What is an Accelerator?
An accelerator, commonly known as a business accelerator, is a program designed to support the early stages of companies through mentorship, networking, and sometimes financial investment. These programs aim to help startups be agile and self-sufficient in a short period, often within three to six months.
During this time, startups undergo intense coaching, required meetings, and seminars from seasoned business leaders and investors. Typically, this will culminate in a “Demo Day” or graduation, where they pitch their products and businesses to an audience of potential investors. Accelerators often do not charge fees for their services as startups are enrolled via application, but they might require equity in the business.
What is an accelerator for startups?
Business accelerators for startups can be an invaluable investment for several reasons. First, accelerators can provide startups with the necessary resources, including mentorship, years’ worth of training, and access to funding. Second, these programs are designed to guide and validate the business models of startups. This can help avoid wasted time and effort for trial and error.
Lastly, accelerators can expand the startup’s network by giving them access to potential partners, customers, and investors. Being accepted into a reputable accelerator can also instantly boost a startup’s credibility and reputation.
Accelerator vs. Incubator
Both accelerators and incubators are known to scale up startups. Their main differences lie in the scope and purpose.
Accelerators are three-to-six-month-long programs designed for startups that already have a minimum viable product or a product that can attract early adopters. On the other hand, incubators typically cater to goal-setting-stage entrepreneurs who are building their ventures from the ground up. Incubator programs often last for over a year. While accelerators are focused on the rapid growth of a startup in a few months, incubators take a more laid-back approach by providing legal and business services, as well as conceptualizing products fit to the market and building operating plans.
Business Accelerator Examples
There are several accelerators around the globe, with over 200 within the United States. Each of them differs in focus, cost, and approach. Some are funded by tech investors and corporations while others are university-sponsored or government-funded.
Here are some of the notable accelerator programs and what they offer:
- Y Combinator – One of the most famous accelerators globally, YC is known for its intensive three-month program of mentorship and financial investment in early-stage startups. It has helped launch companies including Airbnb and Dropbox.
- Techstars – Running programs in major cities around the globe, Techstars offers programs helping startups scale quickly through membership, funding, and networking. It has a network of over 10,000 mentors, focusing on a variety of industries.
- 500 Global – Formerly known as 500 Startups, 500 Global offers accelerator programs through mentorship, investment, and access to a global network. It has invested in over 2,500 companies, including Talkdesk and Udemy.
- MassChallenge – A non-profit accelerator supporting startups with zero equity taken in exchange for the program. Operating globally, it has helped thousands of startups in different industries, from health tech to consumer products.