Crossing the finish line: What does it really take to get admitted?
As we head into the final stretch of the selection process for our 2014 venture acceleration program, I’ve been giving some thought to what makes a company attractive to accelerators (and angel investors and VCs, a little further down the line).
Our job as accelerator managers is absolutely, 100%, the selection of startups with great potential. This is our first and most important job. We could do everything else well, but if we pick losing companies, we’ll be nowhere. That’s how important selection is. So, how do we do it?
There is an art and a science to selecting companies with great potential. Honestly, part of it is intuitive, entrepreneur-to-entrepreneur. We know it when we see it – and a lot of selection comes down to a perception of sheer hustle and grit.
But there are definitely outstanding objective criteria and there are important actions that a startup can take to put themselves at the top of the heap.
These are the things the very best venture accelerator applicants are doing to win:
This means that the company has gone out and talked extensively to its market and has evidence of this process and has some results. Sometimes that is a list of interested buyers. Sometimes that is an extensive mailing list. Whatever you can get, do it! Get on it. This is what it means to hustle.
Honestly, if you do great at this process, a lot of other inactivity will be overlooked. This is the most important item.
We want to see quality communications, practiced and polished presentations, a professional personal image and an ability to connect with investors and answer questions confidently and concisely.
And if you don’t know something, have the ability to say, “I don’t know. I’ll have to get back to you about that.” We respect that.
There’s really no substitute for showing up. That means taking the time to come to events prior to making an application and especially after making an application, asking intelligent questions about the acceleration program and mentors, and generally being involved in both the accelerator’s events and in the larger community. This is critical, yet too many startups don’t bother, but still think they’re going to get into a program and raise money. You’re hurting your odds.
Keep us in the loop
The very best accelerator candidates are sending us regular updates. Some of them are doing it through their own regular newsletter, which is fine. Some of them are doing it informally with update emails and info on progress, traction and milestones. Some companies are doing both.
The reality is that sending out an email doesn’t cost very much, but the impact is huge both for admission to an accelerator and for raising funds and finding customers. And remember, every contact counts! We don’t want an email from you every day, but something every couple of weeks helps to push you to the top of the list.
Talk to angel investors before you talk to us
The very best accelerator candidates are already talking to investors. Usually these are angel investors. And maybe the talks are preliminary and don’t go anywhere. That’s OK. The critical thing is that the startup is acting like it is serious and it is learning from each of these encounters.
The best candidates are telling us who they’re talking to, what they’re hearing, and where they want to go with their investment strategy. The accelerator will help great startups to refine and execute these plans, but you’ve got to have a plan and be taking some actions to look like a serious candidate.
Be talking to multiple accelerators…
There’s a fine line to be walked on this one. Part of your job when founding a startup is to create demand for your stock and for your product. This isn’t an essay on sales, but any great salesperson will tell you that one of the best ways to create demand is to create artificial scarcity, limited time and competitive pressure. If your startup is being courted by multiple accelerators and investors, you’re doing all of those things. Which is great.
…But take admission discussions very seriously
Just be careful not to overplay shopping your startup around. We want to see you taking an admission discussion very seriously.
We’ve seen companies blow off a serious admission offer from one accelerator based on an empty promise from another program. Then, when admission to their “first choice” accelerator never materializes, they find the door closed at the accelerator that actually made an offer. Ouch!
“A bird in the hand is worth two in the bush” and that’s especially true in startup land. You can’t run a company on hope and promises. (Actually, you can for a little while, but not long!)
If we start talking to you about admission, get on it, or expect to be dropped from the list. Your approach to admission discussions is a big filter for us. (The same goes for investors!)
Be careful with your momentum and non-profit programs
This one is a little difficult for some in the startup community to understand, but it is important. If a private venture accelerator sees a startup that has already gone through multiple incubation, development, pitching or contest programs of some kind, but has not quickly made excellent use of that momentum, then that is a red flag for us.
Applying to an accelerator out of an incubation program or a non-profit accelerator is fine. But the hard truth is that private venture accelerators are not looking to attract the cast-offs from other programs.
If you’re going to do a program before applying to an accelerator, you need to look like a rock star coming out of that. If you spent your time and effort doing a program and didn’t attract at least some angel investment or make a lot of development progress, we’re going to be scratching our heads and asking “Why?”
We all have a limited amount of time and money available, and as an accelerator, we have to back winners. It is required for survival. If your startup was supposed to achieve something by going through one of these programs, and did not achieve that goal, that’s going to be a knock against the startup. Be careful how you spend your time and be careful how you spend your startup’s limited runway and momentum. Every day counts.
Finally – Be looking for acceleration!
This is really a key gateway issue. If you’re not really looking for acceleration – for example, you haven’t read through our program materials, don’t understand acceleration, haven’t shown up at events, haven’t asked any questions, haven’t reviewed the mentor roster, don’t act coachable, don’t have a real need or desire for investment and rapid growth – then you’re not really looking for acceleration.
That’s OK. Accelerators aren’t right for every startup or for every stage of your company. But it is important to do your homework and be serious about acceleration if your startup wants to make it to the top of the applicant list. We want to help companies that want help!
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