I recently went through a very well-known accelerator (one of the top three) and frequently get asked questions about the experience, requirements, result, etc. Mostly, I provide watered-down answers.
I’ve been inspired to change my ways and be more candid. Aside from naming names or throwing anyone under the bus, I’m willing to provide unfiltered answers to any questions you have.
What do you want to know?
Startups that go through accelerators that fail tend to get aquihired. Do the founders make bank when that happens?
Does that mean that you "cannot fail" as long as you get into an accelerator?
Referring to top accelerators obviously.
<p>OP here: That's an interesting observation. I wonder if anyone has the numbers on how many get acquihired after going through one vs. not.</p>
<p>For me, the BEST thing, hands down, is the network. Not the investor network, the other companies. It's almost fraternal. They'll be quick to hire you if you need to get back on your feet and they'll also acquihire you if need be.</p>
<p>I don't know if what you're saying is true or not, but if it is, this is probably why.</p>
<p>Also, usually this isn't about making bank, it's usually about saving face and paying off investors with equity in another co.</p>
<p>Been through one acquihire and only got equity, no cash. That equity hasn't done shit for me yet.</p>
I'm on the investment team of a top startup accelerator.
No the entrepreneurs do not 'make bank' when acquihired from a 'failing' startup.
Just as the person above said, they'll get equity which will take time to 'bank' due to vesting.
I'm talking from a very-recent experience.
That depends on where you draw the line at "top" accelerator. I went through one, learned a lot, made friends, got prepared, got some cash from their investment, then thud. Nothing.
Regarding the businesses that were in your "class" were there any factors that were common i.e. did all have some seed funding, traction, repeat entrepreneurs etc?
Was it worth it? How much did you give up, % wise?
<p>It was a total mixed bag of companies and at different stages. One commonality amongst all of us was that we were aimed at enterprise.</p>
<p>Was it worth it? Yes, but not for the reasons you would assume. I thought we'd be able to write our own ticket after the program. That wasn't the case. Far from it. There are so many companies coming out of accelerators now that it feels like the allure is going away for investors. It was worth it because of the founder network.</p>
<p>How much did you give up? 7%. It was wise for where we were at and what we were looking to get from it.</p>
How much help can an accelerator possible provide in 3 months of free mentorship, office space and only giving up as little as $25k-$100k while snapping up 6-10% equity?
Surely that system is only suitable to young people who can live on noodles 24-7 and barely pay themselves?
I need a salary, I need it now. I have myself and a family to support... but yet that doesn't mean that I'm not going to work harder or smarter than a young kid who can live on ZERO budget.
I'll need to get a full-time job to earn money and work on the start-up on the side before I'm in any position to go through an accelerator process. I can't waste 3 more months of no income. It seems the accelerator process misses out on so many opportunities because of this.
<p>OP here.</p>
<p>Before I address your question, let me state that I'm over 30 years old and have kids. Further, I don't live in Boulder, San Francisco or New York.</p>
<p>We had money going into the program to help with all expenses, including salary. Could not have done it otherwise. I totally feel you on addressing your immediate needs.</p>
<p>Depending on what program you're going into, you should be able to manage eeking out a salary of some kind. It won't be immediately, but you can catch up once you get the check.</p>
<p>Don't look at it as a dollar to equity ratio. Fuck the mentoring, office space and investment. It's not about any of that. It's about fast lane access, it's about signaling, credibility and network expansion. You're paying 5 - 8% for de-risking you and your company.</p>
<p>Accelerators are like college. If you can't get into the ivy league schools, it's not worth it. Unless you need specialization, such as Edtech, etc.</p>
<p>Here's my advice: Apply to the ivy leagues and if you get in, use it as leverage to get a quick $100k note to carry you until you finish.</p>
When you refer to top 3 or Ivy League, which specifically are you talking about?
<p>The gold ones. http://techcrunch.com/2014/03/10/these-are-the-15-best-accelerators-in-the-u-s/</p>
Since you mentioned that the mentorship isn't that great but the network. Are there any type of startups you feel that wouldn't (and didn't among your cohort) benefit from an Accelerator?
<p>OP: There is a good chance that the company you come in as will look a lot different than the company you come out as. Doesn't really matter what your startup does, as long as you have enough to impress the MD's. That could be in the form of traction, team, brilliance, past success, etc.</p>
<p>We had a company in our class that completely started over one month before demo day. They ended up raising the most of any of us. Go figure.</p>