You may think that entrepreneurs participate in startup accelerators to receive seed money, or to have a place to do their work. Although these are popular reasons, they are not the only ones (nor are they the most compelling). Below are 10 arguments for entrepreneurs joining accelerators, such as i360accelerator, which opened in Dubai last year.
1. Future Capital
One of the most important reasons entrepreneurs join accelerators is to make connections with potential investors who can provide capital to operate the new business after the accelerator program ends. Many accelerators work closely with sponsors and private investors, and some even provide a valuation of the new business that helps investors see its potential.
Many people who participate in accelerators are starting their first company and, if they’re smart, will want to avoid the mistakes that new companies often make. Accelerators offer an opportunity to learn from experienced entrepreneurs, such as the founders, guest speakers, and mentors that offer their guidance and support.
Starting a business is hard work, and it’s easy to get discouraged if you’re all alone. Accelerators enable entrepreneurs to support and encourage each other. Plus, a recent study showed that people are generally more creative when they are in an environment with a moderate noise level.
4. Product Feedback
When an entrepreneur enters an accelerator, usually their idea is still a work in progress. This is the time to gather feedback on their product or service to improve it and make it innovative. Accelerators assist with this through mentorship, market research and even feedback from the other startups in residence.
5. Business Education
Every new business faces common issues as the company grows. Many accelerators arrange guest speakers to help participants anticipate and overcome the challenges associated with hiring, additional funding, go-to-market strategy and more.
Once a business is launched, processes and people need to be in place to ensure things run smoothly (you never get a second chance to make a first impression). Accelerators offer entrepreneurs a chance to find and get to know their team, to ensure the right people are on board before the big day.
7. Financial Support
Even if a startup team is willing to work for free, every new business needs money for operating expenses, not to mention marketing and distribution or support costs. Accelerators typically offer a small amount of capital to the entrepreneur, in exchange for a share of equity in the resulting business.
Entrepreneurs and their teams need a place to work, brainstorm and meet potential team members or investors. Accelerators offer a professional environment (as opposed to someone’s house or a coffee shop) in which to do this, as well as computers, printers, copiers and other office equipment that entrepreneurs may not be able to afford to buy on their own.
9. Company Registration
Paperwork is a necessary part of starting a business, but it can be a time-consuming and confusing task (especially in the UAE). Many accelerators retain legal staff to help entrepreneurs complete the documents required to register their new business, apply for patents and copyrights, review property leases, etc.
For participants who are accepted to well-known accelerators, simply graduating from the program adds authenticity and relevance to their new business. (Of course, this is a two-way street – successful entrepreneurs enhance the reputation of the accelerator, as well!)
At i360accelerator, which is organized and managed by the Innovation 360 team, our goal is to meet every one of the above criteria by offering innovative entrepreneurs access to the best Innovation Accelerator in the Middle East. We link entrepreneurs to investors for seed funding and future capital, and provide a creative and inspirational place to refine startup ideas and build strong teams. We recruit regional mentors and business people to educate and guide our participants, and provide training on innovation to give our graduates the extra insight they need to succeed. Our hope is that every i360accelerator graduate will become the next Middle East entrepreneurial success story!
Why would you join an accelerator? Leave a comment and let us know.
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Debra Jennings is Director of Storytelling for Innovation 360. She is an innovation tools expert and a contributing author to “The Innovator’s Toolkit: 50+ Techniques for Predictable and Sustainable Growth.”