Accelerated Learning

Beware the Artificial Accelerator

With accelerators proliferates, how do you know which ones to trust?
 Beware the Artificial Accelerator

Paul Graham, YCombinator overlord. (flickr.com/jolieodell)

In the world of startup accelerators, TechStars and Y Combinator are arguably top dogs. Each receives thousands of eager applicants every year, and only accepts an elite percentage of companies into their inner circles. But of course, with the success of the TechStars/Y Combinator models comes a slew of copycat accelerators that may lack the credentials and experience to actually help their applicants.

According to the Wall Street Journal:

…As accelerators proliferate, critics question whether some of the programs—particularly newer ones outside tech hubs like Silicon Valley, Boston and New York—have enough access to the right mentors and investors to boost an entrepreneur’s chances of success.

Of course, that in no way means that programs other than Y Combinator or TechStars aren’t viable options for enterprising startuppers. The Journal elaborates on some ideal qualities to look for when considering a potential accelerator:

  • The program should boast “seasoned mentors” on its roster. Don’t pay to join a program run by people with little-to-no experience. You may as well go it alone and save that 10 percent stake for a more trustworthy investor.
  • A worthwhile accelerator won’t demand more than a 10 percent stake in your company. TechStars and Y Combinator, for example, each take a 6 percent equity stake.
  • The best programs will have healthy track records of graduating several successful companies, not just one or two acquisitions that only allow them to break even.
  • Programs in cities with easy access to talented entrepreneurs–like San Francisco, New York, Boulder and Chicago–are typically those with the highest rate of success.

Of course, even armed with this knowledge, startup vets are well-acquainted with disappointment. Adds the Journal: “Just 0.1% of firms that are less than five years old receive seed or early-stage funding from venture-capital firms, according to Kauffman Foundation researchers.”

Follow Jessica Roy on Twitter or via RSS. jroy@observer.com

Comments

  1. Reblogged this on marceloballona and commented:
    Add your thoughts here… (optional)Marcelo Ballona I agree to some points, but the World is not limited to the Silicon Valley, we all need to have this clear on our minds. Mayor Mike Bloomberg is doing a terrific job helping Accelerators to establish themselves in New York, Telefonica’s initiative with Wayra is doing all the heavy lifting and great execution in Europe and Latin America, so there is a lot of noise, but there is music too. Common sense shall set you free!