Pre-Accelerators: Unlocking & Funding The Billion-Dollar Idea
If you’re looking for things entrepreneurs lack, enthusiasm isn’t one of them. ‘Start’ is one of the most common words you’ll see in a start-up culture.
But, before you start building, you need to ensure you’ve got your thinking straight. Before you start seeking capital, you should attempt to monetize of value your offering. Before you can place a value on what you do, you need to ensure you’ve built something sound that addresses a need.
And, before you can do any of the above, you need to ensure that you, as an entrepreneur, have your head in the right place. Enter the world of pre-accelerators.
What’s the difference between a pre-accelerator and an accelerator?
A pre-accelerator can be likened to a group for an idea person with a box of napkins and a box of pens. You are pre-napkin. You are an enthusiastic, aspiring entrepreneur that knows you want to start a venture but are still formulating your ideas. A pre-accelerator can connect you to a powerful web of mentors and successful entrepreneurs (you may want to consider these people future investors.)
One of the largest pre-accelerators is Startup Next, a program of Techstars,supported in part by Google for Entrepreneurs. These programs enable you to work on yourself as a prospective entrepreneur, while you are working on the ideas that you ultimately hope to launch.
In contrast, accelerator programs focus on those who already have a napkin with an idea, a premise about a market or a partially developed model in some pre-seed state. Accelerators help you focus on the business model, commercialization considerations and rapidly getting yourself into the market with your venture.
An accelerator is similar to the story-telling, brand building & execution phase of marketing
As a professional marketer, I often work with people that get caught up in their invention or offering, and lose sight of the needs and desires of the customers. Done properly, marketing helps you crystalize the story of the customer’s advantage when exposed to or experiencing your product.
Accelerators work in much the same way, helping an entrepreneur that is already in some stage of development refine the best customer use case or business case.
A pre-accelerator more closely resembles the marketing strategy phase
A pre-accelerator offers a lot of freedom and space for creativity around markets. Free from the bounds of something you’ve already begun to build, you can explore markets and market needs. You can prioritize efforts that might address a larger or more compelling need.
And another critical thing a pre-accelerator can help you do, filled with seasoned entrepreneurs and strategists, is be honest about how unique your ideas are. There are long lines of people that believe they have unique, million-dollar ideas.
In 2015, Startup Pirates held the first international pre-acceleration summit in Porto, Portugal. The group did an informative white paper, available here on SlideShare, about the goals, challenges and working model of a pre-accelerator.
How does pre-acceleration improve your ability to raise or connect to capital?
These days, entrepreneurs seeking funding need to be more focused on billion-dollar ideas instead of those old-school million-dollar ideas.
The ‘billion dollar ideas’—unique, well-defined solutions for expanding or unlimited markets—are more likely to be funded quickly. These are also the ideas that strategic partners, co-founders and early employees will more likely flock to in order to get them off the ground.
A pre-accelerator can help expose you to the thousands of ideas, technologies and services already in development—or left on the cutting room floor of other accelerators—so that your energy is reserved for the truly unique or high-value venture. In advance of you spending 2 years developing something that investors already said no to 3 years ago.
Acceleration is proven to increase your access to capital
Accelerators seem like a good idea and provide amazing social benefit to growing entrepreneurs, but at the end of the day the goal is secure the funding to grow.
The Kauffman Foundation is one of the greatest go to sources for any entrepreneurial related statistics. In April of this year announced an exhaustivestudy of entrepreneurs that came out of accelerators. This study, done by theGlobal Accelerator Learning Initiative (GALI) demonstrated a broad range of benefits for both the entrepreneurs and the resulting ventures that emerged from an accelerator.
Where capital is concerned, the numbers were very telling. According to the GALI study, ‘businesses that went through an accelerator raised almost eight times the investment money than non-accelerated businesses.’
It will be interesting in a few years to see the numbers arising from pre-accelerators. If you’re hoping for an easier path to funding, and bigger multiples, it pays to prepare. And, in this case, pre-prepare.Share: