(This is second in a series of 10 blog posts from my interview with Scott Gerber for the Inc.com Founders Forum. We discussed a bunch of topics including choosing an accelerator, mentoring, acquisitions and the tech talent shortage. You can watch all of the videos on Inc.com.)
Here is the full video interview on this topic. Some text excerpts are below.
How do you determine if an accelerator is worth it?
Overall, I feel like accelerators are a positive thing. My view is, if they’re investing and providing mentorship to startups, they’re by definition helpful. They might not all be economically successful, but they can improve their communities and provide a network, which I think is the most valuable takeaway from a quality accelerator.
What should you watch out for?
I’ve seen programs started by people who aren’t entrepreneurs. You really need to have people with entrepreneurial background and operating experience in the middle of the activity. And then, some accelerators offer overreaching terms, like 10 to 20 percent equity stakes being taken for almost no money invested.
It’s really important for an accelerator to be open and transparent with their results. They should be open about who has been through the program and what kind of outcomes those companies had. If they’re not transparent, then that’s a major red flag.
Defining a set of standards
Techstars decided to start the Global Accelerator Network (GAN) in 2011 to help bring standards to the industry. We wanted to define a set of standards that seemed reasonable and beneficial to entrepreneurs, which is what we’re all about. GAN is an independent organization designed to deliver best practices and build network among accelerators. We don’t own or control any of it today, it was just a gift to the global startup community because it needed to exist. Today we are simply members like many other accelerators.
What are the definitive pillars of a successful accelerator?
I can tell you the right mix for a program that has a basis to be successful:
- Founded by people with a strong operating background
- A great set of mentors who are digging in and engaging
- Upfront funding for a reasonable amount of equity
But ultimately, the only true measure of an accelerator’s success is the success of the companies that go through the program. Important to check out their stats, if they are willing to publish them. Here’s ours.