Accelerator Programs: What to Prepare BeforehandStartup Law ResourcesVenture Capital, Financing
Accelerator programs or seed accelerators help companies learn how to run their business. Read our guide on what and how to prepare beforehand.5 min read
Accelerator Programs: What Are They?
Accelerator programs, also known as seed accelerators, help companies learn how to run their business by providing mentoring, education, and financing. Mentors are provided to help entrepreneurs navigate the competitive and sometimes confusing start-up world and may even help with funding. The programs usually last for relatively short period of time (e.g., a few months) where the aim is to teach the participant several years’ worth of experiences and information in order to accelerate the timeline for success. The program typically ends with a public pitch event where business owners can present their ideas to potential investors. Accelerators generally ask for a small piece of the company in return.
Accelerators are similar to business incubators with some distinctions -- for example, incubators generally focus on growing an idea while accelerators generally focus on increasing the rate of growth of an existing business, already past the simple “idea” stage. In addition, incubators generally don’t operate on a set schedule, as accelerators generally do.
To get into an accelerator program, you must apply and go in for an interview. If accepted, you'll be trained along with other entrepreneurs. The spots in an accelerator program are very competitive -- sometimes with even only one or two in a hundred applicants being selected.
There are some things you can do to improve your chances of being accepted to an accelerator program:
Prepare Your Company's Legal Information
If an investor likes your idea, that doesn’t mean they will jump in blindly to support it. They will want you to demonstrate that you have the ability to run a business and that everything in your existing business is in order. This means you should have the following in order and easily accessible:
Board of directors information.
You should consider Incorporating in Delaware beforehand, but this may or may not be important for the initial acceptance into the program. There is a good chance that you will eventually need take this step, in order to attract investors, but the timing and importance of when the step is taken depends on many factors. Remember that if you incorporate in Delaware, you also need to register the corporation in the state in which you do business, which can add additional cost to a cash strapped start-up.
Get Intellectual Property Agreements in Order
An accelerator will want to know that your business’ intellectual property is protected. Speak with an attorney to make sure you have taken the right steps to secure you trademarks, copyrights, patents, and trade secrets. Click here for a guide on how to best protect your intellectual property.
Perfect Your Elevator Pitch
An elevator pitch can make or break you during the interview. This pitch is the shortened version of who you are, what your company does and what you are looking for from the person to which you are talking. Your elevator pitch should be no more than 60 seconds and ideally no longer than 30 seconds. You likely will be asked to give your pitch during the interview, so focus on what's most important.
Some good tips of elevator pitches include:
Grab their attention with the first line. Be real. They hear hundreds or even thousands of these pitches, and cliche “marketing” lines can make their eyes glaze over.
Describe your product and the problem it solves in plain terms so that they easily understand exactly what your product will do.
Explain your background and that of your team. Give concrete examples of something you have successfully done in your life, whether it is related to business or whether it is related to something completely different. Again, remember that they hear a lot of these pitches, so say something to make them remember you.
State the the benefits of investing in your business.
Have an effective call to action.
It is always important to tailor your pitch to the audience and avoid jargon. You may find it useful to write down and meticulously edit and practice your pitch before you give it, but do not forget to be yourself.
Do Research on Competitors and the Accelerator Program
An accelerator program interview is not the place to try and “wing it.” The interviewer wants to know you've done your research on competitors and offer something special. Additionally, always prepare by researching the accelerator program itself so you can explain why their program is the best for your company. Click here for a listing of some of the best accelerator programs.
Perform Mock Interviews
This could be the most important part of preparing for an accelerator program. The interviews are fast-paced and will include many questions. There are a few things you should focus on during these mock interviews:
Don't ramble on. They want clear, concise, and substantive answers. Make sure your answers are to the point. Don't let your mind wander.
Prepare for questions that will “hurt.” These are competitive programs, so make sure you're not caught off guard. Always be prepared to give an honest answer. Again, remember to simply be yourself.
Make sure you and any co-founders are on the same page. This is not the place to disagree.
Don’t ignore your faults or make up vague, generic statements about your competitive advantage.
Never get defensive.
Bring energy and personality to the interview.
You want to leave the meeting with the accelerator convinced that you and your business have the potential to be big.
Create a List of Questions for the Interviewer
You will have a chance to ask questions. In fact, the interviewer may think it's strange if you don't -- after all, you're there to put part of your business in someone's hands. Make sure some of these questions focus on the mentors in the program. This also will help you learn if the accelerator is right for you.
Gather Founder, Shareholder/Investor, and Fundraising Info
If you already have shareholders, you'll want basic information about who they are. You’ll also to be prepared with information on your other founders and team. Accelerator programs may be more likely to choose you if they are confident in not only you, but in the team you have put in place behind you.
Many startups walk into an accelerator program without any investors, and that's okay. If you do have investors, though, gather their information. It will help to show the interviewer that others have already put faith in your idea.
Accelerator programs generally provide a relatively small amount of seed funding. This will not keep your business going forever so be prepared to explain your plan for raising money.
Have Proof of Market Validation and a Plan for Acquiring Customers
Market validation shows the interviewer and investors that your idea has a shot. Validation could be anything from revenue reports to email server lists showing that people are interested. You don’t want investors to question whether anyone would pay for your product. Similarly, you need to be able to explain your marketing strategy. It may also help to have a prototype or minimum viable product to share with the interviewer.
For next steps, you may be interested in reading the guide on raising money from friends and family and on how to raise venture capital.
If you're ready to take your company to the next level or need help preparing for accelerator program interviews, post your legal need in UpCounsel's marketplace. From getting intellectual property agreements to preparing your business to issue shares, UpCounsel's lawyers have an average of 14 years experience to help get the job done. And since 95 percent of attorneys are screened out, you know you'll only receive the best legal aid on behalf of professionals from the top law schools in America.