What’s Broken with Current Accelerators and how Private Accelerators can Solve them
Denis Shatalin
Founder of SaaS Camp
Of the 1%-3% of startups that actually get accepted by a traditional accelerator, many ultimately report dissatisfaction at the lack of help or real mentoring they received when compared to the amount of equity they had to give up.
Private Accelerators like Saas Camp turn the traditional accelerator model on its head.
Instead of the startup committing their valuable equity upfront and hoping for the best, in a private accelerator they get a complete, bespoke mentoring program for a set fee before equity even enters the chat.
Private Accelerators like Saas Camp turn the traditional accelerator model on its head.
Instead of the startup committing their valuable equity upfront and hoping for the best, in a private accelerator they get a complete, bespoke mentoring program for a set fee before equity even enters the chat.
What is an Accelerator?
An early-stage accelerator will provide funding, coaching, networking, and other guidance in exchange for equity in your company. Their job is to get you to market and help grow and scale your business.
On the face of it, this seems like a fair exchange. Giving up a piece of your business to massively increase its chances of success looks like a no-brainer.
But what if the accelerator doesn’t deliver? You’ve already given up the equity come what may… and let’s be brutally honest here - many traditional accelerators don’t care about the vast majority of startups they invest in.
These are extremely well-funded entities that are looking for unicorns. In their eyes, it doesn’t matter if 99% of their startups fail, just so long as there is an Uber or an AirBnB in that remaining 1%.
On the face of it, this seems like a fair exchange. Giving up a piece of your business to massively increase its chances of success looks like a no-brainer.
But what if the accelerator doesn’t deliver? You’ve already given up the equity come what may… and let’s be brutally honest here - many traditional accelerators don’t care about the vast majority of startups they invest in.
These are extremely well-funded entities that are looking for unicorns. In their eyes, it doesn’t matter if 99% of their startups fail, just so long as there is an Uber or an AirBnB in that remaining 1%.
Benefits of Accelerator Programs
i. Structured Support
Knowing how your SaaS company can benefit other organizations is one thing. Knowing the best way to run your SaaS business is another thing altogether.
A good accelerator program should provide you with structured support in every area of your business including marketing, business development, and customer success as well as help to define your go-to-market strategy and optimize your business plan.
ii. Grow Your Network
A key benefit of a good accelerator is expanding your network of peers and potential business partners, alongside potential clients.
A good accelerator will provide an environment conducive to information exchange with people who can potentially add value to your company’s future prospects.
iii. Accelerated Growth
The clue is in the name! An accelerator worth its salt will get your business on track, ensuring you hit your KPIs, growth, and revenue projections, and all other business goals faster than if you’d gone it alone.
Knowing how your SaaS company can benefit other organizations is one thing. Knowing the best way to run your SaaS business is another thing altogether.
A good accelerator program should provide you with structured support in every area of your business including marketing, business development, and customer success as well as help to define your go-to-market strategy and optimize your business plan.
ii. Grow Your Network
A key benefit of a good accelerator is expanding your network of peers and potential business partners, alongside potential clients.
A good accelerator will provide an environment conducive to information exchange with people who can potentially add value to your company’s future prospects.
iii. Accelerated Growth
The clue is in the name! An accelerator worth its salt will get your business on track, ensuring you hit your KPIs, growth, and revenue projections, and all other business goals faster than if you’d gone it alone.
The Problem with Traditional Accelerator Programs
High Upfront Cost with No Guarantees
A typical accelerator takes first and gives back later (if at all). Take, for example, the standard deal from Y Combinator, perhaps the most famous accelerator of all:
$500K investment in 2 SAFEs. $125K for 7% equity (safe 1), $375K for future equity in later funding rounds with a Most Favoured Nation Clause (MFN safe).
In addition to this, the Y Combinator standard deal entitles them to purchase an additional 4% stake in the business in further funding rounds at the lowest possible market cap valuation.
By the end of this process, you could have given up a significant percentage of your business at a much lower valuation than it might have otherwise secured. Was what you got out of this accelerator worth that much of your company?
Overpopulation
One of the biggest problems with traditional start-up accelerators is the ratio of founders/entrepreneurs to mentors.
A typical accelerator could have hundreds of founders and only a handful of mentors and industry experts to service them.
With time available for consultation with the assigned mentors already limited, this often results in many mentees missing out on receiving any real expertise or professional guidance altogether.
A typical accelerator takes first and gives back later (if at all). Take, for example, the standard deal from Y Combinator, perhaps the most famous accelerator of all:
$500K investment in 2 SAFEs. $125K for 7% equity (safe 1), $375K for future equity in later funding rounds with a Most Favoured Nation Clause (MFN safe).
In addition to this, the Y Combinator standard deal entitles them to purchase an additional 4% stake in the business in further funding rounds at the lowest possible market cap valuation.
By the end of this process, you could have given up a significant percentage of your business at a much lower valuation than it might have otherwise secured. Was what you got out of this accelerator worth that much of your company?
Overpopulation
One of the biggest problems with traditional start-up accelerators is the ratio of founders/entrepreneurs to mentors.
A typical accelerator could have hundreds of founders and only a handful of mentors and industry experts to service them.
With time available for consultation with the assigned mentors already limited, this often results in many mentees missing out on receiving any real expertise or professional guidance altogether.
How Private Accelerators Fix these Problems
1: Equity Comes Later
With a private startup accelerator, you pay a set fee upfront to cover your ongoing tutoring and mentorship without sacrificing any equity. Only once the accelerator has “earned its stripes” will it incorporate equity into a continued, ongoing partnership agreement.
2: More Tailored Support
The key value in private startup accelerators comes from their bespoke, personalized offerings and the additional resources they afford.
Instead of being one of the hundreds of entrepreneurs desperately struggling to get a few minutes with a mentor who may not even have the right expertise to help your business, in a private accelerator, you are the sole point of focus for an entire team of industry professionals whose sole purpose is to make your business succeed.
3: Industry-Specific Focus
By focusing on a single industry or sector, private accelerators can deliver exactly what their entrepreneurs need by assuring they have the in-house knowledge and access to expertise that allow their clients to thrive.
With a private startup accelerator, you pay a set fee upfront to cover your ongoing tutoring and mentorship without sacrificing any equity. Only once the accelerator has “earned its stripes” will it incorporate equity into a continued, ongoing partnership agreement.
2: More Tailored Support
The key value in private startup accelerators comes from their bespoke, personalized offerings and the additional resources they afford.
Instead of being one of the hundreds of entrepreneurs desperately struggling to get a few minutes with a mentor who may not even have the right expertise to help your business, in a private accelerator, you are the sole point of focus for an entire team of industry professionals whose sole purpose is to make your business succeed.
3: Industry-Specific Focus
By focusing on a single industry or sector, private accelerators can deliver exactly what their entrepreneurs need by assuring they have the in-house knowledge and access to expertise that allow their clients to thrive.
Conclusion
Current accelerators can and do work for some businesses, but the traditional model often fails new startups.
Private startup accelerators provide an affordable, low-risk, personalized alternative that is more tailored to your individual needs and provides ongoing support and assistance when you need them most.
If you are looking for a private accelerator who can help launch your SaaS startup why not take a look at what we are doing as SaaS Camp?
I have helped SaaS founders 3x monthly recurring revenues within 3 weeks. If you want to book an initial consultation or preliminary go-to-market strategy consultation simply click here.
Private startup accelerators provide an affordable, low-risk, personalized alternative that is more tailored to your individual needs and provides ongoing support and assistance when you need them most.
If you are looking for a private accelerator who can help launch your SaaS startup why not take a look at what we are doing as SaaS Camp?
I have helped SaaS founders 3x monthly recurring revenues within 3 weeks. If you want to book an initial consultation or preliminary go-to-market strategy consultation simply click here.
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