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Accelerating Success: A Study of Seed Accelerators

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A presentation of our bachelor thesis conducted at Chalmers University of Technology on the subject of accelerators. Learn more at acceleratorstudy.com.

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Accelerating Success: A Study of Seed Accelerators

  1. 1. Accelerating Success A Study of Seed Accelerators and Their Defining Characteristics May 15th, 2012 - Gothenburg, SwedenAccelerating Success - Intro - acceleratorstudy.com
  2. 2. Dropbox - an Accelerated Success • Participated in Y Combinator in 2007 • Now valued at over $5 billionAccelerating Success - Intro - acceleratorstudy.com
  3. 3. Outline of Presentation • Background to thesis and accelerators • Research question • Method and research design • Case studies of accelerators • Findings from research – Stakeholder Perspective – Organization Perspective – Process Perspective • ConclusionAccelerating Success - Intro - acceleratorstudy.com
  4. 4. Why Study Accelerators? • Explore a new phenomena – little has been written about accelerators • Chalmers Innovation, our stakeholder, interested in the accelerator modelAccelerating Success - Background - acceleratorstudy.com
  5. 5. Chalmers Innovation • A business incubator and seed fund in Gothenburg, started in 1999 • Picking up new trends from Silicon Valley, Lean Startup and accelerators • Startup Spring Camp 2012 • Interest in further developing their activities related to early-stage software startupsAccelerating Success - Background - acceleratorstudy.com
  6. 6. Software Startups in the Past • Boo.com – an internet clothing retailer • Burnt over $125 million of venture capital in 18 months • 8 offices and over 400 employees • Launched in 18 countries simultaneously in November 1999, bankrupt in May 2000Accelerating Success - Background - acceleratorstudy.com
  7. 7. Incubators – the Predecessor of Accelerators • First incubator established in 1959 • Provides basic necessities for operating, such as office space and administrative aid • In some cases also provides access to advisors and investorsAccelerating Success - Background - acceleratorstudy.com
  8. 8. New Methodologies Customer Development Lean StartupAccelerating Success - Background - acceleratorstudy.com
  9. 9. Decreasing Costs for Starting New Ventures • Cloud services enable instant scalability • Open source software provides cheap ready-made solutions • The huge venture capital investments not necessary at the early stage anymoreAccelerating Success - Background - acceleratorstudy.com
  10. 10. The First Accelerator: Y Combinator • Founded in 2005 in Silicon Valley • Today over 200 different accelerators world- wideAccelerating Success - Background - acceleratorstudy.com
  11. 11. Characteristics of an Accelerator from Startup Factories • An application process that is open yet highly competitive. • Provision of pre-seed investment, usually in exchange for equity. • A focus on small teams not individuals. • Time-limited support comprising programmed events and intensive mentoring. • Startups supported in cohort batches or ‘classes’.Accelerating Success - Background - acceleratorstudy.com
  12. 12. Research Question What defines a seed accelerator and which aspects are useful for Chalmers Innovation?Accelerating Success - Research Question - acceleratorstudy.com
  13. 13. Method Used for Thesis • Roadmap created using secondary information from articles and blogs • Built theory from case studies on accelerators in Europe and the US • Collected material was used to form the analysis consisting of three perspectivesAccelerating Success - Method - acceleratorstudy.com
  14. 14. Iterative Method UsedAccelerating Success - Method - acceleratorstudy.com
  15. 15. Case Studies of Accelerators • American: Y Combinator and TechStars, data collected from secondary sources • European: The German Silicon Valley Accelerator, Springboard, Startupbootcamp, Nordic Startups, betaFACTORY and Startup Sauna, data collected from interviewsAccelerating Success - Case Studies - acceleratorstudy.com
  16. 16. Y Combinator and TechStars • Two of the first accelerators, now defining the standard of an accelerator Founded in 2005 Founded in 2007 Mountain View, California (Silicon Boulder, Colorado Valley) 6% equity 2-10% equity 6 000-18 000 USD funding 11 000 – 20 000 USD funding 9-12 teams in each batch 65 teams in last batchAccelerating Success - Case Studies - acceleratorstudy.com
  17. 17. European Accelerators Founded in 2012 Founded in 2009 Founded in 2010 Berlin, Germany Cambridge, UK Copenhagen, Denmark No equity 6% equity 8% equity No seed funding £5 000 - £15 000 funding 15 000 € funding 6 teams in each batch 10 teams in each batch 10 teams in each batch Founded in 2011 Founded in 2011 Founded in 2010 Stockholm, Sweden Oslo, Norway Helsinki, Finland Not operational 6-8% equity No equity 5000 – 15 000 € funding 1500 € funding 5 teams in first batch 15 teams in each batchAccelerating Success - Case Studies - acceleratorstudy.com
  18. 18. Analysis of Accelerators • The collected data was analyzed and common themes in the accelerators was triangulated • These were summed up in three perspectives – Stakeholder – Organizational – ProcessAccelerating Success - Analysis - acceleratorstudy.com
  19. 19. Stakeholder Perspective • Startups: contact with mentors and investors, quality assurance • Investors: due diligence, deal flow • Mentors: pay-it-forward, keeping up-to-date, meet with interesting people • Society: innovative environment, job creationAccelerating Success - Analysis - acceleratorstudy.com
  20. 20. Stakeholder PyramidAccelerating Success - Analysis - acceleratorstudy.com
  21. 21. Organizational Perspective • Few employees in the organization • Mentors work for free • Business model differs, often equity-based with private investors but sometimes government or universitiesAccelerating Success - Analysis - acceleratorstudy.com
  22. 22. Process PerspectiveAccelerating Success - Analysis - acceleratorstudy.com
  23. 23. Conclusion Reached in Thesis • An accelerator act as a hub, connecting the three main stakeholders: mentors, investors and startups. • The accelerator organization consists of a few employees that run the day-to-day operations and facilitate the interaction between the stakeholders. Mentors do not receive monetary compensation from the accelerator. • The processes in an accelerator can be divided into five distinct phases; awareness, application, program, Demo day and post Demo day. • The accelerator accept teams based on the composition of the teams rather than their idea. • The teams in an accelerator are small consisting of two or three people and the team is at an early stage that require intensive mentoring and iteration of their idea. • An accelerator can be seen as a service provided to investorsAccelerating Success - Conclusion - acceleratorstudy.com
  24. 24. Thank you! Download a copy at www.acceleratorstudy.comAccelerating Success - The End - acceleratorstudy.com

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