This is a guest post from MassChallenge.
Financial challenges are among the most concerning hurdles when it comes to starting up your own business, but there are a variety of methods available to help fund your project regardless of how niche you might think it is. Be it kickstarting your project with crowdsourced funds or taking out a loan, getting the funds needed is more accessible than you might think.
The real challenge comes in figuring out how much money you need, what you’ll do with those funds and also dealing with industry-specific challenges that could bring down your business and ultimately waste your funds.
This is where startup accelerator programs can help you. Not only do they provide funding to kickstart your ideas, but they also ensure that you are well-informed with the help of mentors, advisors and a network of other founders to potentially form mutually beneficial partnerships with. In this article, we’re going to help you understanding startup accelerator programs and why they’re essential to a healthy startup ecosystem.
Accelerators Usually Offer Financial Investment
One of the most common functions of a startup accelerator is to offer funding. In fact an average of $20,000 to $50,000 is offered during accelerator programs in the US. This lump sum can go towards anything related to the business from marketing needs to production.
However, not every accelerator offers funding. Instead, they double-down on the advice and mentoring which can help get your business off the ground and utilize existing funds more effectively. While most accelerators require an equity stake, some offer zero equity funding. This is often because those accelerators exist for the sake of stimulating the local economy and might not offer as much in terms of mentoring and advice or will come with restrictions.
Accelerators Aren’t a One-Off Helping Hand
Every startup accelerator program is offered for a different length of time. The average program duration lasts for roughly 3 months and during the entire period, you’ll be offered mentoring, advice and other forms of assistance to ensure the success of your startup. This is one of the main things that separates accelerator programs from typical funding options.
If you’re looking for more than just a simple injection of cash from an investor and would appreciate the industry advice and assistance offered by trained and experienced professionals, then an accelerator program is the ideal option to choose for growing your startup ideas into a fully-fledged business.
Accelerators Differ From Program to Program
Another important thing to consider is that accelerators will differ from program to program. Some accelerators are more suited towards manufacturing while others are targeted at gaming and cybersecurity. The type of accelerator you contact will have a huge impact on the resources, advice and mentoring you have available to you, so make sure you consider your options before sending in your application form to a specific accelerator.
Accelerators often look for revolutionary ideas that can completely change the market once the product or service reaches a usable state. In order to appeal to accelerators, it’s important that you consider their individual specialities so that you can make use of their resources and also impress them on their own turf.
If you want to learn more about the application process or the possibilities a startup accelerator program offers, the infographic below provides some helpful details.