Startup Accelerators for Entrepreneurs

Even the most bootstrapping-est startup founder needs a little help from time to time. Whether that help comes in the form of financing, a mentor, a community of fellow startup founders, or access to knowledge, that help can be the factor that propels the business to success.

So where can you find this wide range of help? Startup accelerators provide all of these things and more.

What is a Startup Accelerator?

An accelerator is a program usually geared toward seed and early-stage startups that provides learning resources, mentorship, and possible access to funding.

There is also something called a “startup incubator,” which differs in a few ways.

An incubator usually provides a physical space and resources to test an idea. It may also offer a community and mentorship but doesn’t typically have a formal structure like the accelerator.

Companies That Went Through a Startup Accelerator

You might be surprised to find that many brands you know and use went through startup accelerator programs. The success of these brands is a testament to the power and potential that a startup accelerator can provide. 

Airbnb

Airbnb participated in the Y Combinator accelerator program in 2009 and got $20k in funding. Today, it’s a leader in the homestay industry.

Twitch

After video livestreaming service Twitch went through Y Combinator, it was sold for $1 billion to Amazon.

ClassPass

Fitness aggregator ClassPass participated in TechStars’ accelerator in 2012. A few years later, it received $85 million in Series D funding.

PayPal

PayPal went through the Plug and Play accelerator, which invested $100k in PayPal’s first funding round. PayPal’s global success is well-documented, and it has become a household name.

Pros and Cons of an Accelerator Program

Before you jump at the chance to possibly get serious financing to help your business, as well as access to elite contacts and resources, look at both sides of the coin.

Pros

For those lucky enough to be accepted into an accelerator program, they typically get access to investors, as well as a first round of funding (some, not all, programs offer this).

You can also gain access to mentors who know your industry and who may be able to advise you beyond what you are capable of doing on your own. You can build a network of industry contacts that could help you find partners or customers.

Startup accelerators also provide ample resources to help you grow your startup faster. If you’re in the early stages of product development, you can test your proof of concept before going to market.

Cons

On the other hand, the startup accelerator will more than likely take equity in your business in exchange for capital. You’ll have to deal with others having a say in the decision-making process for your startup.

You’ll also have deadlines and milestones to hit, which can put a lot of pressure on your business. And the “homework” may be time-consuming and take you away from your day-to-day business activities.

You may be required to move for the duration of the program, which might strain your family if you have one. And, of course, there is intense competition to be accepted, so you may go through the application process and not make the cut.

Top U.S. Startup Accelerators

There are startup accelerator programs worldwide, but these are a few with a presence in the United States.

YCombinator

YCombinator has funded 4,000 businesses since it launched in 2005. It has funded brands like Airbnb, Instacart, DoorDash, Stripe, and more.

Competition is fierce, but those who make it receive $500k. YCombinator takes 7% equity in the company, which is low for industry standards.

The three-month program runs from January to March or June to August in San Francisco.

500 Startups

500 Startups is a venture capital company that offers startups around the world, including in Egypt, Israel, Georgia, Cambodia, Japan, Taiwan, Saudi Arabia, Canada, and, yes, the United States.

The Flagship Accelerator Program in the U.S. is based in Silicon Valley. It offers a seed investment of $150k, in addition to educational content and community to help a startup scale and grow.

The seed investment of $150k is in exchange for 6% equity. There is also an option for an additional $500k or 20% of the next round of $1 million or more.

Techstars

Techstars is the largest pre-seed investor in the world, investing in more than 3,700 early-stage startups.

Every year, 500 early-stage startups participate in a three-month accelerator that provides $120k in investment, mentorship, and business resources. The program will teach you about perfecting your pitch, fundraising, working with mentors, product-market fit, hiring/firing, building, marketing, and more.

The mentors involved with Techstars’ accelerators are founders, investors, mentors, and industry leaders.

Plug and Play

Plug and Play has been helping companies at every stage accelerate since 2006. 

What makes it unique is that it does not require participating startups to give up any ownership. 

It offers accelerators in many industries, including Advanced Manufacturing, AgTech, Animal Health, Brand and Retail, Energy, Food and Beverage, FinTech, and more.

Google for Startups Accelerators 

Google, to no one’s surprise, is also in the startup accelerator game. Google for Startups Accelerators can be found around the world. They each include 10-15 startups that leverage remote and in-person events as well as one-on-one sessions, group learning, and sprint projects.

Applying startups must be able to demonstrate traction, such as in the Seed and Series A stages. They must also be deeply technical, such as leveraging Machine Learning and AI. The first three months of the program are equity-free.

Union Kitchen

For startups in the food and beverage industry, Union Kitchen might be the best fit.

This accelerator program offers food founders group sessions, one-on-one coaching, and online courses to help them with everything from launching a food business to scaling it.

The average product launch of participants is 16 weeks. That is seven times faster than the national average!

MassChallenge

What makes MassChallenge stand out is that it’s a nonprofit startup accelerator that does not take equity. Rather than all participants receiving funding, they compete for it.

Its FinTech Accelerator is geared toward mid to late-stage fintech founders and provides a solid network of industry and investment professionals.

Alchemist Accelerator

Alchemist Accelerator is for early-stage startups that monetize from enterprises. More than half of the graduating startups receive funding.

Its program tracks include Industrial Internet of Things, FinTech/Cybersecurity, Climate Tech, Digital Health, and Diversity. There are Accelerator hubs in Memphis, Tennessee; San Francisco, California; and Munich, Germany.

The six-month program includes access to a large network of faculty, mentors, and investors. Participants receive $25k in exchange for 5% equity.

AngelPad

AngelPad has been ranked the #1 startup accelerator in the U.S. by MIT's Seed Accelerator Benchmark every year since 2015.

Based in New York City and San Francisco, the accelerator programs focus on seed-stage startups. Nearly 10% of all AngelPad startups are valued at over $100 million.

The program, which includes around 15 teams, lasts three months and dives into topics like finding product market fit, defining a target market, getting first validation for the company, and finding funding. Participants receive $120k for approximately 7% equity.

They also get one-on-one mentorship, a strong startup community, and access to investors eager to provide funding for great ideas.

Is a Startup Accelerator Right for You?

Does all this sound like exactly what your startup needs? Before you move forward, ask yourself a few questions.

What stage is your startup in? Typically, a given startup accelerator looks for startups in a certain stage, like pre-seed or early-stage. You’ll want to find a program that matches where you are.

What are your plans for financing? Are you okay with giving up equity (and some control) to another party? If you aren’t interested in relinquishing some control of your company or having other opinions in the decision process, an accelerator that takes equity might not be for you.

What’s your timeline? Knowing how soon you want to achieve milestones, such as being acquired, may help you determine whether participating in an accelerator will benefit you. If you have a short timeline, a six-month program that starts next year might not be a good fit.

Still, for many startups, accelerator programs provide the perfect balance of capital, mentorship, community, and education that help them thrive.