Finding the Right Program for You
Because the vast majority of the startups produced by accelerators are less than 3 years old, it’s hard to evaluate the effectiveness of each program. In 2011 Aziz Gilani, a director in the Houston VC firm DFJ Mercury, studied 29 North American accelerators on behalf of the Kauffman Fellows Program and discovered that only two—Y Combinator and TechStars—had produced any “meaningful exits” (defined as acquisition agreements or IPOs). In fact, 45 percent of the programs Gilani reviewed failed to create a single business deemed worthy of venture funding. In the end, he concluded, there is a clear “quality gap” among the options.
Using Gilani’s methodology, the website Tech Cocktail has since posted a list of the top 15 business accelerators in the United States. In 2012, in conjunction with Northwestern’s Kellogg School of Management, the site also released the 20-page report “A Guide to Choosing the Best Accelerator for Your Tech Startup.” The guide and the rankings are both available for free online.
For a closer look at the data on each accelerator program, check out the database at seed-DB.com. Created in 2009 by Jed Christiansen, now head of channel sales for emerging markets at Google, it tracks 174 accelerators worldwide and nearly 3,000 startups that emerged from them. Among the listings you will find figures for dollars in funding, dollars in exits, and jobs created by each company.
At the very least, most experts agree, you should look for an accelerator run by a proven leader, someone who has successfully raised money and launched a business. Study the mentor list, too. You want to be surrounded by people who understand the specific challenges that face your business. After all, what good is an accelerator if it can’t save you from making costly mistakes?
How to Ace the Application Process
1. Apply early. The more time the program administrators have to get to know you, the better off you will be, says David Tisch, former managing director of TechStars’ New York City office.
2. Keep hustling. The application process takes months to complete. Use that time to build your business and demonstrate what you can do.
3. Be flexible. The screeners will pepper you with questions during the interview. Be prepared to respond on the fly and to shift direction as the conversation changes course.
4. Make your point. “Think of two or three critical things you need to get out during the interview,” says Weebly CEO David Rusenko. “Make sure you hit those points.”
5. Be yourself. The screeners are less interested in the business plan than in the makeup of the founders. “We want to understand the source of their passion, what is driving them,” explains TechStars founder David Cohen. “We want to know how they work together, what the team dynamics are.”
6. Work the room. “A lot of people go into that interview and dismiss [Y Combinator’s] Jessica [Livingston],” says Rusenko. “She doesn’t necessarily talk a lot, but she is one of the most important people in the decision-making process.”
1. Pester the mentors. Bombarding them with emails “will hurt you more than it will help you,” the TechStars website cautions.
2. Drop by the office without an appointment. To quote the site once again: “This is not a good example of persistence on your part.”
Refining your business via an accelerator is like being on a roller coaster without a seat belt. But it can deliver huge advantages—especially in raising capital. Read the full-length feature for more on the exciting process.