Startup acceleration refers to an intensified developmental strategy followed by organizations to help grow startup companies. These are usually conducted via a startup accelerator that typically comprises several experts in running new companies (or pushing out startups) and investment, apart from having a good track record and good networks. The process is aimed at increasing the growth rate of a startup company by providing expert guidance over a compressed period covering all aspects, from ideation to business model generation and organizational structuring to funding.

Accelerators prefer to cater to specialization areas such as FinTech, FoodTech, manufacturing, and retail initiatives. Usually, an involvement of anywhere between 5-10% equity is the norm once the mentor-driven process that lasts about 12-18 months from initial money injection is complete. Unlike a business incubator, which focuses exclusively on organization acceleration, it also attracts the financial resources of the accelerator. The startup company is mostly paid to set up a legal entity and create a new organization. The number of company participants can range from three to forty. Although accelerators can last up to six months, most use three months. Hence, this paper provides a comprehensive guide into the subject of Startup Acceleration.

Understanding the Concept of Startup Acceleration

Startup acceleration is one of the many methodologies in the business realm that aim at helping early-stage companies nurture and thrive. Startup accelerators are a way for entrepreneurs to "fast-forward" their business idea into a market-feasible product, and with the help of mentors, advisors, and tons of resources. This all happens in "startup boot camp sessions," usually around 3 months, during which a small amount of money is invested into the startup, in return for a small stake in the business. How does this business work, what is the purpose of it, what are the key components of a startup accelerator, and is it a viable option for your startup? This guide will go through all of the business subsections, comparing different models, school services, operational support, office space, money, and purposes, as well as providers of startup acceleration.

If you are interested in the concept of startup acceleration or generally in accelerating the growth of your company, then this guide is the perfect place to start. For the purposes of reaching a common level of understanding, startup acceleration will be discussed in its definition, the purpose it serves, the standard components, the benefits, the possible cons and who might be suitable for startup acceleration. Furthermore, we will provide our view on the selection process to choose the best accelerator for your startup.

The Benefits of Startup Acceleration

If you are a new startup or are preparing to grow your business ideas, the support of a startup accelerator can bring a wealth of positive benefits. Accelerators turbocharge the growth of companies who are selected for their programs, providing expert advice, time and resource investment, and access to like-minded professionals. Let’s explore the benefits of startup acceleration in greater detail.

The superstar outcome of startup acceleration that we often see in the media is the rapid growth of successful associated companies. Accelerators can bring you direct investment, and they can also increase the potential of your organization to be VC backed. Here at Fastr, our portfolio companies show 5x+ the growth of their non-accelerator backed initial projections and are 17% more likely to gain further investment in the first year after their program - that is over six times more than non-accelerator backed cohorts. Grabbing the accelerator promotion should be the pinnacle moment of exiting the program and funneling back all of that knowledge directly into your operational objectives to create a successful business faster.

The "angel dust" of the corporations who liaise and invest in your startup acceleration program are the key to wider targeting and scaling up of impact investment. We wonder in afterthought if a corporation that subsidizes a lot of the initial stages of the accelerator might even be waiting to engage with your new concept if they are looking to diversify. We also know a few influencers with social profiles into the tens of billions. If you have an idea that can power the future, we will ensure those with the requisite skills, insight, and motivation are aware of the space you are operating in and can hands-on hope to provide a diversified sector of support.

Faster Growth and Scalability

Startup acceleration is used by innovative companies to encourage faster business development. Techniques such as competitive strategies, reduced execution time, and quick-life cycle product design have been more generally investigated, with startup acceleration research being notably absent. Modern startups, on the other hand, have established a variety of tactics to accomplish this, such as increased product creativity and resource utilization, as well as quicker organizational growth. The need for accelerated growth of startups in order to survive competition under such circumstances has gained more attention in the popular media and among practitioners.

An increasing number of innovative companies recognize the conveniences of rapid growth. The United Nations' secretary-general, Suo, noted in the 2007 Global Implementation Survey that the fastest-growing firms expand at a rate of 16.4 percent per year, whereas the slowest-growing businesses expand at a rate of 2.5 percent. Technology and innovation-based startups have unique advantages that accelerate enterprise conceptualization, growth, and globalization, resulting in higher growth potential. Startups offer many benefits to a wide range of participants, including, for example, the general public, workers, students, and strategic partners in politics, finance, and technology. One of the set of advantages is the opportunity for startups to achieve faster growth and scalability. In recent years, mobile advances have allowed not just ventures to be founded more rapidly, but also faster company building. Startup acceleration, achieved by an accelerator organization, can aid in the scaling of those startups.

Key Components of Effective Acceleration Programs

Regardless of the type of accelerator, the most effective accelerators tend to have a number of important components. Primarily, they offer businesses mentorship and networking opportunities with other successful business people, potential investors, and/or customers. These business people also bring a level of expertise that an employee on staff or the accelerator managers can't provide. Entrepreneurs bring hands-on experience, as they're still in the saddle, unlike the many speakers and professors who've never run a startup. Expert-Peer network CEOs are, in essence, free consultants. Investments from accelerators (financial and nonfinancial) help not only financially, but also signal to others—such as suppliers, partners, and employees—that someone else with expertise believes in the startup. They are also a stamp of approval where one may not exist with startups.

While simply throwing money at new companies is not enough to launch them into success, seed funding is crucial. Acceleration programs, like incubators and venture capitalists, understand this and offer entrepreneurs startup fund backing. Mitigating early financial stress through a financial offer allows entrepreneurs peace of mind, which in turn lets them turn their focus to other important things like testing products, carrying out a beta launch, building a solid public image, and more. An important component of an acceleration program to look for are mentors. Mentorship can prove to be much more valuable than several thousands of dollars in startup funds. Going through an acceleration program gives entrepreneurs access to a variety of mentorship. Because mentors in an acceleration program tend to be reputable businesspeople, some businesses received their clients, partners, and angel investors through introductions.

Mentorship and Networking Opportunities

Mentorship One of the attractions of joining an acceleration program is the different perks that come with the package. Connecting with a network of mentors, advisors, and the organizer team can be the best form of support for you or your startup. However, not all who claim to represent experts and professionals are what they say they are. This special connection offers you a private opportunity to make strategic contacts and receive exclusive advice, support, and information. It is a great opportunity to learn from practitioners who have already gone through what you are going through and have enough experience behind you to guide or help you out. It is essential for them to be specialized in business marketing and strategy, including sales, growth, operations, and scaling. They may be able to help you with valuable business introductions, recommendations, advice, and/or market insight, potential partnerships, and even investment. They could also be angel investors themselves.

Networking Opportunities One of the highlights of an acceleration program is the opportunity to rub shoulders with amazing startups, industry partners, researchers, and potential investors. It also provides opportunities to join or connect with a support network that can help startups grow when curated so that the introductions and interactions are useful. Visibility is key for startups, and it is mostly wary of overselling and being seen as less competitive by a rival. The other startups have also had to undergo a selection process, so the caliber of potential contact is high. Accelerators try to bring to the table investors, potential partners, and connectors in order to help bolster their startups' worth. Networking relationships can also significantly assist research and development, market research, product development, validation, and traction or growth.

Choosing the Right Accelerator for Your Startup

As a founder, your biggest concern when looking for the right accelerator should be figuring out what you want or need. Are you in search of funding, networking, mentoring, guidance, or anything else at all? Does your accelerator have to work in a specific industry? If you're hoping to engage in biotechnology, game design plus development, or renewable energy technology, then that's the highest priority on your checklist. Top-tier seed accelerators like Y Combinator or Techstars, which is just as acclaimed, only accept between 1% and 5% of applicants. If you have specific interests or heavily specialized niche, understand that the options become about as rare as a unicorn.

The biggest and most renowned accelerators back as well as bankroll you, sprinkle mentors like confetti, and invite you to mature-fit networking events – among other benefits. However, these cherished spots come complete with a number of major caveats, like the obligation to provide equity in your company, a huge time sink, and a design, product, or service less likely to realize ROI in time for the next admission batch. But, the real question here is this: what do you need? Only you can answer that, of course. You obviously crave successful mentorship, the kind where your mentors actually have the time to spend a billable hour or more offering your company their mentorship. In this case, programs like the accelerators from 500 Startups or MogulX could be the right path for you. A helpful tip is to identify active investors in your area, who are well known for advising fast-growing startups. They also tend to run or at least recognize any stand-out programs in their hometowns.

Factors to Consider

Now that you have a better idea of what an accelerator entails and the benefits it can provide, the next step in the journey is to consider the specific factors that should come into play when considering such a decision for your startup. After all, there are many options out there to choose from, and you'll want to make sure that you make a decision that works best for you and your unique situation. Here's your brief guide to help motivating factors to consider when it comes to joining an accelerator program.

There are four main motivators that startups must balance when considering which program to apply to. Each of the following are a spectrum. What is important to you will depend heavily on your maturity as a startup, your business vertical, your stage, and your expectations. While we recognize that entrepreneurs are passionate about the problem that they are solving, we strongly believe that nonprofits are a valid business model and that raising money is a passé way of validating a business, especially for an acceleration program. As a smaller community, Brazil is also seeing a trend in startup loyalty to those funds that supported them first, and preference by new startups to those who have success stories out of their program. We believe this is a valuable metric, but not the only important metric to consider. For the purpose of navigating this section, we recommend starting with "My goals are..." or "We prioritize this metric the most." If you are unsure, you may still have a preference, you may just need to sit down and weigh the factors against each other.

Success Stories: Real-World Examples of Accelerated Startups

The proof is in the pudding. Reading about concepts and strategies is all well and good, but there's nothing quite like a good success story to help potential accelerator participants understand the real-world outcomes they might expect. Though not exhaustive, here's a collection of impressive successes that have been seen in the accelerator space. Caveat: If you've caught the accelerator bug, don't expect that the same success will automatically come to you. None of these companies were guaranteed success just because they enrolled in an accelerator program. However, they were able to leverage that infrastructure to propel them forward.

1. Combinator-fueled Dropbox now raked in $125 million in funding by their 29th demo day. As of the last time their data was updated in Sep 2020, they were looking at a $9.3 billion valuation.
2. Combinator grad Airbnb started as just two guys living in a single-family home. They gained acceptance into Combinator and bounced through a series of short-term rental businesses before ultimately landing on what was to be the behemoth known as Airbnb. They now boast a billion-dollar valuation and have raised around $3.4 billion in venture caps as of the time of writing.
3. (Combinator graduates dominate accelerator success stories.) Others who have taken that golden ticket through the accelerator halls towards success include Dropbox, Weebly, Reddit, along with more recent phenomenons like DoorDash and Coinbase.
4. In 2007, Michael Seibel, a Yale University political science major, co-founded Justin.tv, a company that was to become Twitch Interactive Inc., the live-streaming company later acquired by Amazon in 2014 for around $1 billion.
5. TechStars Darrell Cavens. Sendgrid Inc. was founded in 2009 and went public under the NASDAQ ticker SEND publicly in 2017, retaining a market cap of $825 million.

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