I started this blog as a blog for music but since then it basically became a blog where I write about entrepreneurship and things related to the company I co-founded. But I want the things to connect somehow so I decided that from now on I'll add a soundtrack to the posts I write so that people can enjoy the music I love while reading. The soundtrack for today will be 2 songs of Pearl Jam which I recently saw live 2 nights in a row :).
We just crossed the mid-line in the accelerator program we're part of – IDC Elevator. I talked with a lot of people lately that asked me why should I go into an accelerator program. I'll try to answer some of the questions people ask me and some of the attitudes people come with, and answer them from my experience so far.
"Should I give up equity just for space?"
This means you don't understand what an accelerator can give you. Accelerator is much more than space. To keep this post short I won't count all the benefits other than space. For that you can probably use the accelerator's website and talk with graduates. I'll just say that I strongly believe that it will get your company funded much faster and more importantly (remember that funding is never your goal), it will get you to the market with your product much faster.
Another small thing about the space. This is not just a regular space. It's a space full with brilliant people that can help your startup at any stage.
"I don't need an accelerator because I know everything"
This is the I know everything approach. With this approach, you're right. You don't need an accelerator. Accelerator is a place where you need to come to open minded and learn from other people's experiences and failures. If you don't want to learn then this is not the place for you. You know what, entrepreneurship is not for you.
"I can raise money by myself"
I bet you can. The only problem is that most of the times funding is a long process and through that process one of the team members should be fully dedicated to raising money. In case you didn't get that, one of your team members, won't do almost anything other than dealing with the funding process. And think about it. You're starting a startup. Your team is probably 2-4 people. Can you allow yourself to lose 25%-50% of your work force? When you're in an accelerator money comes to you. And if you're good you'll get enough money to get you rolling. Always remember that when you're part of an accelerator your potential investors due diligence is almost done.
"I can reach any mentor I wish"
Like the money part, I bet you can. But how much time will it get you to reach the right people? When you're in an accelerator the right people come to you. It's just up to you to pick a few that can really help your business and maintain the relationship. Another thing to consider when you're sure you can reach everyone. These mentors are usually successful people and their time for help is very limited. Put yourself in their shoes. When they get a request for help from an accelerator, where they can help a few companies in almost the same time, or from you, who do you think they'll choose?
"My company is too far along"
If you raised $10M in a $100M evaluation you're probably right. But if you're an early/seed stage company or if you just have a prototype, an accelerator program can really help you get to the market fast. There's a huge difference between 2 guys working from home in their boxers (each one in his house, not together :)) to 2 guys working in a space with a lot of other great companies. In a space where experts come and go at a rate that you can't even track. And the most important thing in my opinion is that it makes your company real. Other people, usually really strong people, have an interest in your company. You have a network of people who know a thing or two about the entrepreneurial world that will do anything for your company to succeed. And believe me, this is a lot.
What's the bottom line then? I guess I'm biased but I'm in favour of entering such programs but I recommend to pick the suitable program for your company carefully. Not all the programs out there are equal and not all of them will get you accelerated. If you decided to go for an accelerator program (and get accepted) I suggest you read this great post from Tal Raviv.
And another suggestion is to hear a different opinion so go read this post.
I'll love to hear your thoughts so feel free to comment. Thanks for reading.