Seed accelerators, also known as startup accelerators, are fixed-term, cohort-based programs, that include mentorship and educational components and culminate in a public pitch event or demo day. While traditional business incubators are often government-funded, generally take no equity, and focus on biotech, medical technology, clean tech or product-centric companies, accelerators can be either privately or publicly funded and focus on a wide range of industries. Unlike business incubators, the application process for seed accelerators is open to anyone, but highly competitive. There are specific types of seed accelerators, such as corporate accelerators, which are often subsidiaries or programs of larger corporations that act like seed accelerators.
The main differences between business incubators and accelerators are:
- The application process is open to anyone, but highly competitive. Y Combinator and TechStars have application acceptance rates between 1% and 3%.
- A seed investment in the startups is usually made, in exchange for equity. Typically, the investment is between US$20,000 and US$50,000 (or GB£10,000 and GB£50,000 in Europe)
- The focus is on small teams, not on individual founders. Accelerators consider that one person is insufficient to handle all the work associated with a startup.
- The startups must "graduate" by a given deadline, typically after 3 months. During this time, they receive intensive mentoring and training, and they are expected to iterate rapidly. Virtually all accelerators end their programs with a "Demo Day", where the startups present to investors.
- Startups are accepted and supported in cohort batches or classes (the accelerator isn't an on-demand resource). The peer support and feedback that the classes provide is an important advantage. If the accelerator doesn't offer a common workspace, the teams will meet periodically.
The primary value to the entrepreneur is derived from the mentoring, connections, and the recognition of being chosen to be a part of the accelerator. The business model is based on generating venture style returns, not rent, or fees for services.
Seed accelerators do not necessarily need to include a physical space, but many do. The process that startups go through in the accelerator can be separated into five distinct phases: awareness, application, program, demo day, post demo day.
The first seed accelerator was Y Combinator, started in Cambridge, Massachusetts, in 2005, and then later moved to Silicon Valley by Paul Graham. It was followed by TechStars (in 2006), Seedcamp (in 2007), Startupbootcamp (in 2010), Tech Wildcatters (in 2011), several accelerators of SOSV, and Boomtown Boulder (2014).
With the growing popularity of seed accelerator programs in the US, Europe has seen an increase in accelerators to support a growing startup ecosystem. Top rated seed accelerator programs in Europe include Seedcamp (based in London) and Startupbootcamp (pan European accelerator with program locations and office spaces based in Copenhagen, Amsterdam, Berlin, Israel, Eindhoven, Istanbul and London).
Forbes published an analysis of startup accelerators in April 2012. Since 2010 there has been substantial growth of Corporate Accelerator programs, which are sponsored by established organizations but follow similar principles.
In 2011 Matt Clifford and Alice Bentinck, formerly management consultants at McKinsey & Company, co-founded Entrepreneur First, a London-based accelerator which guides promising tech graduates and those already working in technology firms to design and run their own startups. Entrepreneur First differs from other accelerators such as Y Combinator and Wayra in that it works with individuals rather than companies.
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- Gruber, Frank (June 20, 2011). "Top 8 European Startup Accelerators and Incubators Ranked Seedcamp and Startupbootcamp Top Rankings 2011". Tech Cocktail.
- Tomio, Geron (30 April 2012). "Top Startup Incubators And Accelerators". Forbes. p. 1.
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- Shead, Sam (10 September 2015). "Entrepreneur First: Why it's different to other accelerators and who its latest startup champions are". Tech World. Retrieved 1 October 2015.
|Wikimedia Commons has media related to Startup accelerators.|
- Seed Accelerator Rankings Project Ranks accelerator programs based on confidential and public data.
- MyStartupLand An anonymous review website for startup accelerators, events and competitions.
- Global Accelerator Network An organization of accelerators who are focused on supporting entrepreneurs and equipping them with the tools, resources, and knowledge to grow a successful business anywhere.
- Seed DB A database of seed accelerators and their companies
- Corporate Accelerator DB A list of corporate-sponsored accelerators
- Startup Factories European accelerator programmes
- ICC - International Create Challenge ICC - 3-week immersive accelerator program