NAOMI BIRDTHISTLE, RICHARD BUSULWA, STEVE DUNN
27th February 2020
The following is excerpted from Associate Professor Dr Naomi Birdthistle, Dr Richard Busulwa and Steve Dunn's book, published by Wiley. Professor Birdthistle's research has received numerous awards including Emerald Literati awards, a best Doctoral Dissertation Award from the Family Firm Institute, and the Institute of Small Business and Entrepreneurship (ISBE) best paper in a conference track. Naomi has run her own consulting business and has worked in her family business in Ireland.
8 Key Benefits of Startup Accelerator Programs
Although the benefits of accelerator programs differ from one accelerator to the next, our research revealed 8 key benefits as outlined below;
1. Accelerated evolution
Accelerated evolution relates to the speed with which startups make progress while in the accelerator (and thus advance through one or more stages of startup evolution).
2. Accelerated Learning/Skills Development
This usually occurs through education / training delivery and coaching and mentoring elements built into accelerator curriculums.
3. Funding / investment readiness / fundraising
This usually comprises of one or more of the following: cash investments in cohort companies in exchange for equity, a living stipend for the period that founders are participating in the accelerator, helping startups understand and do what is required to be attractive to investors and linking startups to a network of investors for fundraising.
This usually comprises of access to the accelerator’s network of investors, entrepreneurs, professional business service providers, specialist advisors, corporate partners and other stakeholders. This network can be a great source of potential clients, potential strategic partners, potential investors, potential cofounders, potential employees and a broad range of intangible opportunities.
5. Professional business services
This is usually comprised of free access to accelerators’ in-house business service providers such as legal advisors, business model strategists, corporate communication advisors, financial advisors and many more. Startups not part of an accelerator might find the cost of such specialist professional services prohibitive - assuming they can find such startup focused specialist services to begin with.
6. Getting Strategy Right
This usually involves accelerators helping founders to think through and make the right short, medium and long term strategic choices. These choices may, for instance, involve issues such as: should we spend all our money on having solid patents or just try to be first? Should we manufacture ourselves or should we license? Should we partner with distributors or do it ourselves? Should we choose a particular technology standard or hedge our bets?[i]
7.Ongoing advice/Hands on Support
Ongoing advice / hands on support, involves ongoing access to the accelerator organizers and advisor networks for advice regarding any number of issues that might come up during or after the accelerator program. Sometimes entrepreneurs need a trusted advice or a sounding board, particularly someone who has experience helping other startups to successfully get through a similar challenge. As well as the advice, accelerator organizers can sometimes roll up their sleeves and holding founders’ hands to navigate them through particular challenges. Such a challenge might include, for example, negotiating fundraising rounds, negotiating an acquisition deal, structuring a strategic partnership agreement or going through a stock exchange listing process. Accelerator organizers will likely have been through these challenges with other cohort companies and have people who can offer hands on help to founders, albeit this may come at a cost.
8. Honing entrepreneurs’ professionalism and confidence
This usually comprises of honing entrepreneurs professionalism and confidence when dealing with prospective hires, investors, customers, strategic partners, the media and other stakeholders.
[i] Gans, J., Scott, E.L., & Stern, S. (2018) Strategy for Start-Ups, Harvard Business Review. Available at: https://hbr.org/2018/05/do-entrepreneurs-need-a-strategy [Accessed 7 Nov. 2018].