With so many business accelerators out there, how do you know which one is right for you? Founders First takes a closer look.
This is part two of our two-part series on business accelerators. Last time, we covered the basics: What accelerators are and why they might be worthwhile for your business to consider. We talked about the results you can get from accelerators, including helping your company pivot to a successful or more lucrative business model.
Today, we’re going to go further and talk about the best practices and components that make for a successful business accelerator. Armed with the right information, you can shop around and choose the best accelerator for your business.
What makes for a successful accelerator?
Recent research has identified the key factors that make accelerators uniquely successful. Here are some key criteria:
1) Fixed-term
They are fixed-term with a beginning and an end in a short period of time for fast, intensive learning. A premium accelerator is not like a two-year college program. Though the best accelerators do keep up their relationship with you after you graduate.
2) Cohort-based
They are cohort-based, which adds friendly competition and the chance to interact with peers with valuable perspectives and experiences — who may become friends or colleagues for life. You might even find the competition and peer pressure motivating!
3) Mentorship
They are mentorship-driven. Accelerators are run by business leaders who have “been there, done that,” and they are looking to pay it forward by sharing their expertise. With the best accelerators, mentorship doesn’t stop the day the curriculum ends. It lasts a lifetime. At Founders First, all of our graduates remain part of our family for ongoing mentorship.
“Founders actually brought in experts that could guide us,” said FastPath graduate Linda Amara of Klarinet Solutions. “That was a real advantage that was worth every penny that we’d spend because I couldn’t hire a full-time person in each of the areas where we were flat.”
4) Demo days
They culminate in a graduation or “demo day,” which is a chance for all the participants to show what they have achieved and get feedback from their peers and mentors, who can help with recommendations and next steps.
5) Optional financing
They can lead to growth financing. Not all accelerators have a financing component. Founders First does. We offer revenue-based financing for select companies that graduate from our Fastpath executive program. We have $100 million in committed capital for just that purpose.
“We got the best of both worlds through the revenue-based investment. We’ve actually grown our revenue by two and a half times over the course of two years, which was really significant for us,” said Amara. “It also meant we were able to hire more people, so we actually doubled the size of our staff.”
Choose the right accelerator for you
With lots of options to choose from, be sure to kick the tires on accelerators to ensure you choose one that fits your goals. Be clear what you need help on. Define the problems you want to solve. Make sure they match up with what an accelerator is offering. And evaluate the costs — in cash, time, energy, and possibly equity.
At Founders First, for example, we never take an equity stake. There’s a flat fee for our programs, and then if you do get financing through us, it’s revenue-based financing, which takes a small percentage of future income, which we help you generate. You don’t lose equity or control, nor are you strapped with loan payment every month.
Since 2015, we have helped accelerate the success of hundreds of small, service-based, business-to-business companies. Our companies are run by women, people of color, military veterans, members of the LGBTQ community and those located in urban communities. We have a focus specifically on lifting up these groups that have been dramatically underrepresented in the ranks of business leadership and without access to growth capital.
Companies that have fully completed our programs and are fully active members of our platform have experienced an average of 25% growth per year. Within 3–6 months of completing our programs, 85% of our graduates have increased revenue, 73% have increased profits, and 75% have added recurring revenue streams.
We accelerate the success of diverse, under-resourced founders. If you think we might be a good fit for you and your business, you can learn more here.
