To Accelerate or Not to Accelerate?

Accelerators come in all shapes and sizes: a ranch-style house in Silicon Valley, a formal program with fancy hotel rooms, professional coaches or, most commonly, co-working spaces with mentorship programs that provide small amounts of cash to build your business. Accelerators are not for everyone, and you should make sure the one you’re considering is a good fit before you join.

Do You Want to Give Equity?

In many accelerator programs today, you must decide if you want to give equity in your business to the accelerator in exchange for some amount of cash, mentorship or support. They typically help you with your legal documents and other basic components of getting things going. The advice you receive may or may not be worth the equity you’re giving up, and often times, good marketing on the accelerators’ part is enough to lure you in. Other accelerators provide value just by your participation: groups like 500 Startups are likely to give you immediate attention and potential funding just because you were accepted. Lastly, there’s accelerators who have domain expertise in your field or area and are designed to help accelerate you down the milestone you have set out to achieve.

Is Now the Right Time?

The second decision you will have to make is whether or not an accelerator makes sense for your business at the stage it is at right now. Some businesses are better off waiting, joining a program designed for seed-stage businesses as opposed to ones just founded. That’s all dependent on what you want them to do, and having clarity of what your business’s needs, what you don’t know and need help with is therefore critical.

The most important variable to keep in mind is, if your business fails, the stock someone owned in it is worthless anyway. Often in the beginnings of a business — particularly for a first time founding team — the challenges may be so daunting that solid support is worth the equity cost of getting it. So when the time comes to decide to accelerate or not, remove the equity question from your mind, as a smaller portion of the pie is still better than all of a pie that’s worth nothing.


About the Author:

Mark Pittman Mark Pittman is the founder/CEO at Blyncsy, a location analytics company headquartered in Salt Lake City, and a graduate of the University of Utah. Mark holds undergraduate degrees in political science, economics and international studies as well as masters of international affairs and global enterprise, masters of business administration and a juris doctorate.

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