Should you launch your business with a startup accelerator?

It may be unusual to be thinking about launching a new startup in the current climate. But times of great change in our lifestyles and the way we work can also provide opportunities to do something different. Especially if you've always had an itch to launch your own startup.

But how you approach your startup journey could make a huge difference in the outcome. I've launched startups and new ventures in a variety of new ways through my career and accelerators can be a pretty good option depending on your circumstances. Most recently I was part of the global startup accelerator - Antler's first London cohort of startups, with that in mind I wanted to share some of my thoughts on this experience and accelerators in general.

What is an accelerator anyhow?

Basically an accelerator does what it says on the tin, it takes a group of people and their startups concepts and accelerates them to their next critical stage of development.

From Wikipedia: startup accelerators, are fixed-term, cohort-based programs, that include mentorship and educational components and culminate in a public pitch event or demo day.

These programmes have grown in popularity in recent years with perhaps the most famous and earliest being Y Combinator, followed by programmes like TechStars, Seedcamp, StartupBootcamp, Entrepreneur First and more recently Antler.

Many well known and wildly successful startups have been launched through these programmes, in fact too man to mention but some highlights include Stripe, ClassPass, Revolut, Transferwise and more. So the model seems to work. In face the entire concept revolves around these accelerators helping to harness the entrepreneurial drive of future founders, while eliminating some of the common barriers that can cause startups to stumble.

But despite these huge successes would this accelerator approach be the best option for you and your startup concept?

The benefits of startup accelerators

1) Structure

Launching any startup is a tough slog. Even if you come up with an idea that you're excited about, knowing where to start and keeping yourself motivated is a constant challenge. This is especially challenging when you're working in isolation or in your spare time. Being part of an accelerator gives you some clear structure. There's weekly deadlines, and typically a demo day at the end of the process. All of this help keep you motivated and moving towards you target.

2 ) Group support

For myself and many startup founders I've known over the years a startup can be a lonely business. You might be used to working in a team in a much larger organisation where you have peers around to offer support. Even a 2 person startup can't quite provide that same support network. But in an accelerator you have the other entrepreneurs in your group (cohort) to collaborate with and exchange ideas, concerns and practical tips with. This is so useful, be it helping you with figuring out an aspect of your service or just having someone to have a coffee/beer with when you need some down time. They might even become your cofounders.

Beyond that you actually have the network and support of the accelerator programme itself. This can lead to intros, critical advice and even support in hiring and growing your business.

3 ) A seal of approval

If you speak Tok anyone who's created their own startup and gone door to door to investors to seek funding, I'm sure they'll tell you it wasn't exactly an easy process. Being inducted into an accelerator gives you and your startup credibility. Not only will your accelerator typically arrange meetings with investors and VCs, but even if you do seek out these investors directly, you'll not be walking in as a complete unknown entity.

4) A bigger stage

With online content platforms it's very easy to get your message out there, but humans are still drawn to events (be they digital or physical). It's very challenging as a solo entrepreneur or a isolated startup to generate the kind of excitement and attendance that matches the typical accelerator demo day. This gives you as a startup founder an amazing stage to present your business with conviction and energy. Hopefully resulting in investors seeking you out. This builds on the previous point by give you and your startup extremely valuable credibility and a very powerful pathway to investor discussions.

This message amplification doesn't end at demo day. Beyond this your accelerator will provide a platform for you and your business to reach potential customers partners and investors which is extremely valuable when you're building up your own online following.

5) Friendship

I know, I know, you aren't really building your startup to make friends, but the intense process of going through a startup accelerator can really forge strong bonds of friendship between you and your peers. This will boost the support network effect mentioned above and open up some of the benefits or more traditional professional networks.

Why a startup accelerator may not be for you

So let me firstly start off by saying that I really enjoyed my personal accelerator experience and I'd gladly recommend it to anyone who's seriously thinking about launching their own startup. But like anything there are always some cons.

1) Mixed priorities

While your startup concept will be your top priority, clearly most startup accelerators will take a broader view. They have many startups to manage and help push forward and limited time to do so. Also, they have to think about the overall goals, brand and promotion of their own accelerator which has all of its own pressures to perform, raise funding and grow. In my experience this is manageable but it's something to be aware of.

2 ) Big slice of the pie

Many often criticise startup accelerators for taking a hefty slice of equity for not much investment. These tend to vary from accelerator to accelerator but often times the startup accelerator programme itself it is considered as part of the value that is offered in exchange for a chunk of your neophyte startup.

This also comes with pretty favourable terms for the accelerator and quite a lot of control over your more strategic decisions and investments.

I personally justified this to myself by considering some of the benefits mentioned above. It felt to me that the benefits of the structure and credibility balanced out the equity stake offered but that's something everyone needs to consider carefully.

3) Compressed timeframes

Startup accelerators are typically built around very tight deadlines. In my case the programme I was part of had an initial 2 month phase where you were expected to meet a cofounder, create an initial proof of concept of your startup and then pitch for funding. Beyond which a longer phase 2 would lead you up to demo day where you'd pitch to investors. That's a pretty tight timeframe especially if you don't already have a pre-existing startup concept you want to develop.

The tight timeframe was actually part of the appeal for me, but some entrepreneurs may wish to have a bit more flexibility. Perhaps bootstrapping their startup for a year or more first or taking more time to develop the initial concept. Again something to keep in mind.

4) Limited freedom of movement

Following on from timeframes, you will be subject to more limitations on your freedom of action as compared to launching a startup yourself. This is the flip side of the structure benefit above. Now to be clear I always felt very encouraged to be proactive and our days were our own to do mostly as we pleased but it's another point to consider.

5) Survival of the fittest

It's probably important at this stage to mention that the startup I launched and gained funding for as part of my participation in the Antler programme is currently being wound up. Unfortunately the impact of covid and the ensuing economic crisis on our fledgling b2b SaaS business was too strong and we had to make the tough call to shutter the business (I'll detail this more in another post).

Of course in this kind of circumstance there's not as much an accelerator can do for you, whereas if you're a going concern they can help you with contacts, investors and generally elevate your online presence.

Startup failure is still a taboo and I'm not sure quite the industry as a whole has reached the maturity to deal with this inevitable facet of startup life. But certainly being plugged into a network of other startups in your cohort is a strong benefit.

So, should you launch your business with a startup accelerator?

Well the easy answer is 'that depends' hopefully the points above will provide some guidance for those looking at making this decision. But I would add that if you're one of those people that's always had an itch to launch a startup but never quite found the time or the opportunity, I feel like a startup accelerator could be a really good option. Overall it provides you with the kinda of structure and deadlines to help you make progress fast and the friendships and contacts you make are really valuable.