Follow-Up: 6 Questions to Ask When Considering an Accelerator
We thought it was so good, it was worth reposting. Enjoy.
[Regarding the importance of asking these questions] This is REALLY important for entrepreneurs to appreciate because Accelerators are businesses! They have to make money some how so are you the product or the customer? In too many cases, you're the product - they're getting paid in other ways (sponsors, corporate partners, etc.) merely to pump you through their doors and maybe uncover that rare gem.
If you're the product, and there is nothing wrong with that, make sure they are actually investing in YOU because they are leveraging you for their business.
If you're the customer, and this is just as valid, make sure they're SERVING you since you're paying for the value they provide!
1. Who are the mentors and how involved?
Can they actually help YOU? Will they?
2. What are the perks?
Benefits dangled so they can entice you or real values that serve your work?
3. Industry specific or agnostic?
Really think about this one... Agnostic should be providing A LOT more value through their effort because their mentors/partners/investors likely aren't aligned to what you're doing. And that's okay! But Industry specific means you're likely to draw more value from them, even if the program isn't necessarily perfect - at least you're working with people in your sector.
4. How much equity do you give up?
Please for the love of all that's startup, EQUITY IS CURRENCY AT THIS STAGE! If you aren't willing to part with it, don't expect to raise money. Good programs are worth the equity. Good advisors are worth the equity. The right team members are worth the equity! Anyone telling you to hold on to your equity so you can control and retain ownership needs to be shown the door out of the startup community.
Now, granted, equity is your currency... so it is worth something and you should be intentionally in using it!
5. What are funding numbers and exits?
Think about it. Good Accelerator = Funding and Exits.
Incubator isn't the same thing, incubators incubate and teach. That program means a lot of failures and pivots because, after all, such programs are working at the stage of developing if an idea is worthwhile (most aren't!).
But Accelerator = GO. Should already be validated and proven. So if they're doing their job, well, you should be Accelerating!
6. What do alumni think?
No brainer, yes?