Startups Anonymous: What Every Founder Should Ask An Accelerator
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There are lots of articles out there on whether an accelerator is right for you or how to maximize your time at an accelerator. There is a common component to all of these articles, and it's the due diligence aspect. Having gone through a program, I will admit I did not do as much due diligence as I should have, so if I could do it all over again, these are the questions I would have asked and why.
Ask the managing director:
What entrepreneurial experience do you have? How have you earned the right to advise me on the growth of my company?
People say there is a potential startup accelerator bubble. With accelerators popping up everywhere, it seems that anyone and everyone can suddenly become a managing director for an accelerator. That's why this is one of the most important questions. Entrepreneurs understand other entrepreneurs. They know the struggle. They know the issues. They can empathize easily. If the MD has no "real" entrepreneurial experience (did they start a company), then I don't think they have any right to advise you on the inception and growth of your company.
How strong are your connections to the mentors/investors/etc. involved with the accelerator? How much time do we actually get with mentors?
Famous names. Big names. Whoop de doo. Do these names actually help the companies they are involved with or is this just a list so that a mentor can put another bullet point on his or her resume? This is a question that one should definitely repeat when asking the previous cohorts. How strong do they feel the connections to the mentors/investors are? It will reveal a lot about the strength of the program. Lots of programs also list big names, but sometimes they show up for a day then leave never to be heard from again. Find out how strong these connections are.
How happy was your last class?
No matter how the MD answers, investigate further. It's your company and it's your equity that you're giving. Make sure it's worth it.
Are you working on any side projects or is the accelerator your full time job?
If the accelerator isn't the full time job (FOR THE WHOLE YEAR), then question why it isn't so. There may be a good reason, but it's up to you whether to determine if that reason actually is a good one or not.
How many hours do you work a week? How strong is your hustle? How strong is your team's hustle? How did you choose the people around you? What experience does your team have?
This will let you probe into the team of the accelerator. As an entrepreneur, you're going to be working 60-80 hours a week. While you shouldn't expect the accelerator and their team to work the same hours as you do, if you hear anything where they just work a simple 9-5 I'd worry.
Not everybody who enters a cohort makes it. Can you provide me a reference with a company that didn't make it to demo day?
There are stories of how people almost didn't make it to demo day by leaving early in a program. Find these people and ask what happened.
How are your previous cohorts doing now? Can I have a reference? Name the companies in your cohort that got funded and by who?
If they dont want to give references, it's a huge warning sign. Ask them how many companies are still active. These stats should be publicly available, but sometimes they aren't. Make sure you find out as this will help you determine whether an accelerator can really help your company. The last part of this question is to see what kind of investor network they have.
What can you say will be something I will definitely get out of this experience?
I had one accelerator that my company was considering tell me that 'getting money is the easiest part.' That gave me a huge red flag and we went elsewhere. This is a question that will see whether they truly believe they can get you the sun, moon, and stars (in which case, caveat emptor), or whether they will give you a more realistic goal such as a network of bright colleagues, introductions to people, etc.
What is the planned curriculum/structure of the next 10/12 weeks? What will we cover?
You're there to learn. You dont want this half-assed.
How hands on are you with your companies? How do you deal with creative differences?
Some accelerators are generally hands off. Others are extremely hands on. It's the latter of the group that you will have to worry about creative differences. These can be intense, and as long as things remain amicable in the end, then you will be fine. It's that question that you should definitely repeat with other companies.
Once accepted ask...
Can you introduce us to mentors now? (see how responsive their mentors are)
If the MD says a disparaging comment about one of the mentors, find out and reach out to the mentor yourself to find out if they really are worth time or not. MDs who disparage their mentors on the list should not even have them there.
Can I see the term sheet? (SEE IT BEFORE YOU ACCEPT THE OFFER. NON-BINDING IS NOT SUFFICIENT)
You should be okay with GAN (Global Accelerator Network) accelerators as they typically have market terms. It's accelerators that aren't in GAN that you will need to check to make sure you aren't getting screwed. I've seen some pretty non standard market term sheets, so there are definitely shitty ones out there.
Final part of due diligence is to get time with the companies that attended. I would ask more than one company if you can. Usually, the emails are [email protected] or [email protected] Just reach out and press on things. You will have to read in between the lines to their answers.
- Would you go through this accelerator again? If so, why or why not?
- What are the strengths of the accelerator? What are the weaknesses?
- Do you think it was worth your % equity to go through the program?
- How did the accelerator help you after demo day/graduation?
[illustration by Hallie Bateman]