How accelerator founders make money

Startup Accelerator: How does it advance my business?

What is a startup accelerator?

The word accelerator comes from English, but has not yet found a really appropriate translation into German. That is why the term “startup accelerator” is still used in the German start-up scene to this day. One could best say that the term accelerator can be translated as “helper”, “catalyst” or “accelerator”. Because that is exactly the task of the Startup Accelerator: to accompany the founding process and to support the team or the founder with various measures. This support is limited to a predetermined timeframe and can, under certain circumstances, be of very different types.

Practical win-win situation

That probably sounds too good to be true to you at first. First of all, it should be said that startup accelerators do not provide these services without consideration. How exactly this agreement looks like cannot be said in general terms, but most of the time a profit sharing is negotiated. The startup accelerator thus benefits from the fruits that its harvest - in the form of coaching and aids - bears.

So the better the acceleration of the accelerator works, the greater the return that it can skim off from profits. This business is therefore performance-related.

If you make use of a startup accelerator, then you benefit from its resources and its know-how, you can use them for your purposes for a limited period of time and in return you give away some of the profit you generate (in the future). You have to know for yourself whether this is a model that you are considering.

How does a startup accelerator help?

An important keyword when talking about accelerators are so-called boot camps. These are the general conditions in which help is provided. This is about intensive coaching, individual support and advice, as well as helping out when there is a lack of resources. Since the accelerator comes on when the company is still at the very beginning, it usually takes a period of several weeks to a few months, but then really takes care of it. The goal is to have developed a stable company in the end.

The Startup Accelerator has different options to support you as needed. Typical things would be the provision of jobs, consultations of a technical or strategic nature, coaching and access to a broad network of contacts. The latter in particular can be worth gold for your startup, as contacts are essential, especially at the beginning, in order to be able to develop and grow quickly.

How do you get into a startup accelerator?

Since the demand for accelerators tends to be rather high, it may not be that easy to be included in such a program. That's why you have to apply (with or without your team) to such a program. This is followed by a rather radical selection and if you are still there, your chances of being accepted by a startup accelerator are good.

When you have gone through the coaching and support, the program usually culminates in the s. G. "Demo Days". The product or service is presented to the "investors" / accelerators so that they can then calculate the chances of how much profit can be expected. Sometimes external investors from the network of accelerators are also present, whereby there is then the possibility of continuing to be funded by them. In what form must then be renegotiated. So it is a great opportunity for you and your - then still - very young company.

The application process

It's actually like applying for a job. You and possibly your co-founders have to introduce yourself - depending on what is required - maybe shoot a video or send a written letter of motivation and then hope to get through the first selection. Sometimes those from the shortlist are specially invited and interviewed again, but that differs from Accelorator to Accelorator.

If you have managed to get accepted, you and your team will have a few instructive, but also tough months. Until the demo days, the boot camps work hard, train and coach until the end.

At the end you have the opportunity to present the results of the last few months in front of the accelerators and some external investors. In the best case, your funding will continue through an investment.

Accelorator vs. Incubator

These two terms are sometimes mistakenly used synonymously. There are, however, major differences in the way of working and procedures.

While the accelerators are anxious to drive growth as fast as possible through the boot camps, incubators are also active at the level of brainstorming and slow development. They don't want to grow as fast as possible, but rather help the startup at a rather slow pace. The incubator becomes part of the team, while growth through startup accelerators is brought about by external supporters.

Incubators create conditions in which the startup can develop optimally. Incubator programs are in high demand and very difficult to come by, so be quick. Most of the time you don't even have to give up company shares, but receive this sponsorship “free”.

Special form of company builder

Some companies, such as Rocket Internet, are not accelerators or incubators in the classic sense. They are more than just donors. Company builders usually rely on their own start-up ideas and then put together an internal team to turn it into a successful startup. To this end, they often employ founders from outside the company in order to benefit from the operational expertise. This possibility is not for existing startups, but a cooperation can still be worthwhile in order to benefit from the company's expertise.

Well-known accelerators

There is a seemingly endless list of institutions that offer startup accelerator programs. Some are subject-specific, country or region-specific, but you will certainly find something that suits you. Here we give you three examples:

arena42

This is a program initiated by the company bwcon. This is primarily aimed at startups that are in the field of technology and especially the Internet. Different partners from the technology industry are always invited to the boot camps.

Axel Springer Plug and Play

This program invests 25,000 euros in your startup and receives a standardized 5% company share.

DB Accelerator

As the parent company (Deutsche Bahn) suggests, this program is particularly intended for startups in the mobility sector. 25,000 euros, office space and a lot of other interesting assistance will be given to each startup.

German Accelerator

The German Accelerator brings a founding team to Silicon Valley, Boston or New York. There they have the opportunity to learn within three months how a German startup can establish itself in the US market.

Founders Foundation

The Founders Foundation is a non-profit platform of the Bertelsmann Foundation. This gathers founders and helps them develop successful companies. For this purpose, it offers various events, seminars, networks, financing and coworking spaces, with which the development of a company should be easier.

hub: raum accelerator

The Berlin accelerator hub: raum is a Telekom project. This specializes primarily in startups in the areas of Internet of Things, health and security and offers workshops and monitoring by experienced entrepreneurs,

Conclusion

It is not always easy to get hold of a startup accelerator. In most cases, there is a lot of hard work and good preparation behind this. But those who really get involved and prepare well have a good chance of being included in the program. Then you have someone who is by your side and helping you on your way to becoming a successful company.