Startup accelerators - What are they ?
Startup accelerators are organizations that have connections to investors, ex-founders, business partnerships, and capital. They run fixed-term, cohort-based programs for the most promising startups.
The aim is to quickly equip companies with everything they need to scale. This includes providing seminars, investor pitches, and help fine-tuning the product and business model.
In exchange for a short (3-6 month) program and chunk of startup capital, accelerators often take a slice of equity, usually ranging from 5% to 10%. Others don’t take equity or may provide less initial capital.
The amount of capital or the intensity of the program is often seen as a differentiator between accelerator programs and incubators. Incubators are geared to help very early stage startups, often in an idea or testing phase; maybe getting their first few clients. Whereas an accelerator provides the resources to help that small startup grow into one which has proof-of-concept, market validation, and an understanding of what it should do next.
Which areas get the most funding?
It’ll come as no surprise that all 11 of the highest-growth verticals (by funding) are technology companies.
Between 2012 and 2017, robotics, blockchain and agtech each grew by over 1,000%. The next biggest three verticals were AI, fintech, and cybersecurity. This reflects the high-tech future we’re headed towards:
Top 10 Startup Accelerators Based On Successful Exits
**Data validated until 2019
1) Y Combinator
Number of investments: 1,834
Number of exits: 192
Location: Mountain View, California, USA
2) 500 Startups
Number of investments: 1,694
Number of exits: 162
Location: Mountain View, California, USA
3) Techstars
Number of investments: 1,557
Number of exits: 134
Location: Boulder, Colorado, USA
4) Plug and Play
Number of investments: 731
Number of exits: 47
Location: Sunnyvale, California, USA
5) MassChallenge
Number of investments: 1,387
Number of exits: 39
Location: Boston, Massachusetts, USA
6) SOSV
Number of investments: 1,152
Number of exits: 23
Location: Princeton, New Jersey, USA
7) Startupbootcamp
Number of investments: 424
Number of exits: 21
Location: London, UK
8) Internet Initiatives Development Fund (IIDF)
Number of investments: 335
Number of exits: 21
Location: Moscow, Russia
9) Wayra
Number of investments: 960
Number of exits: 18
Location: Slough, Buckinghamshire, UK
10) Start-Up Chile
Number of investments: 837
Number of exits: 16
Location: Santiago, Chile
Accelerators maybe aren’t as strict on whether your business has stood the test of time, but they will want proof that your idea is valid, your founders are capable, and your traction is quantifiable.