Startup (or seed) accelerators have indeed accelerated, ever since they pulled up to the investment scene in 2005. First created as a concept by the likes of Y Combinator, we now see them flourishing in other parts of the world including Europe as part of a growing startup ecosystem.
A quick tuneup on what an accelerator is.
An alternative to incubators, angel investors and early stage venture capitalists – accelerators are a mechanism to help secure enough investment to bring a concept to market. The foundational idea is to provide a startup with a fixed-term, intensive mentoring program (sometimes funded, public or private) that puts participants in the hot seat to graduate (hence the name “accelerator”) in the ramp up for “Demo Day”, AKA - the big pitch to investors.
For a budding startup operating in a wide range of industries, being accepted into a great mentorship program and expected to graduate in order to pitch to big-name investors is the stuff of dreams.
Traditionally, until accelerators came along, this road was offered by incubators, their 1950s counterpart - often government funded and rarely offering seed investment in exchange for equity.
Is an accelerator right for your brand?
For any startup, it’s important to consider all avenues of investment opportunities – from savings and inheritance, friends and family, crowdfunding, traditional business loans, business grants, the private equity route, cashflow loans from angel investments or the incubators.
What makes accelerators useful and unique is twofold:
the power of validating a business idea in a competitive environment (one report suggests that as few as 3.8% of all applications to accelerators are accepted) by being accepted by a discerning community of entrepreneurs who believe the concept has legs
getting to hammer out the gaps in the concept, at pace - by experts and colleagues
Mentoring is central to accelerators. The often comprehensive support will not only identify gaps in the product or service but also closes the gap by sharing the knowledge of what investors want and expect. Like anything in business, pitching is a learned skill. When done over and over again, and accompanied with the right guidance, you can create an undeniable pitch. Learning to tell your story and expose the opportunity in a compelling way that hooks the market, is imperative to sway a panel of industry experts and/or investors to secure funding.
Accelerators are not for everyone, but assertive brands that are “nearly there” and inspired to conquer a period of intense focus to get over the line and in front of investors should definitely consider the route.
Which one to choose?
Choosing the right accelerator can be a challenge, but the good news is there is plenty of choice. With more than 3,000 tech-focused accelerators worldwide and 1,000+ in the US alone.
We’ve reviewed some of the leading lights serving the FitTech, WellTech and HealthTech sectors and picked them out as accelerators which have a track record of accelerating startups to market – and beyond.
Techstars
Outline:
One of the biggest ones out there. Applications open six times a year and stay open typically for 12 weeks. The 3-month accelerators are based in cities across the world and offer funding, mentorship, and access to the Techstars network “for life”.
Past successes and alumni:
• ClassPass
Among Techstars’ star pupils, ClassPass is now one of the world's largest networks of boutique fitness studios and gyms.
• Owlet Baby Care
Owlet offers a health monitor that allows parents to view their child's vital signs in real-time. Made its NY Stock Exchange debut in 2021 valued at “more than US$1bn”.
In their own words:
“Built and run by entrepreneurs themselves, we understand the complexities of putting your ideas into action and scaling them.”
AngelPad
Outline:
Based in NYC and San Francisco, AngelPad has been ranked top accelerator by MIT each year since 2015, with companies raising US$2.2bn so far. The average funding for all AngelPad company is more than $14m. It selects around 15 teams every six months from a huge pool of applicants (usually around 2,000).
Past successes and alumni:
• AllTrails
A global outdoors platform. Helps people explore the outdoors with hand-curated trail maps along with photos, reviews, and user recordings crowdsourced from its community of millions of registered hikers, mountain bikers and trail runners in 150 countries.
• Human API
An API for wearable tech and health data which currently connects to more than 20,000 data sources and includes 90% of hospitals in the US along with 300+ wearable devices and fitness apps. Designed to give consumers a simple way to control and share all their health data with applications of their choosing.
In their own words:
We have one simple motto “Your Success is our Success – it’s simple: Everything we do has the single goal of making our founders and startups successful. If they succeed, we succeed – if they make money, we make money. We are 100% aligned with our Founders, we even own the same class of shares than them (unlike financial investors like VCs).
Boost VC
Outline:
Despite the "VC" in its name, it’s actually an accelerator. It mainly invests US$500k in startups who are raising less than $1m and targets pre-seed valuations between $3m and $7m. After receiving the initial investment, startups participate in a three-month accelerator program, from which hundreds of companies have completed and gone on to raise billions of dollars.
Past successes and alumni:
• FitXR
VR-based fitness platform which offers daily updated on-demand classes across boxing, dance and HIIT.
• Mighty Health
An exercise, nutrition, and holistic wellness program designed specifically for the users age and ability. Offers unlimited access to low-impact workouts, from chair yoga to low-impact aerobics.
• StrengthPortal
Helps personal trainers and gym brands scale their business by offering 1-to-1 support and training as well as scalable and profitable training services – such as hybrid and online coaching for gym members. Customers include Equinox.
In their own words:
We know you are focused on building your company and talking to customers, so our program is designed to have the highest impact without getting in your way. It’s an opportunity to work very closely with our team, build a network, generate momentum and prepare for fundraising by leveraging our demo day platform when the timing is right.
Founder Friendly Labs
Outline:
Equity-free startup accelerator for experienced tech industry professionals. Slightly different in approach as it focuses on market-ready startups.
Past successes and alumni:
• Wello
A fitness startup which was acquired by Weight Watchers
In their own words:
Our founders are experienced tech industry professionals and include veterans from Google, Apple, Facebook, and Microsoft, a Co-Founder of Excite, and a Partner from Sequoia Capital. As part of our equity-free startup accelerator, startups can receive cloud credits from partners including Amazon Web Services (AWS) and Google Cloud Platform (GCP). We understand founders are busy, so we offer a low-commitment experience.
Pic: Pixabay/DiggityMarketing
