What I Learned from Being Rejected by an Accelerator

A quick web Execu|Search will tell you that there are only a few basics to getting into an accelerator: a big problem, an innovative and superior solution, a large growing market, and a great team.

Last fall, I applied to an accelerator with a foolproof plan. I had a product that is by definition innovative, as no one else in the world is doing it, and a superior solution – every member of the admission panel agreed that it is a no-brainer that it was just a matter of time before the industry would switch to my solution.

I was targeting a rapidly expanding market that had been on the front page of TechCrunch and Mashable every day for months. On top of that, I had a rock star team. I, myself, have some decently respectable credentials to cover the business side of things. And if I asked you to name the 10 companies or organizations producing the world's greatest technological marvels, I'm pretty sure that half your list would have counted my two engineer cofounders as employees or alums.

And we were rejected.

What went wrong? I think I've figured out most of the answer to that question now, but I wish I could have done it sooner. To help anyone in a similar situation avoid my mistakes, I present a few words of advice. As to specifics, my list below is pretty far away from comprehensive, but it is a few things that I didn't get from online sources, and that I wish someone had told me.


Know your audience.


The panel of judges was made publicly available, and while we read over their profiles, we didn't get to know them personally due to time constraints. People like this are generally very willing to meet with you, hear about your company, and give you their perspective. Figure out who these people are before the application period even begins, and start to build relationships. Their advice will probably be very helpful, and is an investment in your future, even if it leads to nothing for your company. You'll be able to ferret out their concerns and learn what they like and don't like ahead of time. On top of that, it will make them a lot more receptive to what you're saying; when they hear you repeating their perspectives in your presentation, it will put them on your side, making it as if they have a stake in your success.

Above all, consider your audience's experience. If they have all reached success by founding or investing in social media startups, they might not be comfortable investing in your advanced manufacturing startup. Remember, they are evaluating not only you, but also their ability to help get you where you need to go.


Understand the accelerator's business model.


This particular accelerator is designed for web-based companies. The time period is about half a year, and the initial investment is $25k. We wanted to have a team of four people develop a product with hardware for an industry that is historically slow moving. For web-based companies, $25k can mostly support two developers and a few miscellaneous administrative costs, which is all you need to get a web-based company to the next stage. Again, put yourself in the accelerator's shoes, and evaluate if your plan fits with their model. Will the resources you'll have get you to the next stage? If not, re-evaluate your plan.


Budget time to practice (and sleep).


We finished putting together our presentation at 2:00 a.m. the night before our early morning presentation, then ran through it twice. I'm perfectly comfortable with public speaking, but I felt unprepared, and it showed. Sleep deprivation accumulated over the prior few weeks also didn't help. Guy Kawasaki, renowned Apple executive and entrepreneur, estimates that after you have finalized your speech, you need to go through it uninterrupted 25 times before you have practiced sufficiently. I don't think he's far off. Budget accordingly. (My #1 recommendation as a source for these types of presentations is Guy Kawasaki's book Art of the Start, by the way.)


Get the presentation over with.


Your presentation will have very little value, because it is very hard to know what your audience is thinking. You may think that they will have certain concerns (or look positively on certain things) based on your perspective or even past experience with similar audiences, only to discover that they are completely comfortable with what you thought would be a concern, and very concerned about what you thought was a non-issue. Cover the basic points as quickly as humanly possible, and leave as much time as you can for Q&A. I would suggest, as a rule of thumb, that you put together your presentation like you want it, time it, then limit your final presentation to a quarter of the time that it took to go through your original. However, I would also recommend including a massive appendix section in your PowerPoint. The idea is to convey the basics, get to Q&A as fast as you can, then have a slide answering every possible question that could be asked. A team member can navigate to each slide as you answer the question.


Do your research, and bring a notebook.


Some advice that you'll probably get frequently is to appear supremely confident, but coachable. Translation: make sure you know more about your market than your audience, and find a way to prove that you are continuing to learn at an extremely rapid pace. The first part is relatively straightforward – just don't underestimate your audience. A foolproof way to get the second part down is to simply pull out a notebook as soon as the Q&A starts. Every time a question is asked, write it down (or at least appear to write it down) or take a note. This makes you appear like you are constantly seeking new perspectives and information, which is a key quality that accelerators want to see. If you happen to have a third founder, the one who isn't lead speaker or PowerPoint navigator can be the note taker.
Sounds simple, but it's powerful.

If you're applying to an accelerator, or even just thinking about it, PM me. I'd be happy to share my perspective.

Comments (22)

 
Best Response
Feb 4, 2014 - 2:38pm

Rhys da Vinci:

there are three basics to getting into an accelerator: a big problem, an innovative and superior solution, a large growing market, and a great team.

Yes.

Array
  • 2
 
Feb 4, 2014 - 3:29pm

Thanks for this! Working towards applying to one in LA in the next couple of months.

He who is not contented with what he has, would not be contented with what he would like to have. Socrates
 
Feb 4, 2014 - 4:13pm

didn't even know what this was before reading the thread
thanks

happy to give advice; no asking for referrals please
 
Feb 4, 2014 - 7:11pm

@heister before i realized you were in the comments already, I was going to ask why not hook a brother up and look at his pitch. Sell a few acres and diversify.

 
Feb 4, 2014 - 9:00pm

Zargo:

If your approach, product, team, and market is so solid, aren't there better ways of securing funding than an accelerator?

Your question is a bit like asking, "Why should I get an MBA at Harvard if I'm already so smart?"

First of all, unless you have substantial personal funds you are willing to invest (which many of you might), it is probably worth it for any startup to get into the best accelerator you can. Accelerators give you funding, credibility, and contacts, which are all assets than most startup can use regardless of how solid their idea is.

Secondly, having a solid idea and setup only take you so far. You have to also be the fastest and most effective at implementation, which is no guarantee. Statistically, my startup will probably fail. Getting into an accelerator is the most commonly acknowledged method to better those odds.

By "better ways", I'm assuming you mean bootstrapping, angel investors, or crowdfunding. In order:
1) Bootstrapping isn't an option due to the cost required to protect IP and commercialize.
2) Angels typically only invest in this type of company at a later stage.
3) Crowdfunding is better for consumer goods, and we're pursuing a B2B model. Plus, crowdfunding can hurt you down the road due to messy regulations about general solicitation.

 
Feb 4, 2014 - 9:37pm

BlackHat:

What's an accelerator

Basically, an organization that gives very early stage companies with high growth potential a small amount of money ($25k - $50k is typical) for a small amount of equity (5% - 10% is typical). This allows people who might otherwise never make the jump to entrepreneurship to have the opportunity to do so. Besides funding, accelerators give mentorship, access to connections, access to next-stage investors (angels or early stage VCs) and a stamp of legitimacy.

Conceptually, I think about it this way: the chances of any one startup achieving success (defined as returns that beat the equity markets) are under 1%. A typical VC's risk profile is going to aim for much better odds - maybe somewhere around 50%. The hope is that an accelerator can institutionalize the process of bridging at least a portion of that gap through access to intermediate capital, mentorship, connections, and additional access to capital.

 
Feb 7, 2014 - 10:59pm

Rhys da Vinci:

BlackHat:

What's an accelerator

Basically, an organization that gives very early stage companies with high growth potential a small amount of money ($25k - $50k is typical) for a small amount of equity (5% - 10% is typical). This allows people who might otherwise never make the jump to entrepreneurship to have the opportunity to do so. Besides funding, accelerators give mentorship, access to connections, access to next-stage investors (angels or early stage VCs) and a stamp of legitimacy.

Conceptually, I think about it this way: the chances of any one startup achieving success (defined as returns that beat the equity markets) are under 1%. A typical VC's risk profile is going to aim for much better odds - maybe somewhere around 50%. The hope is that an accelerator can institutionalize the process of bridging at least a portion of that gap through access to intermediate capital, mentorship, connections, and additional access to capital.

+1.

Winners bring a bigger bag than you do. I have a degree in meritocracy.
 
Feb 4, 2014 - 9:29pm

Great post. I think the point about 'knowing your audience' is one of if not the most important general thing I've learned since I started working. And I completely agree on focusing on Q&A and having a huge appendix when giving a presentation, though that doesn't necessarily mean you have to rush through / downplay the actual presentation because the presentation could be when people's opinions take shape.

 
Feb 4, 2014 - 9:40pm

Going Concern:

...that doesn't necessarily mean you have to rush through / downplay the actual presentation because the presentation could be when people's opinions take shape.

Agreed. However, the human tendency is to spend much longer than is necessary to communicate a compelling story about a problem and a solution, then check a few boxes with the standard info. Another Guy Kawasaki reference (sorry, I'm fresh off a couple of his other books): he has never once seen a single startup presentation that was too short. Most are too long.

 
Feb 8, 2014 - 9:20pm

@castondavis, @matayo, @FeelingMean, @BatMasterson, and @Menascyn - glad I could help.

@Zargo thanks for the great question.

@heister not sure who's slinging for no reason, but I sent over some SBs to make up for it. Thanks for keeping me honest.

 
Feb 8, 2014 - 10:09pm
Follow the shit your fellow monkeys say @shitWSOsays Life is hard, it's even harder when you're stupid - John Wayne
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