Accelerators

Does anyone out there have experience with accelerators in the VC space? One of the better ones approached me about joining in a mentor role but after speaking they soft mentioned the option of me coming on full time in a very senior role. I don't dislike what I do in PE but I've had the bug to do something different and have been exploring other options recently (buying an operating company which I've spent some DD dollars on, or joining a funded startup as an exec).

The accelerator thing is attractive because it would be interesting to be in the early stage and I could pretty quickly raise capital to do a post seed/A round fund for the companies in the program or just for investments in general but I don't have any real knowledge about accelerators. Any thoughts?

 
Best Response

Accelerators are a VERY expensive way of tutorship for entrepreneur/startups. In Europe are mostly working with Universities and other institutions. In SF they manage the networking (Corporates-VC-Angels) and mentor the entrepreneur in all the aspects from business model to raising financing (both D and E- mostly). In general they request up to 10% ownership for $50m+ investments but that varies greatly depending country, Accelerator and company. Where would you be based? ( I can give you more specific info)

 

In the US, particularly SF Accelerators have even more "power" because in the valley is all about the network. If you work at an accelerator you will know all the Angel investor, Seed investor, the mid and late stage VC, the growth PE and the Corp Dev. people because the network creates a) access to funding and more importantly b) JOB market. It is not really hard to find the people that want to invest with 2x to 3x return but engineers that can creates the stuff that people thought is REALLY HARD.

An accelerator is the key "marketplace" to put the right people with the right ideas and with a reasonable amount of money for a specific business plan. Mentoring and scouting talent is a priority compared to late stage VC or growth PE where the management if not up to the duty can be outset. a good way to understand accelerators is as TechBanking said, join a Uni based one and start with basic "tutoring". Be aware that is key to put on the table your contacts and exp[and further.

 

If you are looking to join a startup or do something more entrepreneurial, it's a great way to get exposure to lots of ideas. I know a handful of TechStars mentors, and I think they all enjoy it.

One strategy might be to mentor for one class, see if you like it and then join full time for the next class.

 

One additional thing that I'd add is that the teams going through the better accelerators tend to be technical co-founder heavy. One of the hardest things in starting a tech business as a business guy is finding quality technical co-founders. If you are thinking of ever starting your own business, it's a great way to find some potential dev talent and recruit them to join you, if their idea doesn't pan out (as is the case with many companies at even the top accelerators).

 

Accelerators are good places to dip your toes into the tech ecosystem. You can build a network, understand what it's really like to build a tech company at the earliest stages, and genuinely mentor high-potential people. Definitely be a mentor.

I'm a little surprised that they offered to hire you FT, though. What would you be doing? I have rarely, if ever, seen senior finance guys at accelerators. Most of the people running them have product or tech backgrounds, are ex-founders, and are relatively young (like Sam Altman or the 500 partners). Ali is the only senior finance guy at Y Combinator, and they brought him on to run the growth fund.

Feel free to PM, I know the space well.

 

There's Matchbox Labs in Boulder, CO - they're focused on consumer products specifically. Their website is fairly sparse, but I know they work with CU-Boulder and a bunch of local companies to setup mentoring.

There's also The Brandery in Cincinnati - they were originally supposed to be focused on branded consumer goods (P&G mentors) but seem to have moved more into the TechStars mold.

- Capt K - "Prestige is like a powerful magnet that warps even your beliefs about what you enjoy. If you want to make ambitious people waste their time on errands, bait the hook with prestige." - Paul Graham
 

It's difficult to get a VC or angel to fund you unless you've been in the startup scene and know people No VC will invest unless you have a working product and probably need traction. Accelerators exist to help resolve these issues

 

Accelerators give seed start ups the attention and love they need at the very early stages of their business. Sure VC's and Angels are helpful, but a brand new company will likely get a lot more out an accelerator than just the funding. Most accelerators seem to be about three months in length and offer teams mentors, office space, and connections.

Just my two cents!

 

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