Growing global ventures by effective seed acceleration – The opportunities and barriers of business acceleration
by Balazs Szabo, Head of Business Development at InVendor Investment and Innovation on May 14, 2013
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Building a sustainable startup ecosystem is a key factor towards eliminating the market risks of seed funding as this is the stage where most companies fail. There are different models of seed ...
Building a sustainable startup ecosystem is a key factor towards eliminating the market risks of seed funding as this is the stage where most companies fail. There are different models of seed acceleration throughout the world in order to minimize the risks of seed investors that is a common bottleneck of growing global ventures. Business accelerator is a new approach of helping and funding startup companies at the seed stage.
Accelerators are organizations that provide cohorts of selected nascent ventures seed-investment, usually in exchange for equity, and limited-duration educational programming, including extensive mentorship and structured educational components. Instead of filtering out only one startup at a time these programs filter out cohorts and mentoring them in batches to make it more efficient and less risky. Business accelerators usually offer seed money and guidance for a small stake, usually between 4 and 10 percent, of the startup company. The main question of the research was: What are the key success factors of a business accelerator? How can we define success in case of the business accelerators? How do entrepreneurs select business accelerator programs? What are the expected outcomes of the accelerator programs by the founders, mentors, investors and by the participating startups? Is that possible to create a successful business accelerator outside of the major investment hubs? The hypothesis of the research was that the success of a business accelerator program is not determined by the geographical location and the local investment environment where it exists. Regarding the methodology in order to get primary inputs beside the secondary research I have conducted interviews with accelerators (Startup Sauna, Startup Wise Guys, Startup Highway) and a serial entrepreneur, blogger. I have also conducted an in depth survey with entrepreneurs including accelerator alumni and prospective applicants.
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