Wednesday, November 2, 2011

HOW (AND WHY) TO PICK AN ACCELERATOR

NEGATIVES (why you shouldn’t join an accelerator)

Accelerator-hopping
- Perpetual grad student
Puts off risk & real decisions
- Training wheels
- When do you kick the baby out of the nest?
- Does this kind of support attract the best entrepreneurs?
- Miss opportunity to build character, as Aerosmith did on their first, D-I-Y tours.
Overexposure

3 CATEGORIES OF 'ACCELERATOR'
Founders: These organizations start new companies in-house, from technology or ideas.
Examples:
- Idealab
- Universities
- Venture firms - Flagship Ventures, Kepha Partners, Highland (Entrepreneur Center)
Investors: Structured like venture funds, they take equity in participant companies
Examples:
- Techstars
- Y Combinator
- Vermont Center for Entrepreneurship
Vendors: Provide services in exchange for fees, or use other revenue models (corporate / government / nonprofit sponsorship or affiliation)
Examples:
- Cambridge Innovation Center
- MassChallenge
- DogPatch Labs
- Summer@Highland

SERVICES
Program focus:
- Time to market
- Funding
- Customer acquisition (B2B/B2C)
- Bootstrapping
Modes of delivery:
Peer-to-peer
- Established companies inside an accelerator are an 'engine' to pull new companies
- Ad hoc social conversations
- Participation: You can’t sit in a corner and code
- Can an accelerator attract quality peers? If they have attractive terms, yes.
Referral
- Platform for access to industry advisors, mentors
- Speakers
- In Techstars, mentors provide 80 percent of the value - per one participant
Competition
- Business Plan Competitions
- 3 to 4 days
- emphasis on presentations
- 7 out of 10 participants are 'real businesses'
- 'Act of preparing' for competition is helpful
MassChallenge
- Connections
- Lean Startup Challenge
- Competition prize serves as a ‘rallying point’ for team - more than a motivator for individuals
-  Deadlines
- Peer pressure
Any program for which entrance is competitive (Techstars, Dogpatch): Can it motivate entrepreneurs through the application process alone?


STAGES OF COMPANY BUILDING: Different programs work at different stages, and some are complementary to, or feeder programs for others.

Idea stage
- Summer@Highland (some momentum behind the business - product dev, team, advisors)
- Universities: Launching entrepreneurship programs to prevent student attrition to startups.
- MIT MediaLab / e-Center
- Harvard Innovation Lab
Established company, with 'some' funding: This is where equity-based accelerators like TechStars typically fit in. DogPatch also plays in this area.
- DogPatch: 70 percent 'established'; 30 % are 'two guys, a keyboard and a goat.'

RESEARCH
Northeastern University survey for entrepreneurs, studying the impact of accelerators: http://bit.ly/helpafounderout

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