Hey there, fellow founders! So, you’ve got that startup idea, maybe even started building your product, and now you’re staring down the barrel of questions like, “How on earth do I fund this thing?” and “Where do I even find my first users?” Sound familiar?
I’m Michel, been on building my 3rd startup Astronuts, and I’ve had the pleasure of going through two accelerator programs in my journey. And let me tell you, it’s been a wild ride. But let’s break it down, shall we? The good, the bad, and yes, even the ugly of startup accelerators, so you can make up your own mind about whether they’re your golden ticket.
So, what’s up with all the hype behind startup accelerators anyway?
Think of it like this: accelerator programs, the likes of YC, 500 Startups, and Techstars, are like your startup fairy godparents. They swoop in at the pre-seed and seed stages, usually being the first big check you’ll get besides hitting up your family and friends for cash. Typically running about 12 weeks, these programs are jam-packed with learnings and perks. You’ll get hooked up with top-notch mentors, dive deep into workshops covering everything from growth hacking to legal mumbo jumbo, and perhaps most importantly, you’ll tap into a network of fellow founders who are all in the same boat as you.
Oh, and did I mention the cash? Yep, they’ll usually throw anywhere from $120k to $500k your way, in exchange for a slice of that startup pie you’re baking up. Usually, they’ll take about 6% to 9% equity in the form of a convertible note or a SAFE (that’s a Simple Agreement for Future Equity, in case you’re wondering).
I’m now 42 years old, I started my first company at 22, so I think I’ve gotten enough battle scars to say that at my stage and experience, the accelerator programs might not be ideal for me personally even though I am still learning new things, which is great btw. For young, first-time founders, though? Accelerator programs are like a treasure trove of insider knowledge. It’s like getting handed a cheat sheet for the startup game. You’ll soak up wisdom that can save you from some seriously costly mistakes. Legal stuff, fundraising, snagging those elusive first users, even navigating the murky waters of co-founder dynamics.
Take Techstars, for example. Sure, the valuations might not always be sky-high, but the value you get? Priceless. They’re like the Jedi masters of startup acceleration. With programs like Techstars or YC under your belt, you’re not just launching a business, you’re launching it with a stamp of approval from some of the biggest names in the game. And that, my friend, is worth its weight in gold.
My personal experience with accelerators…
So, picture this: I’ve been through not one, but two accelerator programs. First stop: Reloadly, a fintech startup I co-founded back in 2019. A year later, we swooped an $800k seed round with my first accelerator experience with coming in with a $120k investment. Sounds exciting, right? Well, hold onto your hats because their valuation was $900k lower than what we got in our seed round. Ouch, right? But hey, we were so excited to get funds in the bank that we didn’t mind the lower valuation and rolled with it because their team seemed like the dream team we needed to rev up our startup growth.
Now, let me set the scene for you. We’re talking about a remote accelerator program, which sounded cool at first. But reality check: after the initial two weeks of turbocharged intensity, things kind of plateaued. Sure, we learned a bunch and the team was pretty awesome, but after the first initial two weeks, things kinda slowed down and I felt that we weren’t getting the full accelerator experience out of it.
Fast forward a bit, and our company’s growing like nobody’s business, 1000% year over year. The very same accelerator VC fund participated two funding rounds down the line. But let’s truth be told, when it comes to the accelerator itself, I was expecting fireworks and got more of a sparkler. A key lesson learned: my first hires should’ve been builders (engineers, product managers, designers) instead of a team of sales people.
But it’s not all doom and gloom. The real value? It’s in the connections. The doors that this VC accelerator opened with investors and the awesome founders we met along the way who are still my friends today. So, if I had a time machine, here’s what I’d whisper in my own ear before diving into The Venture City Accelerator Program:
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- Builders, not just sellers, should be your startup team from the get-go.
- Don’t be shy – grill your mentors with questions and challenges .
- Call up fellow founders who’ve gone through the same program for some insider intel.
- Keep it crystal clear with other investors about that lower valuation to dodge any drama.
- Being part of a cohort accelerator program is way better than our solo gig experience.
- Remember, nobody’s gonna wave a magic wand and fix all your problems. It’s on you, founder, to hustle and nail that product-market fit like a boss.
While Reloadly is still up and running, I decided to join a new adventure with Arun, the previous VP of engineering at Reloadly: Astronuts. The seed of this idea sprouted back in April 2023, right in the thick of wrestling with product velocity headaches at Reloadly. No magic solution in sight, we thought about countless product concepts, but one thing was crystal clear – we wanted to be the problem-solvers for developers.
Our first crack at it? An analytics AI platform tailored for engineering teams. Fast forward to December 2023, and I’m shooting my shot with an application to Techstars Miami – my stomping ground. Cue the drumroll – we got an invite from the one and only Andres Barreto, Techstars Miami’s MD, followed by two other meetings and bagged a spot in their Spring 24 program.
From day one, the vibes at Techstars were electric. Picture face-to-face interactions, happy hours with fellow founders, and a buffet of workshops on everything under the startup sun. It was a far cry from my first stint in the virtual world of accelerators during the COVID era. The energy, the camaraderie – it was a whole new ball game. BTW, the Techstars Miami crew really know how to host their founders…
Talk about a reality check! Barely a week in, and we got punched in the face – our product’s value proposition wasn’t THE hair on fire problem, more like a nice to have solution. Ouch, right? But hey, sometimes you need a swift kick in ass to get back on track. So, we rolled up our sleeves and dove headfirst into a reiteration and pivot frenzy, all within a week with my co founder Arun.
The silver lining? Surrounded by fellow founders in the Techstars hive, we had a support system to bounce ideas off of, to dissect our vision, and to showcase what we were cooking up. It was like having a brainstorming squad on steroids. And you know what? From the ashes of our initial setback rose a newfound clarity and laser-focused product direction. It’s amazing what a bit of friendly feedback aka “customer interviews” and collaboration can do for your mojo. In this picture below, you’ll see Arun doing a live demo to follow Techstars founders.
Isn’t it funny how sometimes the simplest advice is the hardest to follow? Case in point: talking to your users. Sure, it sounds like a no-brainer, but let’s face it – many founders skip this crucial step. But not us. Nope, we’re diving deep into the customer discovery calls daily, thanks to the wisdom of our mentors and Andres himself drilling us with this.
I was focused on get to 50 customer interviews, and the feedback we’re getting is pure gold. It’s not just shaping our product development roadmap; it’s practically laying down the bricks for it. And get this – some of these folks we’re chatting up? They’re not just voices on the line; they’re becoming some of our very first paying customers. Talk about a win-win!
Here’s the insights from my Techstars perspective:
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- Networking: The real MVP here? It’s the Techstars network. Think mentors, investors, and fellow founders – they’ve got your back.
- On the founders side: Forget about preferred stock headaches. Techstars dishes out common stock investment, giving founders a sweet advantage.
- Showtime: Need a stage to flaunt your product? Cue Techstars’ demo platform – your ticket to wowing potential investors.
- Pitch Perfect: Crafting the perfect pitch? Say no more. Techstars has your back, helping you polish that pitch until it shines.
- All-in-One Support: Feeling stuck? Just holler at Techstars associates. From lead generation to cozy intros with investors, they’ve got your back.
- Techstars Universe: Step into this virtual wonderland and score warm intros to fellow founders, investors, and a treasure trove of perks.
And oh, did I mention the perks? Yeah, tons of them… So, if you’re still sweating over valuation, these perks might just tip the scales in Techstars’ favor and saving you tens if not hundreds of thousands of OPEX costs.
Listen up, fellow first-time founders – here’s the scoop: if you’re lucky enough to grab a spot in an accelerator program, consider it a golden ticket. Sure, the acceptance rate is tougher than getting front-row tickets to Beyoncé, but hey, you’ve got to shoot your shot.
Forget about getting hung up on valuation. What matters most is the opportunity these programs present. They’re taking a gamble on you and your brainchild when most others wouldn’t even give you the time of day. Think about it – access to killer networks, fundraising support, and a treasure trove of resources you’d struggle to find elsewhere.
So, don’t hesitate. Apply, dive in headfirst, and soak up every ounce of wisdom and opportunity these programs throw your way. Because let’s face it, startups are a wild ride, and every bit of help boosts your chances of turning your dream into the next unicorn. Good luck and if you want to join an accelerator program after all, here’s a curated list of startup accelerators to consider.
Cheers and good luck!
Michel | Follow me on X
