Many people think a good business idea is enough to start and succeed. In reality, the failure rate is high, especially for small businesses. In 2021, about 20% of companies failed in the first year.
These rates increase over time: 50% of businesses fail within five years and 65% within ten years (US Bureau of Labor Statistics). Fortunately, founders receive support and resources from business or startup accelerators.
Founders can join by sending their applications. They can access industry experts to help them identify their business’ selling points if approved. Likewise, they can become mentors and help you pitch that startup idea to investors. This article provides a walkthrough of the nine benefits of participating in the right startup accelerator.
How To Select the Right Accelerator?
To choose a suitable startup accelerator, a founder should consider if they want help with seed or early-stage financing. Take note that other accelerators accept applications by sector; for instance, a startup focused on fintech would benefit from joining an accelerator with key mentors on financial services.
Another factor to consider when looking for the right startup accelerator is how well their education and expertise match your startup idea, product, or business model. Check out the lists of startups that received backing from an accelerator and learn how successful those businesses have become.
What Are the Perks of Startup Accelerators?
Businesses can gain so much from joining a startup accelerator. However, understanding what their companies need to grow is up to the founders. They can take this awareness to gain a solid grasp of startup accelerators’ role in actualizing this growth through the following perks:
1. Presents an opportunity to build a strong network
The startup accelerator is packed in attendance by top industry experts, founders, developers, and various key individuals in the startup ecosystem.
Startup founders who know how to make the most of this event come out of the accelerator program with an extensive network. The connections come in handy when you need business advice or seek investors.
2. Allows accessibility to angel investors and venture capitalists
These two have active roles when finding cohorts, offering mentorship, and joining the “demo day.” These encounters push founders to ramp up their pitching skills. Founders need to be prepared to talk about their financial data and convey their ability to use these funds to boost their operations and meet their projected revenue.
3. Supports maintaining momentum
Some businesses, particularly tech startups, start fast with iterations and feedback loops cycling regularly and pumping out improved product or service versions.
While this fits the ideal pace, it can take time to sustain momentum. Factors like friction within teams or developers can slow the pace. Startup accelerators can remedy this through partnerships, investments, or proof of concept.
4. Provides an opportunity to determine the risks
Founders can be too occupied with their pitches to find that some aspects pose a risk to their business. A startup accelerator creates the best space for spotting such risks and developing a plan to minimize them before they become too complex to solve.
5. Equips the team with the required skills
Often, a founding team will come forward with core expertise. While this level is sufficient for building a viable product, more is needed for running a business. Mentors, industry experts, and other accelerators can offer different ways of addressing this aspect.
They can support you in developing critical strategies (e.g., business plans) and hiring processes to fill in the right talent.
6. Creates an atmosphere of healthy competition
The startup accelerator is always teeming with startups similar to yours. You can’t help but compare how your startup performs to other startups. For some founders, this provides a good dose of competitive spirit and opens their eyes to aspects of their business that need tweaking or overhauling.
This motivation can carry on to help them ensure that they only deliver quality pitches or attend more meetings with investors.
7. Offers the chance to have a mentor
Years of experience in the industry give mentors plenty of knowledge to draw from. Participating founders can meet mentors or coaches and develop long-term relationships that can benefit the business through advice and foresight.
8. Provides the opportunity to practice pitches
Startup accelerators give founders a unique chance to meet and pitch their startup idea to mock investors who, in turn, provide valuable feedback. You can use this information to improve your narrative (e.g., add supporting facts) or the way you showcase your team or product.
9. Bridges the gap between startups and customers
Startup accelerators also include customers; founders can approach these individuals and discuss their needs in greater detail. This encounter grants founders plenty of opportunities to refine their customer profiles and tailor their products or services to customers’ specific needs.
Startup Accelerators: In a Nutshell
Developing a product and starting a business presents many challenges, causing several startups to fail. A startup accelerator can provide several advantages—networking opportunities, finding a mentor, or the chance to do mock pitches.
Some benefits go as far as helping founders spot risks, fill in skills, and sharpen consumer knowledge. Lastly, these accelerators give founders access to investors, healthy competition, and a means to sustain the right momentum to grow their businesses.
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