Startup Accelerator Structure: Everything You Need to Know
A startup accelerator structure is a program that helps startup companies during their early years by offering business training and guidance.3 min read
A startup accelerator structure is a program that helps startup companies during their early years by offering business training and guidance.
Startup accelerators provide startup businesses with financing, education, and mentorship to increase their chances of success. Accelerator programs are organized for cohorts of startup companies. Companies that enter the accelerator programs are subjected to a rapid, intense, and encompassing education designed to fast-track the lifecycle of innovative companies by teaching them in a few months what would have taken them years of trial and error to learn.
Features of an Accelerator Program
According to the University of Richmond's Susan Cohen and Rice University's Yael Hochberg, accelerators have four unique features:
- They are cohort-based.
- Emphasis is placed on mentorship.
- They have a fixed term.
- The program ends with a graduation or demo day.
These attributes are absent in other early-stage institutions, such as incubators, seed-stage venture capitalists, and angel investors. While accelerators also have the same purpose as other early-stage institutions, their approach, incentive structures, duration, education, intensity, and business model are different from the rest.
Accelerators in the United States
The first seed accelerator program in the United States was launched in 2005 by Y Combinator, a Silicon Valley company. The next year saw Boston-based TechStars launching the second accelerator in Boulder, Colorado. Over the years, both have grown to become the top accelerator programs in the world.
2008 was the year of accelerator programs in the U.S., similar to the unprecedented growth of venture investments, startups, and early-stage capital. Between 2008 and 2014, the U.S. accelerator industry grew at an average rate of 50 percent per year. From 2005 to 2015, there were 172 accelerator programs in the United States, culminating in investments in over 5,000 US startups.