As you may have heard me talk about in the last few weeks I joined Dorm, an online platform that provides you with education, a community, and mentorship to help you start a business.
Such programs are not free, you usually have to pay a premium to receive their services.
What if there were programs that paid YOU to start a business instead of you paying them?
“Wait, are you telling me that there are programs that actually pay you to start a business?”
And I’m not taking about government grants, I’m taking about an actual monthly income!
Can you imagine what that would mean?
Rather than having to work to make money while you work on your business on the side, you could work on your business full time instead, not having to work about paying your bills!
That is the topic for this week’s blog: Start-Up Accelerators.
I talk about what an accelerator is, the pros/cons of accelerators, and some of the best ones in the UK, and whether I think they are worth applying for.
What is an ‘Accelerator’?
An accelerator is basically an in person, digital, or hybrid program that is made for entrepreneurs that are at any stage in their startup: from idea to already generating revenue.
These accelerators exist all around the world. In fact, some of the biggest accelerators run their programs in multiple cities all around the world.
These accelerators run ‘cohorts’ all throughout the year, from twice a year to more. The way it works is that you apply to join one of these cohorts in your nearest city.
If you apply before the cohort deadline and get accepted, then great you are in. If you apply before the deadline and don’t get accepted, you have to wait to try again for the next cohort.
Accelerators don’t last very long, they usually last in the range of 3 – 6 months.
Most accelerators expect you to have a validated business idea already where you are looking to receive the mentorship, education, and funding you need to scale it to the next level.
There are some accelerators that don’t require you to have an idea already, but they are rare.
The beauty of accelerators is that you don’t have to pay to join them, they usually pay you!
That’s right, once you get accepted onto a cohort, for the first couple of months they pay you ‘stipend’ that allows you to work on your business full time, without having to pay it back.
This stipend could be anywhere from £2000-£3000/month, which is basically a month’s pay.
After these first few months of the accelerator, you can then apply for funding from investors.
The Pros/Cons of Accelerators
There are many pros to joining an accelerator:
As I mentioned, for the first few months (usually 3) they pay you to work on your business.
I’m not just taking about a couple of hundred pounds like a PHD student, I’m talking about more than enough to pay your bills and sustain your lifestyle.
As well as that, you no longer have to work on your business on the side: evenings/weekends.
You can actually quit your job and dedicate your full attention on growing your own business, as opposed to someone else’s.
However, as with anything, there are also cons to joining an accelerator:
Because these programs only last a couple of months, they can be quite intense and stressful.
Also, they are very competitive, it is very unlikely that you will get accepted on your first try.
After the initial few months of payment, you then have to apply for funding from investors.
If you impress the investors and secure funding, you will have money for the next few months.
However this funding comes at a cost, usually anywhere from 5-10% equity in your business.
If you don’t secure funding, then you’re stuck: either you seek other investors to fund your business, go back and get a job, or hope that your business is already making money for you!
The Best Accelerators in the UK
There are some really good accelerators in the UK.
My favourite accelerator is Entrepreneur First. EF is what first introduced me to accelerators.
What I like about EF is that you don’t need to have an idea, their choose you on your potential.
They help you find a partner and together you come up with an idea based on your strengths.
However, EF is very competitive to join, and they only run two cohorts a year. So if you don’t get accepted the first time, you wait to wait another 6 months before you can apply again.
Another great accelerator is Founders Factory. This would be your traditional accelerator.
Unlike EF, they don’t just accept you based on your potential but on your actual business idea.
They support you for a few months and pay you in exchange for a percentage of your startup.
They have different programs depending on what stage you are at with your business.
Finally another one is the Young Innovators Awards, a public funded program for young people (18-30 year olds). Unlike private accelerators, this is more of a part time program.
The program lasts for a whole year but they only pay for 2 days a week, which means you’ll probably need to work part time in a job while working on your business to make ends meet.
Final Thoughts
Having heard about accelerators, the pros/cons, and some of the best ones, the question is:
“Are they worth applying to?”
For me, the answer is yes!
Starting a business isn’t easy, it takes a lot of time I would say more than money to get started.
As such, you really need to dedicate as much of your time as possible to get it off the ground.
That’s why accelerators are great, they pay you to work on your business full time.
However these programs are hard to get into, it’ll take you a few tries before being accepted.
So don’t plan on quitting your job until you have been accepted.
You’ll also have to be comfortable with giving away a percentage of your startup to investors.
That means that’s you will no longer be keeping all the profits, but distributing it to others.
As long as you are ok with that, expecting to be making a lot of money anyway, then apply.
I’ve applied to accelerators: I’ve been rejected by some and waiting to hear back from others.
All I know is once I get accepted, this will be the biggest boost to my entrepreneurial journey!
I hope you guys have enjoyed learning about accelerators and have found this blog useful.
If you have questions, please ask. If you have any experience with accelerators, please share!
