Accelerators provide a unique platform that allows entrepreneurs and startups to accelerate their path to success by providing them not only with the necessary resources but also with expert guidance. Today, the market is saturated with various accelerators, each promising unique opportunities for scaling businesses. Among the multitude of options, entrepreneurs, and startups need to carefully choose the accelerator that best matches their goals and needs. In this article, I will discuss why business accelerators are needed at all, how they work, and how to pick the right one for you.

What is an accelerator and why does a business need one

An accelerator is an organization or program specially designed to support and expedite the development of startups and business projects. The main purpose of an accelerator is to provide participants with access to experts, investment resources, educational opportunities, and infrastructure necessary for the successful development and scaling of their enterprises.

Here are several directions in which accelerators can assist your business.

Expert Guidance:

Accelerators provide startups with access to experienced mentors and industry experts, which helps them avoid common mistakes and make informed strategic decisions.

Investment Resources:

Many accelerators offer financial support and investments, allowing startups to attract capital for the development of their ideas and projects.

Access to Networks and Partners:

Accelerators help startups create valuable connections with the industry and business partners, which facilitates the expansion of their business network and the acquisition of new customers or clients.

Education and Resources:

Most accelerators offer educational programs and resources that help entrepreneurs improve their skills and knowledge, which is crucial for successful business management.

Accelerating Growth:

Accelerators contribute to accelerating business development, enabling startups to achieve profitability and scale their operations more quickly.

Accelerators are a powerful tool for startups and business projects, helping them to minimize risks, increase chances of success, and reach their goals faster.

Types of Accelerators

There are several types and formats for accelerators, each focused on different kinds of startups and providing various resources and opportunities. Here are some of the main types of accelerators:

Vertical Accelerators:

These accelerators specialize in a specific industry or vertical, such as healthcare technology, finance, food industry, and others. They possess deep knowledge in their domain and provide startups with expert support and resources specific to that vertical.

Horizontal Accelerators:

These accelerators cover a broad range of industries and startups. They often focus on more general business skills and provide startups with access to diverse resources, including funding, training, and networking opportunities.

Corporate Accelerators:

Created by large corporations, these accelerators usually fund and support startups whose business could be related to the corporation's interests. Corporate accelerators give startups access to resources and experts within the organization, which can accelerate product and service development.

University Accelerators:

Established by universities, they provide students, postgraduates, and alumni with access to resources and the startup ecosystem. These accelerators are typically focused on developing innovative technologies and products.

Global Accelerators:

These accelerators target startups from all around the world and provide them with opportunities for international expansion. They typically have a multitude of international partners and investors.

Examples of successful accelerators:

• Y Combinator: One of the most well-known horizontal accelerators, Y Combinator offers startups funding, education, and the opportunity to present their products to investors. Many renowned companies, such as Airbnb and Dropbox, have gone through this program.

• Techstars: Another leading horizontal accelerator, Techstars provides in-depth expert support and funding to startups across various industries.

• 500 Startups: This global accelerator has active programs in various countries and provides startups with international growth opportunities.

• Plug and Play: This corporate accelerator collaborates with many major companies and is focused on innovations in various industries.

I would also like to tell you about our business accelerator. Over 14 years, our team has come a long way. Initially, we were «Visotsky Consulting», and then we transformed into the international accelerator Business Booster with our own IT platform for business management. But our intention has always remained the same — to make every business systematic and efficient and to turn company owners into competent and successful leaders. With the help of our management tools, over 1000 residents of the Business Booster accelerator have already achieved such results.

In the accelerator, every business owner can accelerate the growth of their company and significantly increase its profits through:

- Enhancing the skills of managers and employees with training programs;

- The Business Booster Board community of business owners;

- A platform for business automation;

- Support from consultants, experts, and coaches;

- Regulations, standards, and management technologies.

How to Choose the Right Accelerator

To make the right decision, several key criteria should be considered:

Goals and Needs of Your Startup:

Identify the specific goals and needs of your business. For instance, if you require funding for development, an accelerator with a strong investment program may be more appropriate. If you require expert support, ensure that the accelerator provides access to the necessary experts and resources.

Vertical Fit:

If your business is focused on a specific industry, a vertical accelerator may be the most beneficial, as it will offer specialized support and connections in your field.

Reputation and Track Record:

Research the accelerator’s reputation and track record of success. Look at previous graduates and assess how successful they have become after participating in the acceleration program.

Funding Terms:

Evaluate the funding terms offered by the accelerator, including the amount of investment, the equity stake they will take in your business, and the return conditions for the investment.

Ecosystem and Networking:

Find out what connections and networks the accelerator provides. A strong ecosystem can be a valuable asset, helping you find customers, partners, and investors.

Educational Program:

Explore what educational resources and programs are provided to participants of the accelerator. Education can be an important factor in the development of your skills and knowledge.

Geographic Location:

Consider the geographic location of the accelerator. The location can be critical, especially if access to a specific market, ecosystem, or infrastructure is essential for you.

Program Requirements and Conditions:

Assess what requirements and commitments are expected from the participants of the acceleration program. Make sure that you can meet these conditions.

It's significant to conduct a thorough analysis of the conditions and opportunities provided by the accelerator to choose one that best aligns with your goals and needs. Remember, the right choice of accelerator can have a positive impact on the development of your business and accelerate its path to success.

Key Stages of Working with an Accelerator

Working with an accelerator typically involves several key stages:

1. Application and Selection:

Initially, you need to apply to participate in the accelerator program. The application usually includes a description of your startup, team, and business plan.

After receiving applications, the accelerator conducts a selection process, selecting startups that best meet the criteria and the goals of the program.

2. Acceleration Program:

Once selected, the acceleration program begins. You are provided with educational resources and training sessions to enhance your skills in business, marketing, technology, and other aspects.

3.  Mentorship:

During the program, you often receive mentorship support from experienced entrepreneurs, industry and experts. Mentors help you overcome challenges, develop strategies, and make critical decisions. Throughout the accelerator process, participants regularly meet with mentors and experts to discuss progress and receive advice. Together with mentors, you work on developing business growth strategies, marketing, and sales, and identifying key tasks to achieve success.

3. Reaching a New Level:

Many accelerator programs culminate in a demo day when participants present their projects to investors, entrepreneurs, and the media. After the program ends, many startups receive investments for further growth and development.

You also continue to use the connections and contacts made during the accelerator to expand your network and find new customers and partners.

The process of working with an accelerator depends on the specific program and its goals. It's important to actively participate, learn, work on developing your business, and use the provided resources and opportunities.

Real Cases and Success Stories

The story of Sardor Umrzakov is a particularly telling example. He is a resident of the Business Booster accelerator. 20 years ago, he moved to the USA from Uzbekistan and initially worked as a dishwasher, loader, and laborer. Now, he is the founder of the Home Alliance group of companies — a nationwide network of home service experts in the USA. Sardor's company employs more than 400 people.

Here's what he says about participating in Business Booster:

«Before, everything heavily depended on me, all decisions were made through me. Now, my top managers can make decisions on their own. Before joining the program, the companies in the group were at different stages. It was a whole 'zoo': somewhere there were protozoa, somewhere a horse, somewhere a zebra. We needed to systematize all this. And now we have just done that, organizing a different organizational structure. They are just really well-prepared for takeoff».

Pitfalls and Mistakes When Choosing an Accelerator

When selecting an accelerator, startups, and entrepreneurs can make some common mistakes. Here are some of these mistakes and tips on how to avoid them:

1. Insufficient Analysis of Goals:

The mistake is that the startup does not clearly define what it wants to achieve and which accelerator aligns with its goals.

Solution: Before applying, determine specific goals and expectations from participating in the accelerator.

2. Ignoring the Accelerator’s Reputation:

Sufficient research is not conducted, and the startup chooses an accelerator, neglecting its reputation and track record.

Advice: Conduct thorough research on the accelerator’s reputation, and assess the success of previous graduates, and their market share.

3. Inadequate Analysis of Funding Terms:

Entrepreneurs may overlook the details of funding and accept offers without analyzing the equity stake and investment return conditions.

Recommendation: Carefully examine the funding terms and, if possible, consult with a lawyer.

4. Choosing an Accelerator Without Industry Alignment:

The right accelerator should match the vertical of your business. The mistake is selecting an accelerator without considering this aspect.

Advice: Consider accelerators that specialize in your industry to gain specialized support.

5. Ignoring Cultural Differences:

When picking an international accelerator, the startup may not account for cultural differences and market specifics.

Recommendation: Try to better understand the cultural aspects and market characteristics of the country where the accelerator is located.

6. Lack of Post-Program Plan:

Startups are sometimes not prepared for what to do after the accelerator program ends.

Advice: Develop a strategy for the post-acceleration period, including a scaling plan and investor search.

7. Excessive Dependence on the Accelerator:

Some startups rely too heavily on the accelerator, ignoring their initiative and independence.

Recommendation: Use the accelerator as a resource, but maintain control and actively work on your business.

Alternatives to Accelerators

There are several alternative paths to developing and scaling a business, and each has its pros and cons.

1. Bootstrapping (Self-funding):

Pros:

+ Full Control: You retain full control over your business and strategy.

+ No Equity Sharing: You don't have to share a stake in your company with investors or accelerators.

Cons:

- Slow Development: Development can be slow due to limited resources and expertise.

- Limited Network Access: You may have limited access to contacts, partners, and investors.

2. Venture Capital:

Pros:

+ Access to Capital: You gain access to financial resources to scale your business.

+ Mentorship: Investors may provide expert support.

Cons:

- Loss of Control: Venture capitalists may demand a stake in your company and interfere with management.

- Pressure for Rapid Growth: Venture capitalists often expect rapid growth and profitability.

3. Business Incubators:

Pros:

+ Education and Training: Incubators provide educational resources and expert opinions.

+ Infrastructure: Many incubators provide office space and infrastructure.

Cons:

- Limited Independence: Incubators may place restrictions on your business model and strategy.

- Limited Resource Access: Not all incubators provide access to investors and mentors.

4. Crowdfunding:

Pros:

+ Access to Capital: Crowdfunding allows you to raise funds from numerous small investors.

+ No Equity Sharing: You don't give up a company stake as you would with venture capital.

Cons:

- Dependence on Campaign Success: You must convince potential investors to support your idea.

- Limited Expertise: Crowdfunding may not provide you with expert advice and mentorship.

Using accelerators usually provides access to funding, mentorship, training, and a startup ecosystem. However, it often comes with the loss of some independence and a share in the company. Alternatives like bootstrapping and crowdfunding provide more independence, but may require more time and resources to achieve success. The choice depends on your goals, needs, and resources, and possibly, combining various methods may be the most effective way forward.