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Startup Accelerators: Are They the Key to Overall Success?

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With the ever increasing number of startups, there has also been a parallel rise in the number of accelerators. Accelerators are mentorship programs that help entrepreneurs obtain seed financing and other assistance to help their product go from ideation to successful startup status.

Since the launch of Y Combinator in 2005, accelerators have played an important role in the startup ecosystem. However, a recent study, “Accelerating Startups in Emerging Markets,” indicated that most startups tend to participate in accelerator programs to boost their skill set or marketing strategy rather than just to connect with investors.

During the last ten years, startup accelerators have been gaining popularity. This has led to a tenfold growth in their number in the United States alone.

US accelerator pool

Image credit: entrepreneur.com

Participating in an accelerator program can be very promising in terms of acquiring necessary investments. These figures indicate the amount of investment acquired worldwide by startups in 2016.

Total accelerator investment worldwide

Image credit: gust.com 

There is stiff competition among startups wishing to participate in the most popular accelerator programs. Y Combinator and AngelPad both got Platinum Plus ranking among top US accelerators in a recent study conducted by Seed Accelerator Rankings Project.

Seed Accelerator Ranking Project

In spite of the abundance of accelerators, for many startups the choice is clear: either Y Combinator or none. With AirBnb, Stripe, Dropbox, and Reddit among its graduates, Y Combinator is definitely the most desirable program. Looking at the current level of these graduates, it’s obvious that the people at Y Combinator know how to help a startup grow. Year after year, it remains at the top of accelerators’ ratings.

Similar to Y Combinator is AngelPad, which was named among the top US accelerators for three years in a row. Graduates include Pipedrive, Buffer, and Spotsetter. The applicants admit that it’s hard to get into the program, but nonetheless, totally worth it.

A year after the Y Combinator launch, Techstars joined the accelerator world. It doesn’t boast big names among its graduates, but you’ve probably heard of Bench, ClassPass or Contently. Unlike Y Combinator, which requires a 3-month relocation to the Bay Area, Techstars offers 37 various programs worldwide, as well as a virtual accelerator program that can be accessed from anywhere.      

Several of our own clients have thrived after participating in an accelerator program. NextCaller, which is a “real time call verification” technology, joined Y Combinator as part of the Winter 2014 program and received a $5M investment in 2017. Ecovent, a Techstar graduate that released an app for remote temperature control, acquired more than $9M in funding. And ClassPass - a NY based fitness startup and a Techstars alumni - gained over $150M in funding. These examples are more than just inspiring. They’re proof of the power of the accelerator program.

With access to experienced mentors, office space and investors, accelerator training programs may just be the key to success for any startup. And with so many programs to choose from, it’s important that any entrepreneur carefully consider all options in order to meet their particular needs and expectations.

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