Are startup accelerators worth it?

February 20, 2023

Assessing the value of startup accelerators for first-time founders

For most startups, the overwhelming answer is yes. First-time founders usually need a lot of support, and an accelerator can help you by: Providing a playbook from past startups, Making connections to investors, Explaining the best ways to pitch, Showing what a fund-raising cycle looks like. Accelerators can also connect you to subject matter experts to help you achieve product/market fit or even help you develop a go-to-market plan. Success stories abound. 'I’m not sure we would have made it without Techstars', says Brent Grinna, co-founder and CEO of EverTrue. In the years following its participation in the startup accelerator program, the company raised roughly $25 million in venture funding. However, you need to choose carefully so you don’t end up giving away your time and equity in exchange for off-the-shelf help. While top programs boast of a large roster of well-known graduates, the number of successful exits and amounts raised drop off rapidly, according to reports in GrowthMentor and Seed-DB. The Center for Entrepreneurship is providing startup programs like Startup Club and Startup Huddle since 2016. More than 90% of participants reported that they saw substantial value in the programs.

The Importance of Choosing the Right Accelerator

Choosing the right startup accelerator can be a game-changer. Programs like Techstars and Y Combinator are often highlighted for their extensive networks and successful alumni. For instance, Techstars has supported over 2,300 companies that have collectively raised more than $12 billion in funding. On the other hand, Y Combinator has an impressive list of graduates, including Dropbox, Airbnb, and Stripe. These accelerators provide a robust support system and resources that can significantly aid in the growth of a startup. However, it's critical to evaluate an accelerator’s track record, the equity they take, and the specific benefits they offer. Reports from GrowthMentor and Seed-DB can help in making an informed decision.