Accelerator. On the one hand, today this is a fairly well-known and popular term among participants in the investment market, especially entrepreneurs. On the other hand, it turns out that a decent number of funders, especially beginners, do not target most of the issues that they simply must know about these organizations.
We decided to fix this situation by providing a debriefing. Here's what happened:
What are accelerators?
How do they work?
An Accelerator is a social institution that helps to grow and develop young companies. The participating companies are usually referred to as the residents of the accelerator. Each accelerator has its own orderly program, which, as a rule, lasts from 3 to 6 months. As part of such a program, a young company has the opportunity to find, test or improve on its business model, test the product, find their first customers, significantly expand their network and deal with a number of other important issues at their current stage of development. In addition, accelerators, as a rule, provide a location (office or coworking), where their residents can be accommodated during the course of the program.
One of the main problems that beginners face when starting a startup is a lack of experience in the investment market. Sometimes, the team has a well-developed idea, but not enough resources to create a product and test it among potential customers. Sometimes there’s already a finished product, but there’s not enough knowledge and experience to bring it to the market and start selling.
In other words, the Accelerator helps an entrepreneur perform qualitative preparation of an investment project at different stages of development and to achieve the set goals.
The pioneer among the world's accelerators is YCombinator, which was founded by well-known investor and entrepreneur Paul Graham and his partners back in 2005.
Then their company offered projects in the early stages of development for a minimum seed investment and an accelerated program lasting 3 months.
Two years later (in 2007), the first business accelerator also appeared in Europe. It was London-based company Seedcamp, founded by a group of 30 European investors.
Everything depends on what stage of development the project is in.
If you have only an idea or, at most, a prototype, the Accelerator can provide a minimum amount of investment so that you, first of all, tested the potential of your team and created or finalized the prototype. Of course, you will not get much, but this amount will be enough to understand where to move on and in general, whether to continue.
If the previous paragraph is all positive, then the Accelerator can help you tighten seed-investments and provide good PR for the team.
"The very fact that you’re in a good accelerator will be an information guide. This will offer a decent amount of publications and links with journalists, "- says founder and CEO of Preply.com Cyril Bigai in an interview for rb.ru.
Well, of course, you will get a cool network with investors, mentors and colleagues.
If your project is in a later stage of development - for example, it becomes self-supporting or actively grows, then the main thing that you should understand is that you only need to join the top accelerators (let's talk about this in the following paragraphs).
These structures can help you enter new markets, increase the capitalization of the company, prepare for the next round of financing and find investors.
In addition, they usually take on the costs of relocation - that is, if necessary, pay for the relocation and residence of the team in another country for the period of acceleration. Traditionally, the set includes mentors, network and PR.
The classical business model for most accelerators is that they take a share in the startup, with the right to sell it later.
For instance, Accelerator A received a 10% stake in company B for providing accelerating services. In 5 years, this company was bought by IBM for $20 million. Accordingly, accelerator A receives $2 million from the transaction amount.
But there are also accelerators, for which you can pay for services not in the company, but in cash. One such structures is the Russian accelerator of the FRI.
The best "friends" of accelerators, in terms of supporting startups are venture funds. Often these two structures work in tandem: the accelerator provides infrastructure, an educational program, etc., a venture fund is an investment.
So, it's time to figure out which of the world's accelerators are the most generous and where they are located. Official statistics for 2016 are coming soon, but the results of 2015 more than enough.
Let's start with the question of which regions in 2015 the accelerators have invested in the most. In first place (who would have doubted) is the United States, coming in the second - Europe, and the third place - Latin America.
The rating of leaders on the volumes of seed investment in the world looks so ....
In Europe like this:
The presently popular incarnate of accelerators is corporate. What does it mean? Former startups, and now well-known global corporations such as Microsoft, Intel, Google with the goal of searching, developing and implementing innovative products or technologies in their companies, create these corporate accelerators.
They provide young colleagues with the infrastructure for developing projects, investments, technologies, and sometimes even a client base.
At the end of the program, teams with high achievements, in the majority of cases, begin to work with the hosting corporations.
Date of publication: 09.06.2017