Starting a business is challenging, and growing it can be even harder — but entrepreneurs don’t have to navigate the early stages of their startup alone. If your business has moved past its infancy and you’re seeking further guidance, a business accelerator could be just what you need.
Here’s how business accelerators can help get your business started on the right foot, and how to determine whether applying to one is the right path for you.
What is a business accelerator?
Business accelerators provide startups with the proper resources and support to jumpstart their growth. Some such resources include access to expert mentors, funding and investors, peer mentorship, workspaces, and technology for marketing. You can gain access to business accelerators through an application process.
Once your application is accepted, you will become part of a cohort of businesses with certain commonalities such as product type or target market. Business accelerator programs typically last anywhere from three to six months and end with a Demo Day, where each startup owner will receive the opportunity to present their business to investors, media, and potential customers.
[Read more: 10 Tech Tools to Scale Your Business]
Business accelerator vs. business incubator
Another choice for startups is the business incubator, which helps business founders refine their ideas and build their companies from scratch. Business incubators are organizations that assist with management training, provide office spaces, and offer venture capital funding to new startups.
While they offer similar services, business accelerators are not the same as business incubators.
Some key characteristics of a business accelerator include:
- Fixed duration.
- Growth-based.
- Seminar-based education.
- Intense mentorship model.
- Competitive and cyclical selection process.
- Company provides accelerator’s investors with equity.
- Uses set cohorts of businesses.
- May help with assembling a board of directors.
A business incubator, on the other hand, is more aligned with these characteristics:
- Open-ended duration.
- Fee-based and does not take equity.
- Minimal but tactical mentorship model.
- Educates when necessary.
- Noncompetitive selection process.
- May enter and exit on a rolling basis.
- Done at the very early stages of business development.
- Support with material assistance, like workspaces, enabling technology, and applications.
- May connect businesses with venture capitalists or angel investors.
[Read more: 3 Scaling Startups Each Share Their Playbook for B2B Growth]
When choosing an accelerator, ask yourself: Do the entrepreneurs in the accelerator have experience and connections that will benefit your business?
Is your business ready for an accelerator?
If the following statements sound like your startup, you and your team may be ready for a business accelerator.
You’re seeking access to networks and mentors
Accelerator programs provide opportunities to connect with various networks and mentors to guide business owners through their startup phase. When choosing an accelerator, ask yourself: Do the entrepreneurs in the accelerator have experience and connections that will benefit your business? Connecting with the right entrepreneurs can lead to more traction and can raise your business’s capital.
Your timing is right
The best time for a business to apply for an accelerator is when you’ve obtained your first customers and have gained some momentum. Accelerators are ideal for business owners who have strategies and plans in place but are still in search of investors and want to further their company’s growth.
Additionally, before applying to an accelerator, ask yourself whether you have the time to commit to the accelerator and whether its programming is well-suited to your business. If you get into an accelerator program, you’ll be spending at least 5-15 hours a week meeting with people and completing preset milestones.
You’re looking to scale your business
Businesses can scale quickly with accelerator programs, but there must be market potential. In a business accelerator program, it’s vital to know what market will you be serving and your anticipated revenue generation. Investors want to make a return on their investment, so be certain your business can generate enough profits to do so.
You’ve done your research on different programs
Do your research before applying to an accelerator program. Speak with alumni to get their perspective— ask about what worked for them, what challenges they dealt with, and the value of the program. This will help you to assess if it’s the right fit for your business and whether it has the industry experience and connections related to your business’s marketplace.
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