It can be a tricky task for startups to raise funding. According to the research conducted by CB insights, funding (or running out of funds) is the second reason why startups fail. Luckily, there are more emerging startup initiatives in Europe that aim to nurture more successful entrepreneurs on the continent. One of such initiatives is called a startup accelerator program.
What is a startup accelerator program?
A startup accelerator program is an intensive business and personal development program which supports a small team of founders, usually with a business idea of their own. The support comes in a form of mentorship, affordable office spaces and some starting capital. In a nutshell, a program consists of the following core elements:
An application process that is open to all, yet highly competitive.
A provision of pre-seed investment, normally in exchange for a single-digit equity.
A focus on small teams not individual founders.
Time-limited support comprising programmed events and intensive mentoring.
A final – “A demo day” – when startups pitch their ideas to raise first big funding.
At the same time, it is important to realise that startup accelerators are ultimately investment management companies. They look for the most promising companies at the very early stage and then invest into them. While they expecting companies to raise the next rounds of funding and ultimately (and hopefully) make an exit with companies’ acquisition or IPO.
Originally published on alphagamma.eu.