How to Apply Accelerator Programs
Startup growth isn’t always easy to achieve. Even with a great idea and a proven need for your product or service, it can still be difficult to boost sales and make a profit when you’re first starting out. Growth can and does plateau, too, leaving more established businesses wondering how to break that next barrier.
For some companies, the answer to overcoming these challenges is to seek the help of an accelerator — a highly selective, intensive program that offers the funding, mentorship, education and networking necessary to jump-start growth, typically in exchange for equity in the company. If you’re thinking about applying to an accelerator program, here’s what you need to know and some options to consider if you decide it’s the right path for you.
Accelerators versus incubators
You may have heard the terms “accelerator” and “incubator” used interchangeably, and it’s true that they are similar. Both are interested in helping startups and small companies achieve growth, and may even offer some of the same perks, like office space and a powerful network of mentors and advisers. However, businesses interested in these two options should be aware of some important differences between them.
Accelerators usually invest money in their selected participants in exchange for a share of equity. They work to speed up the business development process during a restricted period of time, typically three to four months. Incubators, on the other hand, are less structured, and are generally focused more on building viable ideas and business models. In a TechRepublic article on the subject, author Conner Forrest wrote, “If an accelerator is a greenhouse for young plants to get the optimal conditions to grow, an incubator matches quality seeds with the best soil for sprouting and growth.”
Who should apply to an accelerator program?
The startups best suited for accelerators are the ones that want to grow by learning and sharing experiences with others, said Mark Lawrence, co-founder and CEO of on-demand parking app SpotHero and a graduate of the Techstars Chicago accelerator program.
“You have to be willing to talk not only about your successes but your struggles,” Lawrence said. “You also need to have a solid idea for a product or service and understand where you want to take your company and what goals you want to achieve.”
The typical applicant is in the early stages of business development and has either just launched or is getting ready to do so. Many companies have a finished product or concept, and may have even raised capital; others may only have an idea and no funding whatsoever. These startups can benefit greatly from the resources and assistance an accelerator can provide, and the program mentors work with them to get their product ready for customers and investors.
But don’t think that you can’t participate in an accelerator if you’re beyond the “startup” phase. In fact, there are numerous programs designed specifically for companies that have overcome the initial hurdles of starting up and want to take their business to the next level. One such program is Interise, a nonprofit organization that accelerates small business and economic growth.
“Small businesses achieve first-stage growth by focusing on quality and direction,” said Jean Horstman, CEO of Interise. “Second-stage growth [is about] management and leadership. As a second-stage growth accelerator, we work with businesses that have hit a wall, and what worked before isn’t working now. In a peer learning group, [Interise participants] acquire the know-how and management techniques to achieve second-stage growth.”
What are the requirements for applying?
Each accelerator has its own set of requirements, and some are more selective than others — the most competitive ones have an acceptance rate of less than 5 percent. The application process usually includes a lengthy series of questions about your business idea, your market and competitors, the work you’ve done so far and potential challenges. Specific qualifications — such as a certain development stage, whether you’ve raised funding before and intellectual property agreements — vary greatly by program.
If an accelerator is interested in your company, you’ll be asked to come in for an interview. Chris Tsai, founder and CEO of preordering platform Celery, said that when his team was applying to the popular Y Combinator accelerator, conducting mock interviews with program alumni was immensely helpful.
“[Y Combinator holds] rapid-fire, short, intense interviews,” Tsai said. “We practiced, [and then] interviewed with four partners in a short period of time — about 10 to 15 minutes. We found out that day that we were accepted.”