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
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.