If you follow the entrepreneurial space, chances are you’re familiar with accelerators such as Y Combinator, 500 Startups, Tech Stars, and many other notable programs. Many modern aspiring entrepreneurs view accelerators as the key to success for their project.
While these entities can provide a boost to your business, as with most financing rounds it’s important to fully understand the terms of any arrangement before submitting your applications.
Before continuing it’s important to note that the terms incubators and accelerators are not interchangeable. Although the differences are beyond the scope of this article, incubators can be thought of as being geared towards companies who are looking to grow over an extended period of time. In most cases incubators are geared towards scientific projects which require an extensive amount of capital and development before something can be created.
“The biggest benefit an accelerator or an investor can bring to the table should be experience and expertise to help your company grow.”
This is spot on. I just finished DreamIt in Philly, and the expertise from the partners and mentors was truly the best value.
One thing you didn’t touch upon here is that with a 1% acceptance rate, the other teams you are with for 3 months are extremely smart and driven people. They end up helping you a ton as well. While I consider myself a great programmer from previous startup and freelancing experience, I went to a state school. Many of these people went to Wharton, HBS, Princeton, Brown, etc. Being immersed with them for 3 months was almost as great as working with the entrepreneurial geniuses who started and ran DreamIt.
Its the mentors, partners, and other team members coaching you and helping you establish your business identity and pitch that makes 6% trivial to give up for companies at the right stage for it, like in our case.
Thanks very much for the feedback and excellent point! As I myself am currently looking at MBA programs, I totally agree that you’re spot on when you say that the price premium can be worth the networking opportunities alone.
It really all depends on your mindset and how you’re looking at opportunity costs, but as they say, “a lot of nothing is worse than a little bit of a large amount.”