Failory - A Guide to Startup Accelerators

Hey — It's Nico.

This is issue #3 of April's 4-email series about Startup Fundraising. This week I published a guide to Startup Accelerators.

🙌 Welcome to the 590 founders who joined this week.

This issue is brought to you by Around:

I recently downloaded Around, looking for ways to improve my Zoom's calls with other startup founders.

I'm sticking to Around for two reasons: 1) it frees up my screen, which allows me to easily read and take notes as I have the call; 2) my background image and noise are always messy and Around helps me avoid founders from noticing this.

What is a startup accelerator? Startup accelerators are cohort programs for startup founders that offer mentorship, venture capital, and connections to potential investors and/or business partners.

These programs are designed to support early-stage startups that already have a minimum value product (MVP) to help them rapidly grow and scale.

How long do accelerators last? A typical startup accelerator program lasts from 3-6 months. During this time, startup founders are often relocated to the program’s base, which may be in Silicon Valley or another global tech hub.

How much do accelerators invest? The amount of venture capital your startup can receive from an accelerator ranges from about $20,000-$150,000. In exchange, they generally take some equity in your company, which is usually around 5-7%.

What are the benefits of joining an accelerator? In the guide, we go deep into each of the following benefits:

1. Networking opportunities (like-minded investors, program alumni, mentors, and other founders).
2. Personalized guidance and mentoring (generally from experienced founders and investors).
3. Opportunities for collaboration and partnerships with other startups from your same batch.
4. Initial venture capital (not a big amount, but at least what's necessary to take the startup to the seed round).
5. Increased chances to raise seed funding (50% more chances than non-accelerated companies).

Who are accelerators looking for? Each accelerator is different, but in general, they want companies that:

• Have a high growth potential.
• Have a working MVP.

If you only have an idea or prototype, an incubator might be a better path.

Which are the top accelerators? There are 200+ in the US and many thousands worldwide. Here are just some of the top ones:

1. Y Combinator
2. TechStars
3. 500 Startups
4. MassChallenge
5. Alchemist Accelerator
6. NFX
7. Startupbootcamp
8. AngelPad

​In the article, you can find information about each accelerator's location, preferred industries, investment and equity amounts, etc.

Besides that, at the top of the article, you can find a form to download a curated list of 2,600+ accelerators and incubators.

Should you join an accelerator? Ask yourself why you want to join:

• If all you’re after is venture capital, it may be better for you to pursue other funding options.
• If what you’re really after is mentorship and access to resources and connections, an accelerator program may be the way-to-go.

If you think joining an accelerator is a good idea for your startup, make sure to read the whole guide we wrote. Here's the link.​

If you enjoyed this week's content, you may find interesting the first two issues of this Startup Fundraising series:

• Issue #1: Pre-Seed Funding​
• Issue #2: Facebook & Uber's pitch decks

Besides the articles, here are my 3 recommended resources of the week:

• ​The Marketplace 100 (2022): This week, a16z published their yearly ranking of the largest consumer-facing marketplace startups. Lots of interesting insights on the hottest markets and trends.
• ​SaaS Marketing Budget: Most SaaS don't know how marketing expenses relate to revenue growth and pull their marketing budget numbers from thin air. In this article, Corey Haines shares two methods to easily create such a budget.
• ​11 Lessons by Dharmesh Shah: 13 years, $3M+ invested, and 80+ investments later, Dharmesh Shah compiled the 11 most important investment lessons.

I hope you enjoyed this week's newsletter! Let me know if there's anything I can help you with ;)

Cheers,

Nico