With the funding, advice and contacts they possess, business growth accelerators could be the key to unlocking your start-up’s nascent potential. But most entrepreneurs have little or no idea what a business accelerator is – let alone how such a scheme can be utilised.
Here’s our quick guide to provide all the information you need...
What is a business growth accelerator, and where did the concept originate?
Essentially, the business growth accelerator model originated in America, where a number of seed accelerator programmes have sprouted over the last six years. Accelerators such as YCombinator and TechStars have ploughed money into promising start-ups, as well as offering advice and contacts, in return for an equity stake.
Many US accelerator programmes have also created ‘bootcamp’-style training programmes, where promising entrepreneurs are put through a gruelling programme of education and testing, to prepare them for the realities of business life and equip them with skills such as pitching and marketing.
The accelerator model first came to prominence in the UK in 2007, when Saul Klein and Reshma Sohoni set up Seedcamp in London. The Seedcamp model, which combines intensive coaching with seed funding and access to additional investors, has since given rise to similar business accelerators in other parts of the UK.
The early UK models owe much to their American predecessors. Indeed Jon Bradford, visionary behind the Springboard programme in Cambridge, says “I’ve studied the likes of Techstars, and essentially replicated that model in Britain.”
How many accelerators are there in the UK?
When it comes to the high-profile accelerator programmes which last weeks rather than days, and offer money to participating start-ups, there are three principal players: Seedcamp, Springboard and Oxygen, which has recently been established in Birmingham.
However, a network of intensive shorter-term courses is currently taking root all across the country. London-based company Pembridge has made such events a speciality, having organised short courses such as Fast Company 2 in Liverpool and the Growth Accelerator, which takes place in the West Midlands.
Furthermore, a number of higher education institutions, such as Thames Valley University, have begun offering their own accelerator-style programmes of coaching and mentoring for local start-ups and prospective entrepreneurs.
Success of the existing accelerators could lead to further expansion. For example Jon Bradford has hinted that, if Springboard proves successful, he may expand his programme into other UK cities, including Birmingham, in future years.
Who is behind them?
It varies. Some are incubator specialists whose careers are rooted in seed accelerators; Jon Bradford, who worked on Newcastle’s Difference Engine accelerator before moving to Springboard, is a prime example.
Others are wealthy individuals who have been drawn from the world of established business by a desire to spread their knowledge, and encourage British innovation. Perhaps the most prominent such figure is Mark Hales, a wealthy serial entrepreneur who has supplied the vision, and the money, for the Oxygen accelerator. He describes his motivation thus:
“I think there’s a great need for business accelerators. When I took over a small business back in 1999, the best advice I could get was from the Business Link guy, who’d never run a business in his life and wasn’t able to offer that much help. Any environment where you can bring a group of talented, experienced entrepreneurs together is a good thing.”
Is there funding available?
The major accelerators offer funding to those companies they deem sufficiently promising.
The money probably won’t make or break your business – for example, the Springboard accelerator programme offers each entrant up to £15,000 of investment capital, while Oxygen offers around £20,000 – but it could provide a crucial launchpad, if used wisely.
What sort of criteria must a company meet?
It depends. Each accelerator has a rigorous set of criteria; for example, to be considered for the Oxygen accelerator, the founders of the company will be asked a series of questions relating to existing milestones, investment to date and revenue generation, backed up with a short video from the founding members, explaining why they should be selected for the accelerator programme.
Judges will be looking for the strength of an idea, the quality of presentation, team dynamics and the extent to which a company will benefit from the accelerator.
Are the accelerators too focused on tech?
Although the primary focus is on tech, there is scope for companies in other sectors to be included, if they demonstrate sufficient potential.
Mark Hales, of Oxygen, said: “We really are going to the whole spectrum, it’s very much a portfolio approach. We’re not necessarily looking for the next big thing in tech, we’re looking at the whole spectrum from apps to social media, data analytics, retail, ecommerce – everything.”
The key UK players
Key events and services: Week-long learning event in London during September, when carefully selected start-ups receive coaching and networking opportunities. Also hosts ‘mini-Seedcamp’ events throughout the year in UK, Europe and the US.
Other events and services: Two-week trip for selected Seedcamp companies to the USA, providing advice and coaching. Also provides a ‘Demo Day’ where invested companies can showcase their work, and an ‘Investor Day’ where incubated companies meet external investors.
Funding available per start-up: €50,000 for any start-up which wins a Seedcamp event, in return for an 8-10% equity stake.
Mentoring network: 600-strong band of seed investors, serial entrepreneurs, product experts, HR and PR specialists, marketers, lawyers, recruiters, journalists and venture capitalists.
Target industries: Digital, tech.
How to apply: Visit http://apply.seedcamp.com/.
Key events and services: 13-week course of one-to-one mentoring and advice for selected companies.
Funding available per start-up: £5,000 per founder, to a maximum of £15,000.
Mentoring network: 100 mentors from various background and sectors.
Target industries: Various
How to apply: Springboard runs competitions for interested firms throughout the year. E-mail email@example.com for more details.
Based: Birmingham Science Park
Key events and services: A 13-week incubation programme for selected companies, including accommodation, mentoring, and specific coaching for pitches and business plan development. The programme culminates in an investor day.
Funding available per start-up: Up to £20,000 (although bear in mind this a loan, repayable once a sufficient level of investment or profitability has been reached).
Mentoring network: Tech entrepreneurs as well as legal and financial experts.
Target industries: Primarily tech, but scope for promising companies from other areas.
How to apply: Visit http://oxygenaccelerator.com/ for more information.