Dying to be the next Dropbox or Airbnb to emerge from a rock star startup accelerator? Get in line. The market for early stage funding for hot startup brainchildren is bursting at the seams.
If you hook up with the right accelerator, you could tap into a wealth of vital resources to get your business idea off the ground, including the capital to take your idea from concept to product to launch. Add to that top-notch mentoring, hands-on training, influential networking and press exposure, and -- fingers crossed -- you might make it big.
But first you’ll need to ace your application.
Here are 10 essential questions to ask when shopping for and applying to a startup accelerator:
1. What are the first steps in seeking out and applying to a startup accelerator?
Start by talking to people from companies that have already graduated from accelerator programs you’re interested in, says Christine Tsai, partner at 500 Startups, an early-stage seed fund and incubator program located in Mountain View, Calif. Ask them what it’s like to spend a lot of time in close quarters with members of the accelerator because, if your application makes the cut, you’ll log lots of hours together, she says.
Most accelerators, including 500 Startups, Y Combinator, Techstars and several others, list their graduates (often referred to as alumni) on their websites. Tsai also advises searching for accelerator alumni on Quora, a popular question-and-answer website. "There are plenty of helpful 'What is it like to go through [X accelerator]' threads on there."
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2. Does it cost anything to apply to or join an accelerator?
It depends on the accelerator, but generally startups shouldn’t have to pay cash to apply to or be part of an accelerator, according to David Cohen, founder and chief executive of Techstars, a mentorship-driven startup accelerator headquartered in Boulder, Colo.
"The accelerator should invest and only win when the company wins," he says. "This is what defines a true accelerator." Techstars charges nothing to apply for or to join its program.
However, a few accelerators do charge for participation. For example, 500 Startups charges $6,000 per founder and $3,000 per non-founder to take part in its program, though applying is free. The fees cover basic costs associated with running the program "and should be thought of like a tuition (vs. office rent)," according to 500 Startups FAQ.
3. How can I be sure I’m dealing with a real, trustworthy accelerator?
Cohen suggests you visit the Global Accelerator Network (GAN), a network of 50 accelerators across six continents in 63 cities that Techstars launched as part of the White House Startup America Initiative. On GAN’s website you can research exactly what constitutes an accelerator and access a list of GAN-certified programs.
4. What’s the secret to getting accepted?
While there’s no one-size-fits-all magic formula to make your startup a shoo-in, there are some ways to make your application stand out. Tsai says the first thing she looks for when reviewing applications is a coherent, detailed demonstration of your startup’s capacity for traction.
"I immediately scroll down the application to look for performance -- number of customers, revenue, active usage, how these numbers are growing month over month."
Tsai also suggests showing that you thoroughly understand your target customer. Also be sure that your application is well-written, concise and, most importantly, 100 percent complete.
5. Should I include a video with my application?
Many accelerators prefer that you submit a short video that highlights your products and services, and introduces members of your team.
Kicklabs, a San Francisco-based stage-agnostic accelerator, states on its application web page that short pitch videos "generally attract more attention and may considerably improve your chances of getting funded." Putting together a sizzling, high-impact and clever video, perhaps with the help of a professional videographer, can be well worth the time, effort and money.
Tell the human side of the story behind your product in the first 20 seconds of your video, which generally shouldn’t last more than two to three minutes total. Briefly but dynamically explain what inspired you and why the accelerator should choose you.
6. Should I get recommendations from mentors and founders associated with the accelerator I’m applying to?
It wouldn’t hurt your chances of getting accepted. Most accelerators look for recommendations from their network. Just like job searching, knowing someone in an influential position on the inside -- or knowing someone who knows someone on the inside -- could give you an edge.
500 Startups openly relies on people within its network to help "filter, evaluate and find the type of companies that fit our investment thesis." Empty, bare bones referrals like, "Hey, meet my friend X! Thx!" don’t cut it, according to the popular program’s FAQ.
7. What are accelerators looking for when it comes to my startup’s team?
Most accelerators want to see well-rounded, highly-motivated and hard-working startup teams that bring a diversity of skills, knowledge and experience. Even more important, Tsai says, is showing that your team of founders has worked together for more than a few years, not a few months, and gets along well in a variety of conditions.
8. Should apply in person?
Not under any circumstances, unless you’re lucky enough to be personally invited, which doesn’t happen often. Otherwise, dropping by an accelerator on a whim will likely land your application in the trash.
Most accelerators' FAQs specifically frown upon drop-ins. However, some offer informational sessions and tours, enabling prospective applicants to check out their office culture and meet some of the key people behind their programs.
9. What are some pitfalls to be leery of?
Tsai cautions to be wary of accelerators that "don’t let you run your own company or expect you to change your company for them." She also warns that you shouldn’t be hearing consistently negative feedback about an accelerator from graduated companies.
Cohen adds that you should be wary of accelerators that aren’t completely transparent. "If they’re protecting you from talking to their past founders or looking at their track record to date, that’s a red flag."
10. Once accepted, how long do most startup accelerator programs take?
The standard model is typically three months total, but can range between 10 weeks to a year, according to Cohen. "By definition an accelerator is short-term. It’s not a landlord."
If you’re accepted, you’ll likely be based on-site at the accelerator’s working and meeting spaces to make the most of in-person coaching, planning and networking.