At SIERRA Ventures, we invest in Seed and A companies and tend to refer deals that are too early for us to our Pre-Seed and accelerator network.
Navigating the startup ecosystem can be overwhelming, especially when choosing if an accelerator is right for your startup. With myriad options available, each offering unique benefits, funding opportunities, and equity terms, finding the perfect fit for your startup's needs is crucial. In this post, we’ll explore some of the most popular accelerators and startup labs, including industry giants like Y Combinator and Techstars and specialized programs like Berkeley SkyDeck and PearX.
Whether you're looking for significant capital, expert mentorship, or access to a robust network of investors, this guide will help you make an informed decision by breaking down the funding provided, the equity required, and the additional perks each program offers.
1. What are the specific terms of the deal?
Equity and Funding: How much equity will the accelerator take, and what funding will they provide? Are there any hidden costs or additional requirements?
Valuation: How will the equity deal affect the startup’s valuation, and is it in line with market standards?
2. What is the program’s track record?
Success Stories: What are some examples of successful companies that have gone through the program? How has the accelerator contributed to their success?
Graduation Metrics: What percentage of companies that go through the program raise follow-on funding, achieve profitability, or reach significant milestones?
3. What is the quality of mentorship and network?
Mentors: Who are the mentors, and what is their expertise? How hands-on are they during the program?
Alumni Network: How active and supportive is the alumni network? Can the accelerator facilitate introductions to key industry players, investors, or customers?
4. What are the program’s specific offerings?
Curriculum: What does the curriculum cover? Does it align with your startup’s current stage and needs?
Resources: What resources, such as office space, software tools, or lab access, does the accelerator provide?
Support: How does the accelerator support startups post-program? Is there continued access to resources, mentorship, or networking events?
5. How much time and commitment is required?
Time Commitment: How intensive is the program? Will the time required interfere with the day-to-day operations of your startup?
Team Involvement: Does the program require all founders to be involved, or can one member of the team manage it?
6. What is the culture and community like?
Cultural Fit: Does the accelerator’s culture align with your startup’s values and working style?
Cohort Collaboration: How collaborative is the cohort? Are there opportunities to learn from and work with other startups in the program?
7. What are the expectations and deliverables?
Milestones: What milestones or KPIs will you be expected to meet during the program? Are these realistic given your current stage?
Demo Day: What is expected for the demo day, and how is it structured? How much support will you receive in preparing for it?
8. How will this impact my long-term strategy?
Long-Term Value: How will joining the accelerator affect your long-term strategy? Will the equity and connections gained outweigh the potential dilution or other costs?
Exit Strategy: How does the accelerator’s network and resources align with your potential exit strategy, whether through acquisition, IPO, or another route?
9. What is the reputation of the accelerator?
Reputation: What do past participants and industry professionals say about the accelerator? Are there any red flags or concerns raised by alumni?
Investor Perception: How do investors perceive the accelerator? Does participation increase your attractiveness to potential investors?
10. What is the legal and IP framework?
Intellectual Property: How does the accelerator handle IP issues? Are there any clauses that could affect your ownership or control of your technology?
Legal Support: Does the program provide legal advice or resources, and how are disputes typically handled?
This info is current as of August 2024
Y Combinator (YC)
Funding Provided: $500,000
Equity Taken: 7%
Additional Notes: YC provides $125,000 for 7% equity and an extra $375,000 in an uncapped SAFE with a Most Favored Nation (MFN) clause.
Techstars
Funding Provided: $120,000
Equity Taken: 6-9%
Additional Notes: Techstars provides $20,000 in funding in exchange for 6% equity and offers an optional $100,000 convertible note.
PearX by Pear VC
Funding Provided: $250k-$2m
Equity Taken: 10%
Additional Notes: PearX is a startup program by Pear VC.
Forum Ventures
Funding Provided: $100,000
Equity Taken: 7%
Additional Notes: Forum Ventures focuses on B2B SaaS startups and offers mentorship and networking opportunities.
500 Global (formerly 500 Startups)
Funding Provided: $150,000
Equity Taken: 6%
LAUNCH Accelerator
Funding Provided: $100,000
Equity Taken: 6%
Additional Notes: The ideal stage for our Accelerator is pre-Series A with some traction
AngelPad
Funding Provided: $120,000
Equity Taken: 7%
Additional Notes: AngelPad is known for its hands-on approach, with a strong focus on product-market fit. Program based in NYC and San Francisco. Strictly VC called them the “Anti-Y Combinator“
MassChallenge
Funding Provided: Up to $500,000 (equity-free)
Equity Taken: 0%
Additional Notes: MassChallenge offers equity-free funding and focuses on supporting early-stage startups through mentorship and networking.
Plug and Play Tech Center
Funding Provided: Varies (usually $25,000-$500,000)
Equity Taken: 1-5%
Additional Notes: Plug and Play offers sector-specific accelerators and a large corporate partner network.
SOSV
Funding Provided: $250,000 to $500,000
Equity Taken: 7-10%
Additional Notes: SOSV is a global venture capital firm that operates several accelerator programs, including HAX (hardware), IndieBio (biotech), Chinaccelerator (cross-border internet), and MOX (mobile).
Berkeley SkyDeck
Funding Provided: Up to $200,000
Equity Taken: 5%
Additional Notes: Berkeley SkyDeck is a startup accelerator affiliated with UC Berkeley. It offers up to $200,000 in funding, mentorship from a network of UC Berkeley alumni and faculty, and access to a global investor network.
Antler US
Funding Provided: up to $500,000
Equity Taken: $200k for 8%, $300k follow on
Additional Notes: US offices in Boulder, Austin, and NYC. Relocation stipends are available for those relocating for the 6-week residency. Industry agnostic and founders can apply anywhere from pre-idea to early revenue.