Is an Application to an Accelerator a good choice for every startup?

by Antonia Thomsen, Leuphana University of Lüneburg, Germany

The answer to the question of the title is: No. 

So far research has shown many positive aspects of the work of accelerators: They speed up the growth of startups and help them to prosper. By providing access to mentoring, education and financing, accelerators support entrepreneurs in reaching their goals. They enable startups to build a strong network that supports them even after graduating from the program.

In my book chapter I honor the beneficial outcomes that accelerators are able to foster. However, there is not a general fit for every startup to an accelerator program. 

As not only accelerators but also startups differ, it becomes clear that there may be new ventures that prefer to grow organically without participating in one of the programs. In addition to the preference for organic growth, the existence of an efficient network can play a major role in the decision against a participation. 

One key aspect is that already well-connected entrepreneurs do not profit as much from peer-to-peer learning. 

Another argument for not applying is the relatively large amount of equity entrepreneurs have to give up for a small amount of investment. If they have a high-quality business idea, they may have an aversion against issuing much equity.

In the following table an overview of possible features of startups that might potentially decide in favor of a participation in an accelerator program (PRO) or against it (CONTRA) is provided.

PROCONTRA 
Inexperienced entrepreneurs without a networkExperienced entrepreneurs with an efficient network
Lower-quality ideasHigh-quality ideas
Need for financing and educationReluctance to issue (a relatively large amount of) equity
No mature vision and structureClear vision and structure
Openness to fast developmentPreference for organic growth

These features show that differences between startups can have a severe influence on the application decision. 

Another very important aspect that could influence the decision are the differences between accelerators. They differ regarding their features as well as their overall quality.

For entrepreneurs this implies to have a closer look at the quality of the accelerator programs and if they have already proven their abilities. It also entails a careful examination of the accelerators to find programs that fit their startups. There are several questions entrepreneurs may ask themselves while choosing between different programs to apply to. Two rather important questions are: What features does the accelerator have? And will the program be able to help us grow in a way that suits our venture? 

After all, accelerators might select the participating startups, but it is the choice of the entrepreneurs to select programs as well. And at this point some entrepreneurs may conclude that an accelerator is not their way to go.Accelerators have become a promising and relevant part of the startup scene and can showcase several success stories. Nevertheless, they are not a universal solution that suits every new venture entering the market.

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