A two-time accelerator vet and startup CEO asks questions you’ll want to answer before making your next move.
By Lorraine Sanders (Contributing Writer, Women 2.0)
Before you can decide whether it’s time to submit an application to your top choice tech accelerator program, there’s something you really need to know: your company. Take it from Bow & Drape CEO and Founder Aubrie Pagano.
Since beginning work on Bow & Drape, an ecommerce fashion brand that lets shoppers customize garment details and has been making headlines this week with the launch of a new 3D printed accessories collection created in collaboration with Shapeways, Pagano has considered multiple accelerators and become a part of two programs at two very different stages in the life of her startup. In the early days of her company, Pagano participated in Mass Challenge, an annual competition and accelerator program that gave her structure and a tangible goal as she launched a Kickstarter campaign that was eventually funded to the tune of more than $30,000.
After getting Bow & Drape up and running last fall, Pagano had no plans to join another accelerator, but that all changed when she met Enrico Beltramini of FT Accelerator, a Silicon Valley program specifically focused on fashion technology companies.
"We thought we could learn a great deal from him," Pagano says of her New York-based team.
With that, Bow & Drape became the latest company to join Beltramini’s niche program, which also counts startups Combatant Gentlemen and StyleYou in its ranks.
"Whoever is running the accelerator, believing a lot in them is really important because, at the end of the day, it’s about the people that are the resources," says Pagano.
Along with putting a great deal of stock in the people behind an accelerator program, Pagano has many more words of wisdom to share on choosing the right technology accelerator program at the right time. Read on for her thoughts on finding the perfect match, making initial contact with the program and why you may want to bypass a program in favor of going it alone.
Tell us one thing you now know about joining an accelerator that you wish you'd known at the beginning of your entrepreneurial journey.
Trust your instincts and rely on common sense to make your judgment. There is no secret formula to choosing the right accelerator for you, if at all. I also want to stress that “if at all.” There has been a lot of buzz around accelerators, but you can build a company, secure investment and create an incredible advisory network without an accelerator.
There are a lot of accelerators out there, and they function in all different kinds of ways. Any advice for first-time founders that will help them figure out if a program is a good match?
I think there are a couple parameters across which to assess a good accelerator match:
- Your company’s stage: Different accelerators have different "sweet spots" - some are focused on gathering the right team and then getting that team to develop a great idea. Others are focused on results and progress and so are looking for revenues and traction. No matter where your company is, make sure you understand where you are and how it aligns to the program(s) you are looking to join. If you are misaligned here, I guarantee you will not get all that you want out of the opportunity (or will be rejected before even getting that chance).
- Your desired level of oversight: To me, this is the most critical question a founder needs to ask. Do I want someone looking under the hood of my company and telling me what I am doing wrong? Do I want to engage new advisors and listen to feedback? Do I want to make substantive changes to the way I am doing business? The degree and vigor to which you say yes to these questions should dictate what kind of accelerator you should look for (if at all). Certain accelerators have an extreme amount of oversight and involvement; others are more hands off. Figure out what your comfort level is first and then understand how each accelerator you are considering aligns to it.
- The accelerator’s expertise: Not all accelerators are created equal. Yes, duh. But often, the strength of the accelerator lies in the leadership and the leadership’s networks. So do your homework. Understand the strength and experiences of the leaders and advisors of the accelerator and see how well they align to where you want to take your company. If you are a fashion company (cough cough) and the head of the accelerator has had a long career in B2B telephonic softwares (as did their network of friends and advisors), then it may not be the right accelerator for you.
- Your desired outcomes: This is a big one. Where do you want to be at the end of the accelerator? Do you want to nail a seed round? Do you want to launch a Kickstarter? Do you want to show $100K in sales? Your answer should be indicative of the accelerator you choose. Every accelerator has a different carrot. Some specialize in getting all their companies funded on demo day. Others offer no-strings-attached cash prizes for pitching. Some offer nothing but the glory of your own accomplishment. Knowing your desired outcome will help you gauge the accelerator for you.
- Your willingness to potentially forfeit equity: Just a consideration. For helping you, many accelerators take a sizable chunk of equity out of your company. This is not a big issue if you align on the first four parameters, but remember equity binds someone to you. So if you think the people in charge of the accelerator are real jerks, think long and hard about whether you want them to have a piece of your company. Oppositely, this can be a real blessing because it incentivizes greater and ongoing advisor-ship and advocacy from the people who have helped you most.
- Location: Last but not least, accelerators are popping up everywhere. I met someone in Vegas with an accelerator in Kansas City (who knew?!). So before you commit to a location, think about how it affects the network you want to build. If you are looking to make inroads with Nordstrom and Amazon on a new e-com checkout software, then TechStars Seattle is right for you; if you are starting a fashion brand, then Kansas City may not be the right place for you.
There are a lot of reasons to join a tech accelerator. Can you offer up any reasons NOT to join?
As I mentioned above, if you do not see value these parameters then an accelerator may not be right for you (which is totally okay - most successful companies are started without the help of an accelerator). Be honest with yourself. That is the most important thing: Are we at the right stage for an accelerator? Are we too early, just an idea? Are we missing a key team member? Are we too far along? Do I want someone digging into my business and telling me what to do? Again, it is totally OK if you say "heck no." I specifically did not want an accelerator that was going to wipe away the research and progress we had made. Are we at a place where I could use additional guidance? Is this going to be a distraction? Can I commit to the time it will take away from "running the business?" Will I be better off at the end?
For the first-time founder who wants to join an accelerator, what advice do you have about making contact with the program for the first time? Any best practice ideas?
Absolutely. Two points here. I recommend that first, entrepreneurs do their homework by talking to companies that have successfully completed the accelerator in question. Get a good introduction and take them to coffee (offer to pay, please!). The best litmus test for an accelerator is going to be the recommendation of companies who went through the process. Be open to listening and ask the tough questions: Did you get out of it what you wanted? What was the advisory / leadership team like? What did your day look like during the accelerator and what does it look like now? You will hopefully get honest answers and you may even get a recommendation from that company out of it (often accelerators look to previous companies for recommendations on new startups). Also, don’t forget to write your thank you email.
Second, get a good introduction to the accelerator (that is, if you’d like to speak with the people running it, which I would recommend, especially if they are taking equity in your company). Who introduces you (and this goes for anyone, really) is the most important part. If the introduction comes from a service provider that met the head of the accelerator in question at a free drinks tech meetup one night, it’s probably not the best introduction you can get. If, however, the introduction comes from a trusted and well-respected source, human nature says that your inquiry will be more readily answered. So once you have landed the intro, put your best foot forward, ask the tough questions you need to (and please have good questions; their time is as valuable as yours, so do not ask to "pick their brain" about the accelerator. Do your homework, read their website in totality and really get down to the meat of it, and apply as early as possible. Often applications are reviewed on a rolling basis, so the sooner you apply, the more you could potentially stand out and impress them.
My only other best practice advice is to be true to your business. Once you make it to the stage where you and the accelerator are assessing each other, be sure to not only highlight the wonderful things about your company (which we all know and love) but also front-run their questions by being candid about the challenges you are facing or questions you have. This is valuable for them not only understanding your business in totality, but also building confidence in you as an entrepreneur that you are thinking around the corner. And though you may not have all the answers yet, you are on the path to finding them.
Have you been through an accelerator? What advice would you give founders who are considering applying to one?
About the blogger: Lorraine Sanders is a journalist, blogger and media consultant. She is the author of the San Francisco Chronicle Style Bytes column and writes regularly for FastCompany.com and others. She is founder of the blog Digital Style Digest and an inhabitant of the San Francisco Writers Grotto. Connect with her on Twitter @digitalstyledig or @lorrainesanders.