Growing a business

10 Reasons Why Your Startup Needs a Venture Accelerator

Jared Bertrand

Jared Bertrand

Feb 5, 2020

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Sometimes, or rather, most times, you can't start a successful venture without the help of many people outside of your initial organization. It's challenging to find the skillsets and expertise to scale successfully in many situations because your business needs and weaknesses are so varied. That's where a venture accelerator comes in. Unless you've researched thoroughly into venture culture or started a new venture yourself, you may not even know what a venture accelerator is.

A venture accelerator is an organization of people with expertise in launching businesses that will help a select pool of ventures to develop and define their offerings. Oftentimes, venture accelerators provide the necessary support and consulting to create the framework for a successful launch post-program. Some accelerators offer their services in exchange for small equity stakes (usually 10% or less) in the business operation. Others will just accept some applicants in exchange for launching out of their accelerator or staying with the program for a predetermined length of time. There are countless reasons why your business could use an accelerator, but given that it might be tough for me to write a never-ending article, here are 10 of them:

1. Perspective, perspective, perspective
Adding perspective
Startups are small in their early stages. With limited funding and limited input, they don't typically have the liberty of pulling ideas from a diverse workforce or a seasoned marketing firm. They have a couple of founders and some essential workers because that's all they can afford. And that's where venture accelerators can really make a difference. Perspective is perhaps the most valuable trait your business can gain from doing such a program. That's because these programs are made up of experts in the business world who have seen and assisted in the successful launch of many businesses.
If there's an idea in your business model that doesn't work, they can spot it from a mile away. If there are steps to take to make an idea better, they have ample understanding of how to take those steps. For example, let's say your business aims to help people obtain a service that is usually expensive and complicated to arrange. There is value in that idea, but with some input from the venture accelerator, you may find two or even ten services that could all be offered on your platform in the same way. That way, a ten million dollar service offering could easily turn into a hundred million dollar service offering because of more market scalability. Doesn't sound too bad, huh?
2. Networking, the GREATEST networking
Business networking

The odds are you've probably heard about the importance of networking at some point. Good networking sets up many opportunities for your future, and it may even be the key to starting a business idea. And the networking process doesn't stop there. In the early stages of a business, who you network with could determine if your operation bleeds out or breaks out. What could be a better place to network than an organization of venture professionals and people driven by the same motivations as you? By joining a venture program, you will be surrounded by experts who have connections to the resources and people that can truly bolster your operations. You will gain access to investors either directly or through the impression you leave on them by attending the accelerator. Maybe you even find that your business should merge with another or complement another business idea. Either way, there is no better opportunity to meet the people who can help you become a success. I promise you won't find such a diversely skilled group of people anywhere else.

3. You learn hard lessons early, and that’s a good thing

"The instructor pulled up my website and said, 'So let me get this straight- your service is a website for helping people build websites- and your website sucks!?'. I was so mad that I stayed up for two days straight perfecting it." ~ Harry Fox, Co-founder of Bloks

Sometimes (more like every time), it can be embarrassing when we get called out on bad ideas or sub-par work. But most would prefer to take some early embarrassment over a catastrophic business failure from hidden flaws down the road. I got a first-hand account of such an encounter from Harry Fox, one of the founders of Bloks. Bloks is a startup that helps people build out their applications and websites without needing to understand coding. This past summer, Bloks took part in a venture accelerator, and yes, they learned some tough, embarrassing lessons.

"The instructor pulled up my website and said, 'So let me get this straight- your service is a website for helping people build websites- and your website sucks!?'. I was so mad that I stayed up for two days straight perfecting it", said Fox. In reality, even the most apparent issues or red flags can escape us. The beauty of accelerators is that you learn now as opposed to later when it can crumple everything you've built. After receiving that embarrassing criticism, Harry ended up with a beautiful site that anyone would be jealous of. So trust me, embarrassment is worth it; hard lessons are worth it. They provide an intense learning experience that we can benefit from in the end.

4. It’s consulting but better, because it’s free (or mostly free)
Free consulting

In the early stages of a business, every service and project you have to pay for slowly drains your minimal budget. One of the most expensive services you could hire for is consulting. There is untold value in the guidance of an experienced consultant, but that value comes at a high cost. Many startups cannot afford such services because they have to fund other crucial operations. That's where an accelerator comes in. A venture accelerator gives you access to free (or equity funded) diagnostics of your business model. It gives you market guidance and a solid plan to advance your business as efficiently as possible. It teaches you how to develop a minimum viable product and begin market testing. The consultation possibilities are endless, and that's reason enough to apply for an accelerator. It's a no-brainer to choose expert guides over blindly stumbling and hoping your business gets traction somehow.

5. It’s the business-scale version of an internship
Startup internship

Internships set people apart in the hiring process. Successfully completing an internship shows you can survive in the real world. It shows you can succeed in your area of study and produce results. And it provides you with an opportunity to learn best practices from your superiors. The same goes for businesses with venture accelerators under their belt. Investors, advisors, and other big names in the venture world know what goes into a venture program. It's impressive, and it definitely sets you apart from other businesses that are basically running blind-folded. While internships act as a test for your ability to perform tasks, accelerators act as a test to see if you really have successful business ideas. In the event that you don't, they allow you to fix those problems before your business launches in full swing. It's always nice to have some test runs before you get thrown to the wolves. So take that internship. Apply for that accelerator. People will notice when you do.

6. Some offer service budgets and even seed investment
Startup funding
Not all venture accelerators offer funding to participants, but many do. This funding may come in the form of a fixed budget for the best business ideas to pay for necessary services. It could also mean critical funding in the earliest round of funding, your seed round. And some of these investments are substantial. So if you're interested in potentially funding your business while in an accelerator, consider searching for opportunities where that is a possibility.
The good thing about searching for accelerators is that their terms and benefits are always explicitly listed on their sites. So you can know ahead of time if there are opportunities for securing organizational funding if you succeed in the program. If you're choosing between two accelerator programs, this would be an excellent way to choose too. It makes much more sense to take seed funding in exchange for equity as opposed to automatically giving up equity for attending the program with no funding in return. Sometimes this early investment is all your business needs to survive and scale for a year or two. These opportunities can be game-changers in giving your business life-saving money.
7. They know what comes next for your business
Bright busines future

So you've made a successful business model. Your minimum viable product has traction, and you believe scale is possible. What's next? How should we shift our focus now? Venture accelerators have seen the launch and scale process of countless businesses before. So they can tell you what steps you have to take to work towards the next milestone. They can advise you on entering the next stage of your market and capturing market space from competitors. The professionals within that space know where funding should best be allocated to increase scale effectively. They can put you in contact with the people, services, and plans necessary to reach the next stage of your business growth. Even though you've never seen that far ahead, they have. The future is always foggy for those who have yet to see it, so why not trust in someone who has?

8. Motivation and friendship
Accelerator friends
It takes a special kind of person to form a business idea, knowing in their heart that failure is a definite possibility. It takes a determination, an iron will, and a faith that few have. Accelerators give you a rare opportunity to surround yourself and your operation with people who hold the same conviction. And that can be uplifting, especially if you've never been around other people who are like you. They have experienced the joys and failures of starting a business just as you have. They work hard and aspire to make a name for their organization one day soon as much as you do.
In my time working in a venture accelerator as part of my college classes, I experienced this first-hand. Even though we did the work as part of a course, the results were real. The businesses were concrete, and all had the potential to become something big. We supported one another every day. We cheered for successes and gave constructive feedback on mistakes. It was easy to relate to one another because we all saw the potential of our work and the effort that went into the business-building process. Nothing motivates you quite like a business accelerator. And you may very well develop friendships for life.
9. Clients who have faith in you
Cutomer trust

There are two kinds of business models. Those are business to business (B2B) and business to consumer (B2C). Consider Uber. They operate under a B2C model, offering rides to consumers. Alternatively, a company like Sodexo provides services to businesses in areas like food service and facilities management. In either case, within an accelerator, you have a nice pool of potential clients who grow with your company and develop a trust in you by seeing your work regularly. If you have a B2B model, it's highly possible that you could be offering your services to your fellow accelerator businesses in the near future. If you're B2C, you might have a fantastic product that the other accelerator participants can't wait to get their hands on. Unlike the outside world, they have seen your business intimately and already trust in what you offer. Therefore you could have your first pool of clients just from participating in the program. It may not be enough to really scale your operation off the bat, but it could very well provide some useful market testing and cash injection.

10. No matter what, you will have access to something that other businesses do not
Key to business success

Sometimes you know what aspect of your business is missing. So you can choose to do an accelerator to get that help. More often than not, however, accelerators will enlighten you on issues and opportunities you had not even considered previously. If you chose to stay on your own path, you would have missed out on so many ways to improve your business. So instead of remaining mediocre, take a step in a new direction by joining an accelerator. The businesses that don't will be disadvantaged due to their decision to steer clear of the programs. They miss out on perspective and consulting. They miss out on potential investors and connections. If you can do it, it's hard to argue against the benefits to your business. As long as you are happy with the terms of participation, the sky's the limit in terms of how much a venture accelerator can help you. And if you still need to create a business before you apply to an accelerator, then here is the perfect place to start.

Bloks found some great accelerator opportunities to consider. Why not check them out below? Your future business will thank you.


Jared Bertrand
Bloks Staff

Jared Bertrand is a freelance writer from Covington, Louisiana. He has worked with several startups during his time attending Tulane University as well as post-graduation. He holds a Bachelor of Science in Management in Finance with a specialization in entrepreneurship. He writes on a wide range of subject matter from insightful startup content to his personal gardening blog.

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