Some of the most celebrated startup success stories that have emerged and inspired in recent years include names such as Dropbox, Airbnb and Reddit.
But what do all these relatively young companies have in common? Each started out in Y-Combinator’s tech accelerator programme that gave them the cash-infused nudge and workspace they needed to realise the full potential of their ideas.
With more than half of all startups imploding two to five years after inception, accelerator and incubator programs provide young startups and willing investors with a medium to combine what they have to offer each other.
Modelled on the success of Y-Combinator, startup accelerators are continuing to spring up on this side of the Atlantic with more than 100 programmes open for applications across Europe.
Startup founders may have struggled to find seed funding in a place like London a few years back, but the influx of these programmes have brought with them a swell of investors and mentors to the capital. Already home to the cab hailing service Hailo, song identifier Shazam and social chat platform Badoo, the ever-growing list represents what a vast and emergent startup ecosystem there is in Europe.
What exactly is a tech accelerator?
A tech accelerator is actually a fairly simple premise: at one end you put a load of talented people or teams who have an idea for a company, a little bit of money in return for equity in the company (seed funding), provide some mentoring from people who have been there and done it before, give them some office space and leave it all to stew for about three months. They are often a much better bet than going it alone, you will not get fleeced on renting a tiny office space and they offer a serendipitous environment – you may just bump into your ideal startup partner and come up with the next big idea.
How do I join an accelerator?
Typically a new company that has two or three partners or employees will apply online to join one of these programmes. However, due to their increasing popularity (and the fact there is quite a lot of money involved), only the best ideas will get picked.
Seed funding? Tell me more
Like all businesses, startups need cash. Whether it is to hire a great, new developer, create a prototype of their world-beating product, or simply to pay for their lunches. Investors who have been hand-picked by these programmes will offer up tens of thousands of pounds for a stake of about 5% to 10% in the company getting the cash. Quite often the initial investment will be followed up with more funding to help them on their way, unless the company is acquired.
What do mentoring schemes involve?
Mentoring schemes are almost always provided alongside seed investment at these programmes and they help to steer your idea on to the right path. They are run by mentors who can come from almost any background. They could be someone high up from a tech company like Google or Facebook; they could be a venture capitalist with a track record in investing in successful startups; they may even be running their own startup themselves, or a combination of all three.
When you are accepted on to a programme, you will be thrown into a three-month whirlwind of growth, opportunities and potential problems. Mentoring schemes often last the duration of your time at a tech accelerator, with the first few weeks more intensively focused on training you in areas you need help in. After the programme ends and you “graduate”, you should be left on the path of a gradual climb to becoming a viable business or at least able to go ahead and convince further investors to work with you.
Where do I sign?
You first need a great idea and then to do some research to find out which programme is best for you. Programs such as the US-based Y-Combinator and TechStars boast an application acceptance rate of between 1% and 3%, but we have put together a list of some of the best tech accelerators in Europe.
Manchester
London
Pearson Catalyst for Education
Other UK & Ireland
dotforge Sheffield
DCU Ryan Academy’s Propeller Venture Accelerator Ireland
Rest of Europe
Axel Springer Plug & Play Germany
Black Forest Accelerator Germany
German Silicon Valley Accelerator Germany
ProSiebenSat.1 Accelerator Germany
Tetuan Valley and SeedRocket Spain
