cycle of young innovative companies, the accelerator experience is intense, rapid, and immersive, compressing years’ worth of learning-by-doing into just a few months. More than 200 accelerator programs are active in the US, and many more globally. The well-known Y Combinator and Techstars are investor funded, and there are other cases sponsored by universities or corporations. Just like any other equity funding, accelerators take startups’ equity (generally 5%~10%) in return for funds and guidance. While there are lots of confusions with other similar organizations such as incubators or angel investors, accelerators are said to be unique in their inclusion of all four criteria:
Startup accelerator may seem to be undoubtedly good path for startups, but there are also disadvantages that should be considered. If the startup is not in the right stage for accelerator, either too early or too late, the benefits can’t be maximized. Moreover, the accelerator program can be a big distraction. High degree of commitment required by accelerators might rob the founders’ time that should be spent otherwise such as building product or hiring key staff. Startups should thoroughly go through these points to decide whether the accelerator program suits the company.
Graduation from accelerator is only the beginning. The fate of the startup depends on the capabilities fostered through the accelerator program. Unfortunately, there are a significant number of startups that fail to raise funds after demo day, with their valuation still set low. To survive and thrive, founders should endlessly strive for running the startup effectively and profitably, taking advantage of the connections when necessary. QuotaBook and QuotaSpace can help through this journey, supporting securities management and networking respectively. Schedule a demo anytime to discuss your needs and show you how we solve them!
Make equity simple with QuotaBook - QuotaBook is a global equity management platform with a mission to create an ecosystem for private companies and their investors and employees. Leaving spreadsheets and manual works behind, every stakeholder can connect online and sync crucial data on equity such as cap table or employee stock options. It is the leading platform used by top startups and VCs in Asia, backed by Y Combinator.
Disclaimer: This piece is written for information purposes only and is not intended as financial or legal advice. QuotaBook does not assume any reliability for dependence on the information provided above.