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What do you think an accelerator is looking for in a start-up?
Hi everyone,
I am working on a startup as its digital marketer, it's growing fast and we do have a business plan, business model, and everything.
the thing is the start-up keeps rejected by accelerator all the time, and they say that your startup is not on our funding strategy.
The start-up is simply about throwing any party easily with a couple of clicks. everything will be delivered and designed in no time.
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Mr Ethar Alali
It totally varies. However, you have received feedback on your startup to tell you why you have been rejected and tbh, it seems pretty clear. Though you have to know how they work to understand why.
Each accelerator is different and they often think in aggregate, not in isolation. That way, they are basically divesting their portfolio much like they would divest financial risk if they were VCs or investors.
What this can mean is they take on a set of one particular technologies in line with their aims; take on a complementing set of services and/or adjacent offerings that support those aims and each other (in effect, creating a little microcosm of magnified activity around a particular vertical, which also makes it easier to fire-sale any failing companies to, or their assets) and get them working coherently as an investment and mentoring strategy.
We once got accepted into an accelerator for a new offering. They noted that our offering was extremely innovative and way ahead of its time. So it wouldn't likely be useful, but one of the panel has a more primitive entry-point that they could see growing into our offering after 10 to 20 years (that's just how slow their market moves, even when pressed like COVID).
So it sounds to me like you have not matched the accelerator's aims. I'd read the accelerator's documentation, look at the "winning" candidates and realign your pitch or your offering.
It also depends on the panel. When I invest, not that I do it often, or donate my time, I reject startup ideas based on maths or on what I can bring to them, not on founders or marketing. In general, if you can't do the maths, you're likely to be a liability, so I don't invest anything. The other thing I can't invest in, is if you can't prove you've sold (i.e. no traction). Because that's at least half the battle and it's also the bit I can't help you with. So it would leave a hole in the offering that would require more money to fill.
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Paul Graham has a few things to say about this here: http://paulgraham.com/ace.html
Is that any use? Do his comments reflect your experience in interviews?
This depends on what they are looking into.
You should politely asked them for more feedback. All accelerators are not same & it depends a lot on the space the accelerator is trying to cater.
The #1 thing accelerators and investors are looking for is traction.
Of course, there are other factors (team, market, etc.) but the ultimate goal is to serve customers and increasing adoption/engagement is an objective signal of demand.
Hello Mahdi, the first thing I would do is to ask for a honest and candid feedback from the accelerator representatives who is/are rejecting your application. Ask more questions about their strategy? Is there anything your team can do to fix this (and maybe apply in a later stage)? Or is the problem you're solving not a fit with their sector/value/strategy...?
It can be in an email but would be better if you manage to schedule a 15-30min call to discuss this :)
I don't believe, the problem is particular accel's strategy and that you don't fit in. You have to understand the simple fact: only 1% of startups actually receives venture funding. Accels and VC usually back up "hot" topics. For now, it's bitcoin, VR/AR, apps built with AI and ML. Sometimes, there's politics to define a choice. I personally know a guy, who raised $50K with the idea of a political social network, only because it had been 2 months prior to the election. Now he has a hard time raising for the same startup, though he's even made some progress.
I'm certainly not privy to the details of your venture. But, as far as I understand, it doesn't fall into one of "hot" categories. It might be a great service and there's a market for it, and you've already got 10k pre-launch subscribers. However, it might not be "accel-fundable type". And, as I've mentioned above, it happens more often than most of us tend to think. My point is, you might start thinking of other ways to raise cash. Can you get a loan? Is there a way to apply for a local grant? Are there SME support programs in your area? The idea is, to comprise a plan B to come up with the funds in case you don't get into an accel. If you can get enough to provide at least a 8-9 months runway, it might turn out you won't need venture money at all.
Anyway, good luck!