Startup Accelerators Explained : How Startup Accelerators Work ?

Startup accelerators (also referred to as Seed accelerators) are becoming increasingly popular among entrepreneurs.

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Startup accelerators (also referred to as Seed Accelerators) are becoming increasingly popular among Startup Founders. Entrepreneurs can now quickly obtain the funds, resources, connections, and skills needed to make their business idea a success thanks to startup accelerators.

The key question for someone new in business however remains:

What is a startup accelerator?
How do they function?
What is the reason behind its soaring popularity?

Our Team at Jordensky have curated this article after extensive research to help you understand everything you need to know about a startup accelerator.

If you need to make a quick decision but are unsure whether a startup accelerator is a viable option, you can consult with our startup accountants. Our accountants will analyze the nature of your business and its requirements and advise you whether an accelerator is necessary or not.

What is a Startup Accelerator? And why are they becoming so Popular?

Startup accelerators, also known as seed accelerators, are a type of startup support programme that provides startups with funds, training, and mentorship to help them navigate the early stages of business growth. For a set period of time, the startups join accelerators alongside other companies of a similar nature.

These accelerators offer valuable assistance and guidance to startups at all stages of their business growth cycle. The primary focus is on businesses that are struggling to introduce a revenue stream into their business accounts at the outset.

Startup accelerators are mentorship-driven
These programs offer fixed terms for every startup
These accelerators are cohort-based, meaning that they take businesses providing similar services on board
These programs end up in a graduation

Application Process

Though many business owners may be interested in participating in these support programmes for the expertise and other benefits, the chances of acceptance are slim, with an acceptance rate of only 1-3%.

Accelerators can be found and applied for online. You don't have to be concerned about the process's requirements because you can always read and download the instructions posted on their websites. When you apply to the programme, you will be in contact with the management throughout the application process and will receive all relevant guidance from them. You may also require the assistance of your accountants in developing a basic business plan and financial forecasting.

Financial Support

Many startups and small businesses approach startup accelerators because they provide the funds needed to get their operations up and running. However, finance can usually be provided in exchange for equity or a percentage of the company's ownership.

Before accepting the funds, you should reconsider the percentage of the company you are willing to give up. This portion of your business may become more significant as it grows over time, and it may have an impact on future fundraising rounds as well.

Mentorship

Once the registration completes, the entrepreneur has to dedicate his attention entirely towards the implementation of the business idea and work out growth strategies for a specified period.

Typically, the accelerator will also provide you with the physical space needed to work on your business idea.

The free mentorship and learning opportunities provided by this support Programme are primarily responsible for its growing popularity.

Networking Opportunity

These accelerators provide invaluable opportunities for networking with other entrepreneurs and industry experts. You may come across many investors looking for investment opportunities.

If you want to pique the interest of investors in your company, talk to your accountants about how to present your company to investors, or find an accounting firm to help you prepare for the due diligence process.

These meetings can be excellent opportunities to build a strong network, which can be extremely valuable for your fundraising rounds and business growth at some point in your business journey.

Demo Day and Pitch Decks

Once the training and mentoring are completed, the accelerators will schedule a "demo day" for you, which will also mark the end of the programme. Owners of startups are then expected to present their pitch decks in front of hundreds of investors, business strategists, media partners, and other attendees.

Given that startups only have a few minutes to present their pitch decks, entrepreneurs typically include 15-20 slides that cover the most exciting aspects of the business idea. They can cover anything from future financial projections to business model differentiation and market opportunities.

Are accelerators suitable for you?

You will come across thousands of business success stories, the majority of which attribute their success to hard work, persistence, and consistency. Many startup founders and angel investors around the world have enjoyed multi-million dollar business exits without the assistance of startup accelerators and incubators.

It is entirely up to you whether or not to take this option. If you do decide to pursue an accelerator programme, you should keep the following factors in mind:

You will have no trouble receiving a small seed funding round.
You have no other personal obligations and can devote 100% of your time to your business idea.
For the next 3-6 months, you have nothing better to do.
You enjoy working in a highly competitive and thriving business environment and can work well under pressure.
You have no business knowledge.
You've never run or established a business before.
Your business team includes other founding members.

About Jordensky

At Jordensky, we are committed to providing an experience of the highest caliber while specializing in accounting, taxes, MIS, and CFO services for startups and expanding businesses.

When you work with Jordensky, you get a team of finance experts who take the finance work off your plate– ”so you can focus on your business.

Akash Bagrecha

Co-Founder of Jordensky

Startup Accelerators Explained : How Startup Accelerators Work ?

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