Accelerators, Incubators, etc.
Get out of the Garage…
This presentation is made possible by the support of the American People through the United States Agency
for International Development (USAID). The contents of this presentation are the sole responsibility of Rick
Rasmussen and do not necessarily reflect the views of USAID or the United States Government.
• You’re on your own
• Little help
• Figuring it out…
Google’s first office
Now: Lots of help
• An idea Hire a team Build and grow
• Prototype: Idealab, Bill Gross, Pasadena CA, 1996.
– Come up with business ideas then recruit outsiders to bring
it to life.
– “Those ideas can gestate for much longer periods of time
and the incubator takes a much larger amount of equity”.
• Overall goal: Develop a startup economy in a
country, region, city or neighborhood
– Government funded, typically under resourced
– May have a top-down sector focus
– May have a relationship with a local university
• Typically don’t take equity, may have a “pay-back
• Generally ineffective as government and entrepreneurs
have different agendas and different levels of energy.
• A means of meeting a variety of economic and
socioeconomic policy needs:
Creating jobs and wealth
Fostering a community's entrepreneurial climate
Diversifying local economies
Building or accelerating growth of local industry clusters
Business creation and retention
Encouraging women or minority entrepreneurship
Identifying potential spin-in or spin-out business opportunities
• Identified need, sponsored by DFAIT
– Silicon Valley goes to Canada
– Education and judging
• Short-term programs
– 48 Hours in the Valley
• Canadian Technology Accelerators (CTA)
– Soft Landing for 3-6 months
Canadian model results
• 120 companies over 3 years
• No companies moved
• Over 20% set up local development offices
• Survey after 2 years
– Average employment increased by 3x
– Average revenue increased by 10x
• A venture model
• Formal process to review, fund and assist chosen
startups with a fixed program.
• See accelerators support the startups with
funding, training, mentoring and events for a specific
period (typically 3 months) in exchange for equity
• Early seed accelerator include
– Y Combinator, Silicon Valley 2005
– TechStars, Boulder CO, 2006
– Seedcamp, London, 2007
• Over 250 seed accelerators in
US, Europe, Asia, Latin America
• The business model is based on generating venture-style
returns, not on rent or fees for services.
• Seed accelerators do not necessarily need to include a
physical space, but many do.
• The process that startups go through in the accelerator
can be separated into five distinct phases:
post demo day.
Accelerator process - Application
• Startups accepted in cohort batches.
– Recognition of being chosen to be part of the accelerator.
– Peer support and feedback that the classes provide is an
– Mentoring, connections
• Highly competitive.
– Y Combinator and TechStars have application acceptance
rates of 1% to 3%
Accelerator Process - Implementation
– A seed investment in the startups is usually made in
exchange for equity. Typical investment is $25,000.
– During this time, they receive intensive mentoring and
training, and they are expected to iterate rapidly.
• Demo Day
– Startups "graduate”, typically after 3 months.
– the startups present to investors
• Post Demo Day
Boulder, plus six other
Philadelphia, New York, Israel
• San Francisco:
– AngelPad, Greenstar , Pivotal Labs, Kicklabs, i/o
Ventures, The Alchemist
Accelerator, PARISOMA, Matter, Runway, Digital
Garage, Sandbox Suites
• Silicon Valley
– Y Combinator, Upwest Labs, Founder’s
Institute, Innospring, Vodafone Xone, 500 Startups, Startup
• East Bay
– Techliminal, Hackerspaces
• Support the development of research and technology
parks in their dedication to startup and early-stage
• Research and technology parks, on the other hand, tend
to be large-scale projects that house everything from
corporate, government or university labs to very small
• Most research and technology parks do not offer business
assistance services, which are the hallmark of a business
incubation program. However, many research and
technology parks house incubation programs.
Most common incubator services:
Help with business basics
High-speed Internet access
Help with accounting/financial management
Access to bank loans, loan funds and guarantee programs
Help with presentation skills
Links to higher education resources
Links to strategic partners
Access to angel investors or venture capital
Comprehensive business training programs
Advisory boards and mentors
Management team identification
Help with business etiquette
Technology commercialization assistance
Help with regulatory compliance
Intellectual property management
• For-profit models with investment upside
• Rely on various sources of income
• Support startups as long as is practical or viable
• I'm a bit anti-mentoring as that usually connotes one
person that is assigned to the company and enforces their
personal views and imposes opinions on what is needed sometimes right, often wrong.
• I'm more of the opinion that it takes a community to raise a
company (it takes a village to raise a child). We have that
community here and execute these beliefs on a daily
basis. Initial interview, education, open
resources, individual, peer and group mentorship, strong
connections, events… .