How do startup Accelerators work?

CHRIS MINCHELLA , GROWTH MANAGER , GUST LABS INC.

25 Jul 2023

We receive a lot of questions about accelerators here at Gust, and they usually fall into one of three categories:

1. How do accelerators work?
2. How do I pick the right accelerator for my start-up?
3. What’s the benefits of joining an accelerator?

This is a two-part series. In this article, we will address the first question. The next article will tackle the second, and if you read both, you’ll have a good understanding of the third. Let’s get started.

Overview and General Process
Accelerators are as diverse and varied as the start-ups they serve. While there are some universal features, such as an application and selection process and educational programming, the specific offerings can differ widely. Most, but not all, will offer networking opportunities (with the exception of programs that focus heavily on one-on-one mentorship) and most, but not all, will offer some form of funding opportunities, either through direct investment or by leveraging their network of investors for targeted introductions or a demo day-style event. Let’s delve deeper into the details.

1. Application & Selection Process: Startups apply and provide essential information about their team, business model, product/service, market potential, and growth plans, along with any other pertinent questions aligned with the accelerator’s areas of focus. If you have a Gust account and are applying to accelerators on the Gust Accelerator Platform, much of this information will be linked to your profile, saving you a significant amount of time. The accelerator will then assess and choose the most promising applications to proceed with a selection process, which may involve interviews, pitch sessions, and due diligence. After completing the selection process, the accelerator extends admission offers to the startups they consider to be the best fit for their program. Those startups who accept the offers are typically grouped together in a cohort with other startups for the duration of the accelerator program.

2. Cohort-Based Structure: All of the startups that are accepted into the same run of a program are referred to as a “cohort.” In many cases, the companies in the cohort go through the accelerator program together, fostering a supportive and collaborative environment. If the cohort is particularly large, it may be further broken down into groups aligned based on company stage, industry, or other criteria. This structure enables startups to learn from each other, share experiences, and build a valuable network.

3. Mentorship & Guidance: Usually, accelerators will have access to a network of experienced mentors, industry experts, and other successful entrepreneurs that cohort members can learn from. They’ll help offer guidance, advice, and expertise based on whatever credentials they bring to the program. This can either be 1 on 1, in breakout groups, or in a lecture format (live or prerecorded). Some accelerators have a specific focus, and their mentors all have expertise in different facets of the same functional area such as growth or go to market strategy. Other accelerators may have mentors focused on a particular technology or industry (blockchain, robotics, AI, etc.) but with diverse functional expertise.

4. Educational Workshops & Curriculum: Programs often include a structured curriculum or a series of workshops covering the specific topics the accelerator has chosen to focus on. The topics can vary widely, ranging from general business administration to more technically focused subjects. Many programs tailor their curriculum to address topics relevant to specific stages of a company’s growth, such as fundraising, growth strategies, talent acquisition, or product development.

5. Networking & Connections: Most accelerator programs (particularly those following a cohort model) offer ample opportunities for networking, allowing you to connect not only with mentors and staff but also with your fellow peers in the startup space. Networking with other entrepreneurs can be a valuable source of advice, potential strategic partnerships, or simply a chance to relate with others who understand the challenges of building a company from the ground up. The camaraderie and connections formed during an accelerator program can be highly beneficial, especially in the world of venture. It’s important not to underestimate the value of these relationships, as anyone you interact with in this space could, in a matter of months, become an employee, employer, strategic partner, or even a competitor, depending on how each of your entrepreneurial journeys unfolds.

6. Funding Opportunities: Accelerators may offer financial support to startups in various forms, such as seed investment, grants, or access to investment networks. Some accelerators invest directly in startups in exchange for equity or convertible instruments. Additionally, accelerators can leverage their network of investors, venture capitalists, and angel investors to facilitate funding opportunities for the startups they support.

7. Demo Day & Graduation: Many accelerators conclude their program with a “demo day,” providing startups with the opportunity to showcase their progress and present their business to a wider audience, with a significant focus on the investment community (angels, VCs, etc.). Graduation from the accelerator program signifies the formal completion of the program, yet many accelerators continue to offer ongoing support and resources to their alumni. While not every accelerator strictly adheres to this format, the vast majority of the accelerators you’ll encounter (especially on Gust) will follow something similar. Understanding how accelerators work is just the beginning. In the next part of this series, we will discuss how to evaluate whether an accelerator is a good fit for your startup.

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