Setting up a business requires tremendous efforts and resources. A great startup idea needs some good investment, partners and customers to flourish. Here, Business accelerators come into the picture. Business accelerators are broad pillars of support for new businesses. They are on a constant lookout for recent business establishments with few investors and rapid growth potential. Let’s find out more about business accelerators.
What is a Business Accelerator?
Business Accelerator is an organization focusing on providing a range of services along with funding opportunities for startups. Early-stage startups enroll with business accelerators to get mentorship, supply chain resources and office space. Additionally, access to capital and investment are two crucial aspects that a business seeks. Business accelerators run a three to four months long program to help startups get everything they need. However, such developmental projects are intensive and time-consuming.
In other words, business accelerators are short-term programs promoting rapid business growth. It means that a startup can explore the potential for the next few years within a few months with the help of accelerators. There are numerous benefits of a business accelerator.
The majority of the programs offer seed investments. Seed funding refers to the process of raising funds for a business in the initial stages. It is a way of procuring funds even before a company starts making money. Money is essential for fulfilling day-to-day business needs.
2. Work Time
Business accelerators provide adequate infrastructure for work. The requirements of a private office or a coworking space come under the startup accelerator growth program. Businesses can choose an accelerator that offers one or both of the options. It helps cut down the cost and ensures an effective work environment.
3. Business Clinic
Several business accelerators provide training opportunities to the startups enrolling with them. Business accelerators comprise people coming from diverse grounds, capable of mentoring in the right direction. The advisors may include successful founders, investors, and business growth experts. Thus, an accelerator allows startups to engage in seminars, workshops, mentor meetings and pitch practices.
4. External Partnerships
Business accelerators work in cohorts over several months. Various early-stage startups with the same intent come together and exchange ideas with fellow innovators. It helps founders explore new ideas and get an extensive network for their startups.
5. Pitch Day
The entire business accelerator program comes to an end after the scaling of each company. The companies then get a chance to pitch their startup to potential investors to get funding.
How do Accelerators Support Business?
Business accelerators support startups in several ways. They are the ones to provide all kinds of support to the businesses at the early stage. However, most of them usually follow a similar structure and format.
Along with equity investment, a business accelerator provides access to some essential resources like:
1. An office or a coworking space to operate the business
2. Mentors to guide you through the path of success
3. A network of customers and similar businesses
What Services Do They Offer?
The range of services that a business accelerator provides can help startups in a variety of ways. One of the most significant offerings of an acceleration program includes connecting startups with potential investors. In this way, startups can get exposure to the investor market at the Seed or Pre-Seed stage. Also, they fulfil the requirements of an office or a coworking space for a business to operate effectively.
However, you must research upon certain points to look for the right accelerator for your business. These include researching upon the background of the investors and the team and analyzing their portfolio as per their previous work. Also, it is preferable if the industry that accelerators belong to is a Limited one.
Business Application Process
The business application process requires a lot of research and preparation. Business accelerators usually follow a set of steps in which the startups participate to get investments. However, it requires focus and time to get into an acceleration program as each has specific requirements. The typical steps that most business accelerators follow are:
1. Application form
The startups need to fill out an application form in the form of a questionnaire, likely to be based on the business model of the startup. It requires in-depth research and knowledge of the company and the team. Therefore, the startup founders must be very careful while filling out the form.
2. Assessment by the Investment Team
Business accelerators assess the startups on various grounds to ensure that they are a good fit for investment. They must align with the investment sectors, funding stage, prototypes and possess proven experience.
3. Rapid-fire interview
The rapid interview or the elevator pitch usually lasts for 10 to 15 minutes. Mock interviews can help to prepare for this step once the startups make it up to here.
This is a documentation process that happens in case the startup gets investment or equity is taken. The accelerators ask for evidence, documents and other such things to make the business application more concrete.
5. Cohort of startups
On clearing the interview round, the startups become eligible to attend a cohort of startups. The cohort consists of several startups and companies coming together to get investment from a group of investors.
After following the steps mentioned above, startups can get some good investment. Additionally, the founders must ensure that they qualify for the business accelerator program. The requirements include a sound business model, a proven USP and customer life cycle. Also, the founders must have a strong background, scalable business and an understanding of cost and revenue models.
Business accelerators are the organizations willing to support startups at the growth stages. The mentorship and acceleration program and support that they provide are crucial for any startup or company to flourish. However, different business accelerators follow a distinct pattern of application and structure. A startup or company must gather complete information and knowledge before approaching an accelerator. It includes ascertaining the kind of support you require and conveys your aks in the application process. All this helps to determine whether you need the support of an accelerator. Once you ascertain the needs and requirements of your startup, you are all set to approach and enroll into a business acceleration program.