In mid-2015, I was successful in applying to an accelerator program in Melbourne, Australia. I’d found out about the program and I didn’t know if my chances were that good, but I thought I’d give it a shot anyway because I had a new business idea that needed some funding.
By context and by background, I am a serial entrepreneur so I love starting new businesses all the time.
An accelerator program, if you haven’t heard of it already, is an organization move that invests some money typically into a group of people — all with different business ideas. Giving each of them a portion of money and taking a slice of equity in the newly formed businesses. They then guide them through a few months of a program where they are held accountable and helped to turn their ideas into profitable and scalable businesses.
The most famous accelerator in the world, of course, is Y Combinator, a Silicon Valley based program. Out of Y Combinator have come amazing startups, such as Dropbox and Airbnb. Being a non-technical Australian, getting into Y Combinator is somewhat unlikely so instead I applied for Angelcube.
AngelCube terms were quite favorable to me honest in the Australian start-up ecosystem context because they gave you $40,000 and took 8 percent of your business. Giving you a half-million dollar valuation right off the starting line.
So. How did I get in?
Well, I wrote up my application. It was shortlisted from 200 other applicants along with 19 others. Then I had the opportunity to pitch my idea for a few minutes in front of a panel, go back and forth with this panel for another few minutes, and then they made the decision. I was one of six lucky teams to get in to the program. All the paperwork was gotten out of the way with minimal stress and minimal time and they were all onto the fun stuff of building a startup.
The program lasted three months. During those three months we were held accountable every week to decide what it was that we needed to focus on in order to grow our business.
Every Monday morning we would talk about our goals, what we needed to do for the week. Every Friday we would do something called pitch-or-pivot, where we pitched the latest version of our business, or we decided that we were going to pivot the business based on what we’d learned that week.
In a physical sense, we were working day and night at the coworking space in Melbourne called Inspire9. On either side of me I had people who were in the same battle as me who were trying to grow their company. It was good to be surrounded by people like that because I found that in the past, I struggled to have the sense of responsibility and discipline required to continuously execute all the things that need to be done. So being surrounded by motivated people was very, very useful.
It was also great because I got to witness them doing different things every day, got to learn from their mistakes, and to share my ideas with them as well as help them grow their businesses. And I became really good friends with quite a few of the program participants.
So I’d say definitely the main thing that you get out of an accelerator program — besides of course the cash — is the accountability because they hold you to accord for what you say you’ll do. They know they’ve only got your attention for a short period of time so they want to provide the maximum value that they can in a short period of time.
Besides having regular group meetings in holding us accountable, they also facilitated the introduction and mentorship of various potential investors and established entrepreneurs every Wednesday. We got to have a one-on-one — each of us with a very experienced V.C. or entrepreneur who helped us in our current state of business. It was also a great opportunity to form relationships with people who would have been much harder to get in contact with had we not been in the accelerator program.
The program culminated in a demo day. Demo day is when a group of startups will each take turns pitching their idea in front of an audience. Usually that audience will have at least a few investors in it who are looking for businesses to invest in. We spent quite a lot of the last month just refining our pitch and getting a lot of practice sessions in giving each other feedback so that it came across smoothly.
Now this is what I don’t like about accelerator programs; they have a fundamental set of incentives that can sometimes contradict with the founder’s personal values. An accelerator program knows that if it’s ever going to make a return on its investment, it needs to invest in businesses that have high growth potential and can potentially one day be acquired for a sum with lots of zero’s. What that means is, as an entrepreneur within an accelerator program, you kind of don’t really have a choice. You’re supposed to build a business that can reach that potential, a unicorn valuation.
So at some point during the program, if you discover that you know the business that you’re working on probably won’t reach that milestone but instead could still be a small healthy sustainable business, it doesn’t really fit in with the accelerator’s goals. They are only going to win as an accelerator if you have a big exit. So if you turn out to have that kind of business at the end of the program, then your goals aren’t really on the same page and it can create conflict.
I personally found that my business had quite a limited ceiling on where it was going to be when it came out of the program. But of course the program incentivized me to pitch it as an x-billion dollar business, which to be honest didn’t feel right. So that’s the only downside of going through an accelerator program in my eyes. Apart from that, I think it’s an incredibly valuable learning experience for anyone who’s interested in entrepreneurship and wants to actually build a business. It’s a learning experience that money can’t buy.
It’s like doing an MBA in three months because it forces you to learn through trial-and-error incredibly quickly in the real world and the end result can be a business that changes your life and changes others’ as well. So if you want to grow a business, I encourage you to look up the local accelerator programs in your area and to apply – because you never know what might happen.
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