Cannon Connect Exclusive - Choosing the Right Accelerator

Some startups spend so much time applying to and participating in accelerator programs that they neglect the operations of their business and their company stalls or fails. At the same time, the right accelerator can add a tremendous amount of value and provide critical connections or capital that can greatly increase a startup’s chances of success. That’s why it’s vital to ask the right questions before applying to or accepting an invitation from any accelerator, no matter how prominent its reputation. 

Finding the right accelerator can be challenging, but when you choose well, the rewards can be enormous. Below is a list of questions to ask before you make a decision.

1. What do alumni of the program say?
   
2. Did startups that went through the program find it valuable? Sometimes this information can be found on social media or forums, but many accelerators will be willing to connect you with alumni upon request. You can also browse the accelerator’s website to find a list of alumni and reach out to them independently via email or LinkedIn.
3. Does the program require residency?
   
4. Some accelerators require at least one founder to participate in-person, which may require temporarily relocating to another city. It’s important to determine a program’s residency requirements before applying, or looking at one of the growing number of virtual accelerators around the world. 
   
5. Do the staff and mentors have relevant expertise or connections?
   
6. Be sure to read up on the accelerator’s staff and mentors to ensure that they will understand your business and be able to add content or connective value. Typically, industry specific accelerators are more likely to offer access to people with more relevant experience and networks. That said, industry agnostic programs can be valuable as well, but be sure to familiarize yourself with the people who you’ll actually be interacting with. An accelerator is only as good as the people running it. 
   
7. What kind of culture does the accelerator have?
   
8. Every accelerator is different, not only in the value they add but also in the environment they create. Many accelerators absorb the culture of the city they operate in and the people who operate them. For founders moving from the Midwest to New York or San Francisco for an accelerator program, the culture shock can be disarming (and vice versa). Make sure to gauge the accelerator’s culture in online reviews and your conversations with accelerator staff and alumni.
   
9. Will the curriculum add value?
10. Try to get a sense of what the courses and educational opportunities will be. Programming accelerators can be challenging given the different levels of knowledge across a cohort’s participants. The best programs take this into account and provide optionality to ensure they can add educational value to founders across functional areas and regardless of their degree of sophistication.
    
11. How much equity do they take and what are the terms?
    
12. A lot of startups don’t read the legal terms of their agreement with an equity accelerator carefully. This is a mistake. It’s important to fully understand the legal and financial ramifications of taking investment from an accelerator in exchange for equity. Consult a lawyer or accountant if necessary, but make sure you know what you’re getting yourself into. An investment structured as a convertible note, for example, carries an interest rate. If it doesn’t convert into equity, the investor can require you to start paying them back. Some accelerators let you claw back the equity if you drop out before the program ends. Others do not. 
    
13. What are the opportunity costs of participation? Will you emerge in a better position than you went in?
    
14. Participation in an accelerator can take a significant amount of your time and attention. Founders need to evaluate the benefits of participation against the opportunity costs that can emerge. For instance, some founders spend so much time meeting with mentors and attending courses as part of an accelerator that they ignore or miss other potentially more lucrative opportunities for investment or revenue generation. Accelerators can add enormous value to startups, but not if it distracts you from your ultimate goal: launching and growing your startup!

Getting into a top accelerator program can be tough. It’s important the time commitment required to apply and actively participate doesn’t hinder your ability to grow your business. That said, the right accelerators with the right staff, program and mentors can be hugely helpful for early stage companies. But remember, accelerators are not a panacea. There are no benefits that an accelerator offers that can be found elsewhere. Evaluating accelerator opportunities thoroughly will help make sure they work for you not against you.