When thinking of start-ups, it’s hard not to think about the many success stories. However, most of start-ups don’t survive for very long. Accelerators help young entrepreneurs; but does it work?

Start-ups are often seen as unicorns, which started in dull garages and have become worldwide successes, right? Not always. There is a dark side to all the success stories too. Most start-ups don't survive for a long time because of the start-up capital being too small, having made wrong estimates or because the product simply wasn’t successful. There is a market for helping start-ups. The accelerators’ market.

Accelerators help young start-ups to gather knowledge and capital.

In what way do start-ups benefit from accelerators? We will answer the three most important questions concerning accelerators.

1. What is an accelerator?

The aim of an accelerator program is to accelerate the learning process of a start-up, which is done by helping young start-ups through the first (and hardest) phase.

“Because of setbacks, founders easily become demotivated. In an accelerator program, they are provided with a network, experience and often a workplace, which gives them certainty.”

An accelerator connects start-ups with experienced entrepreneurs, who serve as mentors to the young entrepreneurs. Although this may sound very generous, the accelerators profit from the start-ups too, if they are to become successful. In fact, the accelerators can be regarded as investors – in return for their help, the accelerators receive shares, usually around 10%.

2. What must a start-up look for when choosing an accelerator?

There are two types of accelerators. ‘New’ accelerators find it important to work together with start-ups with opportunities, even when there is a low turnover. ‘Traditional’ accelerators mainly look at the possible turnover growth.

In other words; what accelerator is most beneficial depends on the start-up. A start-up must look into whether the accelerator’s aim suits their own ideas.  

“Accelerators are also founded by municipalities, universities or companies. A university’s aim would be to support scientific research, whereas a municipality wants to create more employment – as long as it fits the aims of the start-up..”

Accelerators founded by companies often don’t receive any shares. They mainly use the start-up to show how innovate their company is.

3. Are accelerators beneficial to start-ups?

An example of a start-up in the Netherlands:

“In a time period of three months, we have learned a lot. Not only when it comes to financing, but also strategically. We consider having received this in exchange for shares to be a reasonable settlement – we benefited greatly from the program.”

Some start-ups even move to a different country and/or a different city to join forces with an accelerator. So we would say that joining an accelerator program can be a good idea but make sure you pick the right one!