Maybe it’s destiny, but I just read an insightful article in The New York Times about entrepreneurship that highlighted research from my alma mater.
Most tech start-up founders who have successfully raised venture capital have much less unusual résumés, according to data analysis by researchers at the University of California, Berkeley, Haas School of Business. The average founder is 38, with a master’s degree and 16 years of work experience.
Yet if someone like that came to a top venture capitalist’s office, he or she could very well be turned away. Start-up investors often accept pitches only from people they know, and rely heavily on gut feelings, intuition and what’s worked before. “I can be tricked by anyone who looks like Mark Zuckerberg,” Paul Graham, co-founder of the seed investor Y Combinator, once said.
Well shit be damned! I’m 38, have a Master’s degree from Haas School of Business, and have 16 years of work experience. I’ve also built a sustainable lifestyle business for the past six years that is organically growing with high profit margins. Maybe, I’ve actually got some credibility to start a new VC-backed business after all.
BELIEVING IS HALF THE BATTLE
Before getting bumped up to USTA 5.0 level tennis last year, I never thought I belonged. My serve and backhand sucked, and my knee injury was slowing me down. But after going 3-3 this season, when I hoped to win just one match, suddenly my serve and backhand are more powerful because I finally believe! The knee pain is still there, but I soldier on.
When you don’t believe in yourself, it’s terrifying to face opponents who can embarrass you with a double bagel beat down (0-0). But if you can some how flip the mental switch, I’m sure all of us who TRY will surprise ourselves in some way.
The same concept goes for starting a business. We don’t try because we don’t believe we have the credentials. I don’t “look” like the typical VC-backed Silicon Valley founder. Hence, I question my own beliefs. Having a diverse group of people in any ecosystem can help inspire more people to try.
For a little while, I decided I would not pursue the path of spending the next 5-10 years killing myself to build a big business. Instead, I would continue maintaining a lifestyle business because it’s so much easier since the momentum is already there. Financial Samurai has lasted for the past six years because it’s fun! I write to express, connect, and learn. Growing this site’s traffic and revenue is not a focal point, but a nice side benefit. To turn FS into a money making machine would bum me out because this site is so personal.
But I realize things don’t have to be all or nothing. My biggest fear was messing up a good thing already with Financial Samurai. Instead, why not continue writing on Financial Samurai and incorporate a new business idea instead? Financial Samurai can be a great testing platform to get the product to fit the market. Readers can also go on the entrepreneurial ride with me as I promise to make it entertaining.
The one thing that drives entrepreneurship is the realization that something cannot be left not done. Based on my experiences in the finance industry and as an oft injured athlete, the world could sure use two products, a financial app and a piece of athletic hardware, I’ve come up with.
I’m looking for support from incubators / accelerators to help me get these products to market. Those of you who find this article through search may be looking for the same thing. There are so many minefields to navigate in the startup world. Why not try and enlist help from those who’ve already been there?
But given most startups fail, and most VC-backed startups also fail, I’ve come up with a logical entrepreneurship progression:
If I cannot convince an accelerator, incubator, or VC to back my company, then the chances of failure are even greater. If one can’t even get a B in biology class, it’s probably not a good idea to dedicate the next 10+ years of one’s life to be a doctor. We’ve got to strive but also face reality as well.
Harsh! But belief has to be mixed in with reality. Step one for me and for you is to apply to enough fellowships, incubators, and accelerators so that one of them may actually take you in. The financial support will be nice. However, it’s really the guidance on how to bring the product to market that is most important.
LIST OF ACCELERATORS, INCUBATORS, FELLOWSHIP PROGRAMS
When I was in college, I became envious of my then girlfriend who won a $10,000 scholarship to study abroad in China. As someone who could speak Mandarin much better than her due to living in Taipei for four years as a kid and having Mandarin-speaking parents, I wondered why I couldn’t get a study abroad scholarship myself.
The obvious reason why was because I never bothered to apply! What a dumbass. After coming to my senses, I applied for a small $500 scholarship from William & Mary’s Charles Reeves International Center. After going through an interview, I was rejected. Pissed, I went back and lobbied my case until they finally said yes.
Lesson learned: don’t take ‘no’ for an answer!
There is a plethora of fellowships, incubators, and accelerators to apply to in order to receive funding and guidance. Here are some of the most popular I’ve researched for my own entrepreneurial journey.
General Accelerators / Incubators
* Y Combinator – The most popular startup accelerator that has produced companies like AirBnB and DropBox. They invest $120,000 in each company for a ~20% stake. Three month program that ends with a demo day of your actual product.
* TechStars – Techstars provides $118,000 in seed funding, intensive mentorship, and an amazing network of mentors and alumni for 7-10% equity in your company.
* 500 Startups – Four-month accelerator program in Mountain View, San Francisco, and Mexico City; has invested in over 1,000 startups.
* AngelPad: AngelPad offers the complete opposite in the same area by investing larger amounts of money in fewer startups over a longer period of time in order to provide a more intensive and tailored mentorship incubation program to the startups that they take under their wing.
* Startupbootcamp – Startupbootcamp’s accelerator programs have one key focus – to connect startups with the most relevant mentors, investors and partners from around the world. They do this through an intensive three-month program that’s been fine tuned since 2010 to efficiently tap into the largest international network of over 400 alumni founders, top corporate partners, and investors spanning all stages of growth. All programs culminate with up to a 1000 attendee investor Demo Day celebrating the progress that’s been made and preparing for future scale.
* Matter: Their 5 month program kicks off with an intensive bootcamp focused on building scalable media ventures with a human-centered, prototype-driven design process. Next, share-outs, weekly speakers, and monthly design reviews build up to a demo day in SF and a media showcase in NYC. They invest $50,000 in their companies.
* Founders Space: An incubator + accelerator looking beyond just tech. Comprehensive program taught by entrepreneurs who’ve done it all. Community of founders who are passionate about helping one another. Free co-working space to collaborate with your cohorts during the program. Network of top advisors, growth hackers, lawyers, angels & marketing pros. Access to our mentoring sessions and workshops for 12 months. Optionality on receiving cash or equity.
* Advance Technology Development Center (ATDC) – Georgia Tech Fintech incubator for Georgians. ATDC’s 150 graduates have collectively raised more than $2 billion in capital. In 2014, Signature and Graduate companies merited $50+ million in capital. Nationally, 90% of technology startups fail. More than 90% of the ATDC’s Signature graduates are successful five years after their graduation.
Financial Technology (FinTech) Accelerators
* Barclays Accelerator – A 13-week accelerator program out of New York and London. Partnership with TechStars. Barclays is one of the largest banks in the world.
* Bright Bridge Ventures – Fintech incubator. Funding of £1 – £10m for each company will be provided by their anchor investor, Blenheim Chalcot, and selected co-investment partners including QED Investors.
* Coin Apex – NYC based tech incubator now specializing in the Bitcoin space.
* FinLeap – Fintech focused. They provide you with 0.5 – 5 million euro in seed funding and access to their financial network, which includes Angels and Industry Investors. They value smaller investments with higher stakes for the founding teams.
* FinTech Circle – Angel program primarily focused on fintech companies out of the UK.
* FinTech Innovation Labs – 12-week mentorship program in Hong Kong, New York, and London.
* FinTech Sandbox – Boston based incubator that offers startups free access to data feeds and APIs from providers such as Thomson Reuters and Xignite.
* New York Angels – They lead deals ranging from $100,000–$1.0 million. Invested over $100 million in more than 100 venture companies.
* Yodlee Interactive Incubator Program –Ynext Incubator is a 6-month program for developers, innovators, and entrepreneurs to launch disruptive products that leverage transactional financial data. 12 months of free access to the Yodlee platform. Note: Congrats to Yodlee for getting acquired by Envestnet for $18.88/share on 8/10/2015!
* PlugnPlay Accelerator – Plug and Play FinTech provides funding, mentorship and acceleration to startups and first-time entrepreneurs to help them bring to market the next disruptive solution for the growing worldwide economy. Over a 12-week period, the accelerator program will accept 20-30 startups in each of two classes in its 2015 inaugural program. The stage-agnostic accelerator is seeking applications from startups focused on mobile payments and banking, as well as security and authentication.
* QC FinTech – Three-month accelerator bootcamp in Charlotte. Charlotte is the second largest financial capital in the US. It has ten’s of thousands of folks serving in the financial services industry that provides a collection of knowledge and talent anywhere outside of the top 5 cities in the World.
* Rockstart – They’ve got a digital health accelerator, web & mobile accelerator, and a smart energy accelerator based in Amsterdam.
* Six Thirty – SixThirty is different from most accelerators because they maintain a healthy balance of helpful programming and networking opportunities. SixThirty invests in fintech companies with working products, so the type of value-added discussions we seek to have are based around the typical issues for companies at this stage, which involve sales, marketing, hiring, and fundraising.
* Upwest Labs: A Silicon Valley-based seed fund that looks to invest in and partner with Israeli startups that are targeting the US market. To date, UpWest Labs portfolio startups have raised more than $100M in funding with an average seed round of over $1M per company; Over 70% of the startups have raised follow-on funding, with a few of them acquired by the likes of Google and Priceline.
Fellowships (No Equity Exchange)
* Y Combinator Fellowship – $12,000 fellowship, no equity exchange, 10 week program down in Mountain View to help early stage startup founders grow their ideas.
* Lightspeed Venture Fellowships: Each selected team will receive $5,000 per team and $10,000 per team member, mentoring by one of Lightspeed’s investment professionals, as well as office space in Menlo Park, CA throughout the summer. No equity is exchanged, and there’s no obligation to accept money from Lightspeed.
Hardware Accelerators
* Lemnos Labs: Accelerator to help develop hardware startup companies. Invests up to $250,000 for a 25% stake. Lemnos Labs has $70 million in backing, and offices in Singapore, Scotland, and San Francisco.
* Hax Accelerator: Started in 2012 with nine startups, and is incubating 80 companies in 2015. It has a 3.5 month program, most of which is in Shenzhen! This is brilliant for hardware startups and those who want to live abroad and learn Mandarin. I’m definitely applying here.
* Highway1: Hardware accelerator owned by PCH, an Irish design and manufacturing company.
LOTS TO CHOOSE FROM
After reading this post, there’s no excuse not to apply to as many accelerators as possible to support your idea. If you have an average 5% chance of getting accepted, you’ll have to apply to 15-20 accelerators / fellowships to finally get in. Good thing there’s plenty out there.
We must accept the fact there’s only a tiny chance of creating a great big company. But if we can focus on trying to succeed at the first step, which is putting together a pitch to get into an accelerator, then we give ourselves a greater chance for success. Big wins are simply a cumulation of small wins along an unknown journey.
If I get rejected from everywhere, then I’ll just fall back on iterating Financial Samurai to be the best possible personal finance site possible. The worst is regretting having never tried.
Readers, any successful accelerator, incubator, or fellowship applicants out there? Anybody successfully get awarded a fellowship or get into an accelerator? How was the experience? What happened with the company you built? What differentiated the winners to the losers?
If you get rejected from every single accelerator/fellowship out there, do you think you should still give your business idea a go?
Know of any other accelerators or fellowship programs for entrepreneurs? I’ll happily add them.
Regards,
Sam