Over the last few months, all founders have been forced to take a critical look at their companies and create a survival plan. The best founders have not only created a short-term survival plan, but are also thinking about how they can leverage the current environment to thrive long-term. If you are a founder of an early-stage startup, this could be a great time to find targeted support to drive your business forward while others are simply waiting for the return to “normal” that may never come.
When we founded Nex Cubed in 2016, we went against the norm and decided to base our accelerator on a virtual model. Our goal was to partner with the best founders and add real value, regardless of location. Four years later, the virtual model has worked out well for us and our 70+ portfolio companies who preferred to use their cash and time building their businesses versus temporarily relocating to a new city. If you are thinking of joining a virtual accelerator, here are some things to consider as you compare various programs.
Research and Application Process
Given the new world we live in, look for an accelerator that has experience running a virtual program. Is the accelerator suddenly trying to figure out how to make their in-person program remote, or have they been supporting startups virtually all along?
1: Application Process – A well-run accelerator will have a well-run application process. Is the application process clearly outlined (with information on various rounds, decision timeline, etc.) or does it seem ad hoc? Do you have access to accelerator leadership to ask questions and get comfortable with the program specifics? Are investment terms and benefits clearly defined early on and is there room for negotiation?
2: Track Record – An accelerator’s success is judged by the success of their investments. Ask for case studies that highlight exactly how the accelerator helped portfolio companies. In addition, reference checks take time but are well worth the effort. You can ask accelerator leadership for references, typically after you get an offer, but expect that those will all be favorable. Research the accelerator portfolio and pick a few startups who perhaps have not raised follow-on rounds since graduating and reach out directly to get additional feedback from these founders. The ones who have had to navigate ups and downs will have valuable insights into the strength of the accelerator’s network and ability to help.
3: Acceptance Rate – Giving up equity in your startup is a big decision. You don’t view your startup as “average” so why would you join a program who accepts almost anyone? The ability for an accelerator to be selective is a sign they have a reputation for adding value and delivering on promises. During the interview process, ask about the source of most of their investments (inbound, referral, outbound) and the acceptance rate. Also ask about yield, or percentage of startups that accept the accelerator’s offer.
Startups are best positioned to take full advantage of an accelerator program if they have a very clear understanding of their priorities and goals prior to joining. Work backward from your ideal outcome and figure out if the accelerator you’re considering can make a significant impact on your goals.
4: Customization – There are plenty of accelerators whose main value proposition is temporary, free office space, access to mentors, and regularly scheduled talks by service providers. These programs are usually “one-size fits all” with little room to tailor content to specific needs. Look for a program that offers a bespoke experience and network that aligns with your priorities. Do you get a dedicated advisor and defined deliverables? Will they be accomplishing real work or just advising from a high-level? Are the advisors simply volunteers or are they properly incentivized to add real value (i.e. are they paid)?
5: Goal tracking and accountability – An accelerator focused on accomplishing real work will start off by digging deep to define specific priorities and deliverables for the program. Each week there should be regular check-ins and KPI tracking to ensure the team is staying on track and to make adjustments where needed. It’s common for teams to reprioritize during the program given market feedback, but it’s still important to understand where you’re pivoting from and how the change will affect overall trajectory.
6: Communication – Remote accelerators don’t have the benefit of ongoing face-to-face time. Have a clear understanding of how and when you will interface with the network. Is there flexibility when scheduling meetings or are you assigned a time slot and expected to adjust your schedule? What tools are used to ensure a seamless, virtual experience? Is the contact often enough to foster a sense of community and trust, while leaving time for you to continue driving your business forward?
7: Alumni Program – What happens post-program? Are you on your own while the accelerator focuses on their next batch of startups? Ask how alumni stay involved with the network and whether you will have continued access to the accelerator team, mentors, investors, and events. Some specific benefits to ask about include office hours for alumni, ongoing access to the network and investors, and opportunities to continue learning through curated programming.
8: Ongoing Support – This can take the form of advisory services or capital. If you want the option of ongoing, tailored business support, look for a program that can plug you into a formal advisory network. It’s rare to find accelerators that have the ability to follow-on themselves or are associated with a venture capital firm, but they do exist. These firms usually have strong connections to the VC community given they invest alongside other funds.
Although these are uncertain times, founders should feel confident that the supportive community that existed before COVID-19 is alive and well. You have many resources at your disposal to help navigate through the crisis. It is up to you to choose wisely and ensure you are set up to not only survive, but thrive.
Kelsey Morgan Pasqualichio is a Co-Founder and Chief Growth Officer at Nex Cubed.