Summer in the startup world has, over the last few years, become “accelerator season.” There are now hundreds of programs (some you’ve heard of, most you haven’t) that compete to get the most promising embryonic companies and incubate them through the earliest stages of growth and development.
If you are or will be in an accelerator program, here are five tips for how to get as much as possible out of your experience.
1. Help the other companies
The greatest benefit of being in an accelerator is working alongside a group of other talented entrepreneurs that all have different backgrounds, skills, and insights. They will be your first beta testers, closest friends, and biggest supporters. They can help with advice and feedback, problem solving, introductions to their network, and references. But only if they like you. So do all those good things for them. Don’t be a jerk and don’t be over-competitive.
The beautiful thing about business is that (unlike Hollywood or the government) it’s built primarily on win-win situations. You can help others without hurting yourself. The more everyone helps each other, the bigger the pie gets for everybody. Some of the best introductions to investors for my company’s seed round came from other entrepreneurs that I went through an accelerator with.
2. Work closely with the founders
With the dropping cost of starting a business, we are seeing a new stage of company that has never existed before. This “pre-seed” stage has different needs in every aspect. It exists in a rapidly changing investment climate. There is only one group of people that focus exclusively on these types of companies, and have seen the patterns associated with them: the founders and managers of accelerator programs. They understand your company and how it fits into the startup world much better than any other investor or advisor. Also, you can bet that when your seed investors are debating whether or not to give you their money, the first call they’re going to make is to whomever just spent four months with you and watched you overcome every obstacle you’ve encountered so far.
3. Don’t depend on Demo Day
If there is one pervasive (and possibly harmful) misunderstanding in the accelerator world, it’s the power of Demo Day. Every program advertises the “hundreds of investors” that will be gathered to watch the startup pitches. Entrepreneurs get a vision in their head of a room full of rich angels with cash spilling out of their pockets, all lined up to write six-figure checks to whomever has the best pitch.
Lose that idea quickly. Demo day isn’t going to be a land grab competition in your favor. What it is is a great chance to meet a large number of potential investors in one day, but it should only be a small part of your fundraising strategy. What does that mean? It means you need to start fundraising well before demo day, or be treating demo day as simply the start of a long process.
Most accelerators give between $15-$50,000, and only a few offer additional financing options to their companies. That means, unless you’re instantly profitable, that you’re going to need to have some new cash in your bank account pretty quickly. The best possible situation would be to have commitments before demo day for more than half of your seed round, and then tell the room that there’s only so much room left in the round and create a little scarcity to get them searching for their checkbook. If you can’t get any large commitments, try to do a friends and family round so you have a little cushion to sustain you during the fundraising process.
4. Leverage the mentor list
One of the most difficult tasks for every startup is finding your first real customers. So what could possibly be more valuable than a long list of very successful men and women in your industry who have agreed (and in many cases requested) to be available to help your company with advice and introductions? Consider all these people as very warm and very high-priority sales leads.
Remember, though, that every mentor on your list has a lot of people vying for their time. Treat them with respect and don’t abuse them. You only get one shot to make a good impression; they likely don’t have time for second chances.
5. Work like mad
My last advice is to think of an accelerator like bootcamp. Whether your program is two months or four months, it’s too short. Never again will you have constant access to the same energy, support, encouragement, resources, and (maybe most importantly) forgiveness as you do during an accelerator program. You need to get as far as you can with your company so that you can effectively leverage all those benefits for as many different “development stages” as you can. If you can get to product launch during the accelerator, you will have more help for it than you otherwise would. Same goes for any other milestone.
Demo day will come much faster than you were expecting, and then you get tossed out to the wolves in the real world, who are going to treat you like a real business and compare your products side-by-side with Google’s. If you’ve put in the hours (and after-hours) during the accelerator, you’ll be ready for the fight.
OK, last tip: have fun!