You can’t move anywhere in the early-stage venture ecosystem without coming across accelerators. There is an abundance in the UK and globally – so much so that it seems every new headline in tech news is about a business getting accepted to a hot new accelerator programme.

But for founders, it may not be entirely clear what the value of an accelerator is for their business. And how to choose the right one. As startup CFOs, we often get asked our opinion on whether it makes sense to join an accelerator, so we thought we’d break it down for you in this short post.

What is an accelerator?

Let’s start with the basics, an accelerator is a programme that is run to help founders and their ventures grow at a faster pace than they would have if they had not joined the programme (hence accelerator). Not to be confused with an incubator which is typically a studio where new businesses are conceived and built.

Accelerators have traditionally been in-person, on-campus programmes though as with many other norms that changed during the pandemic many are offering fully virtual programmes or have moved to a hybrid offering.

What is it going to cost me to join one?

This will, of course, vary from accelerator to accelerator, but typically you should not expect to pay in cash for access to an accelerator programme. Instead, the accelerator will normally offer a range of services, and even some cash, in exchange for equity in your business. Whilst many of them will purport to have a fixed percentage in mind, it is always good to negotiate with them.

We would highly recommend against accelerators that ask you to pay cash to attend them as in our opinion that is quite a predatory practice targeted at first-time founders who may not have the right knowledge or advice to navigate the offer.

So what do I actually get out of attending?

This is the crux of the matter and will depend on the brand of accelerator that you attend. Broadly speaking you’ll be offered the following services which depending on your business and stage you’ll need to varying degrees.

Mentorship and Office Hours

Accelerators pride themselves on having great people, often exited founders themselves, available to new cohorts and who will provide mentorship and coaching as the business grows.

Sector Expertise

A number of accelerators will have deep expertise in one particular industry or technology, whilst others may offer this expertise across a number of verticals.

Office Space

One of the huge benefits of an accelerator is access to their office space which, apart from being a valuable resource in itself, also means that you can rub shoulders with other founders and teams going through similar growth journeys. Founding a company can be very lonely and this benefit is quite underappreciated.

Access to Talent

Many accelerators will have their own talent function where they can help ventures source great team members whilst others go one step further with members of the core accelerator team co-opting into your business and potentially joining full time down the track. This can be really valuable when you need high-quality individuals but don’t want to pay full-time salaries.

Events

There is a range of events that accelerators put on, from demo days to dinners to educational seminars on specific topics. These can range from lunch and learns about how to best build a financial model to larger industry events aimed at showcasing cohort companies.

Funding

Some accelerators are attached to funds and hence can invest directly, whilst others simply have great relationships across the funding landscape. If your main aim in joining an accelerator programme is to get yourself funded then you will want to think carefully about which model suits you best.

Network

In our opinion, the most important function of joining an accelerator programme is the halo effect you get from their brand and the access to their network. If the accelerator doesn’t have a huge Rolodex of contacts within VC funds, corporate partners, angel investors and networks, founders and talent in general then they are not likely to be providing you with any value at all.

So, should I join a programme?

As with many things in life, this ultimately depends on your situation and what your objectives are. 

Accelerators can be really valuable if you are stuck at a certain level of growth, or can’t find the right talent or even the right investors for your business. But they can also be a massive distraction from building your business as you spend so much time attending events, bootcamps and sessions that you have to ensure there are enough people left in the business to run it.

The equity cost might exceed the value the accelerator actually brings to the table so you need to weigh that up carefully but for some programmes like Y Combinator, the halo effect of having been accepted is worth the cost.

Whatever you do, you should think through the pros and cons carefully and if at all possible speak to other founders or companies that have been through the same programme in the past.

So there you have it, almost everything you need to know about accelerators, if you’re interested in learning more, I’d strongly recommend you listen to our podcast with David Hickson, one of the founding team at Founders Factory, a leading UK (and now global) accelerator or with Jenny Ervine, Co Founder of Raise Ventures a Northern Ireland based accelerator supporting the NI and UK wide ecosystem.