Entrepreneurs · Entrepreneurship

Are accelerator programs and incubators over-hyped?

Mike Mason Student at Strayer University

September 19th, 2016

I really don‘t understand why I should give up 5 to 10% of my company when I have a network that I can tap into in order to create a solid advisory board and a good board of directors. What is the real purpose of this programs? I find too much noise around these initiatives...


Joseph Wang Chief Science Officer at Bitquant Research Laboratories

September 27th, 2016

Here in Hong Kong people have been tweaking the accelerator/incubator model.  The first iteration had a VC company try to set up an incubator in exchange for equity, but that didn't work since there are too few companies in HK to support this, and the other thing is that it turns out that the people that start companies in HK often have some level of finance background and are likely to say no to a bad deal.

The second iteration had the incubators sponsored by corporates which were supposed to provide startups with mentorship in exchange for equity.  This model turned out not to work very well because it turns out that people that work for big corporates really have little to offer startups on the form of mentorship.  What the startups really need is not mentorship and advice but actual paying customers.

We are now in iteration three in which the accelerators and incubators are starting to be used just as a mechanism to vet startups that might have useful models and tech that would be useful to a big corporate.  Instead of a six month program, the new model involves a one month program or in some situations a two-day hackathon.  The corporates are no longer asking for equity and are charging a nominal fee.  The other model which is working is one in which startups from all over Asia are invited to work in HK for a few months.  In this situation, the goal is less of acceleration and incubation but to have people from over Asia meet each other and connect in HK, and to pull talent and funding into HK.

So the Accelerator and Incubator 1.0 clearly didn't work in HK, but people have been evolving the model, and things are vastly improving.

Rod Abbamonte Co Founder at STARTREK / @startupHunter / @startupWay / @CoFounderFound / @GOcapital / @startupClub / @lastminute

September 20th, 2016

One of the most important challenge of any entrepreneur is take a decision and negotiate based on that. Each entrepreneur needs to decide if an acceleration and management company who bring experience, knowledge and investment is necessary or not and negotiate an equity share that make sense for both side. 

Rob Adams Advisory Board Member at PhotoPad For Business

September 19th, 2016

Most accelerators exist to jump start pre-seed companies and get them to an investable state.  The percentage of equity required covers the substantial risk inherent in such early stage companies.   The small amount of cash normally offered is usually backed with marketing, design, and legal services.  Office space is usually included.  Accelerators normally also have an investor network and provide a demo day to show off in front of said network.   

If you have all this already, can bootstrap it or fund it yourself, then by all means please do.  But for *many* startups, an accelerator can be invaluable. 

Galina Ozgur GM at Grand Central Tech

September 20th, 2016

It's a choice. If you have a brilliant network and can build a killer advisory board  - more power to you. My experience says, that alone does not a company make. Accelerators - if they are good programs - will help founders avoid mistakes which I guarantee are made on a daily basis by companies on both coasts. How? Through advice, mentorship, educational components of programming, a thoughtful approach to your company's operational challenges, a close look at your metrics, performance against these metrics, etc etc. In addition, accelerators give you business development opportunities, partnership opportunities, more connections, access to VC/ angel money resources, advice around fundraising and company management. The list goes on. Most importantly - they give you momentum and a community.The former is something to be built upon and not taken lightly; the latter - provided you were engaged and participating - is something that stays with you and supports you for a long time. GCT has founders that have had exits before and they still choose an accelerator program to build their new business because sitting side by side with smart people is always a preference.The reason folks argue about the value add of programs is because they aren't created equal and there's a lot of confusion and misrepresentation of the term. There is a difference between an accelerator, incubator, coworking/ collaborative space. There is a difference among all the programs offerings and how well they are built. In the long run, YOU as a founder have a job to do due diligence on these programs and find out what their strongest points are. 

Suryanarayanan A Head, Incubator consulting services at Bhiveworkspace

September 19th, 2016

Accelerators and incubators offer credibility in many cases as investors customers and other stake holders find comfort in dealing with a curated start up. They also offer excellent eco system which helps the start leapfrog to the next level. The trick is to choose the correct incubator/accelerator 

Irwin Stein Very experienced (40 years) corporate,securities and real estate attorney.

September 19th, 2016

If you don't need it, don't buy it. The real purpose varies. Some are designed to help younger entrepreneurs who need the help. Some are designed to give the accelerator backers access to good potential investments that come along. 

Sarah Browne Brand & Futures Strategist | Startup Advisor | Award-winning Writer | Consumer Insights/Connector

September 27th, 2016

Incubators can be crucial to evolving industries such as today's booming Cannabis Revolution. To innovate in cannabis, a startup would be smart to go to a cannabis-specific business accelerator. Cannabis entrepreneurs have some very unique and often daunting challenges, from legal issues to financial to branding to hiring. An incubator such as Gateway (Oakland) delivers the killer combo: founders (Ben Larson and Carter Laren) who have deep startup knowledge and an extensive network in the SF Bay Area + serious expertise in the cannabis field. Gateway's first cohort just demo'd at last week's jam-packed ELEVATE event at the Oakland Museum. True networking nirvana. Keep an eye out for Octavia Wellness, Kamala Edibles, AskWillow, and Growroom. And a new cohort is starting soon. Check gtwy.co for info. 

Martin Omansky Independent Venture Capital & Private Equity Professional

September 20th, 2016

Some incubators or accelerators provide valuable services to start-ups, especially to those that are first-timers. But, as always the case, let the buyer beware! Sent from my iPhone

Ema Chuku Product Developer. Founder.

September 20th, 2016

The startup industry is itself overhyped and experiencing too much noise so shouldn't be a surprise there's with everything associated with it.

That said, just like picking products, there's always the wrong ones amongst the great ones.

Just have to do your research to pick the right ones.

Josh McCormack Securing funding for my pre revenue startup app in recruiting space.

September 20th, 2016

Incubators sound great. An environment where I'd get help, feedback and access.