Subscribe to Inc. magazine

Sean Percival's Rules for Accelerated Start-Ups

The ex-MySpace VP shares the unspoken rules investors go by when shopping for start-ups.

To get their companies off the ground, many entrepreneurs have turned to start-up accelerators.

But they aren't for everyone, warns Sean Percival, a Los Angeles entrepreneur whose latest venture Wittlebee didn't really survive the so-called Series A crunch

When chosing an accelerator, entrepreneurs must do their homework. They want one to align themselves with one that's founder friendly, has money to spare, and some proclivity for long-term stability. Most aren't any of those things. 

Further, entrepreneurs must know the four rules investors go by when shopping for accelerator-nurtured start-ups, which are: 

  • If you’re not a YC company you’re less interesting.

  • If a firm has recently invested with one company from your accelerator they’re not likely to invest in another (too many eggs in one basket).

  • If a firm has had a bad experience with another company from your accelerator it’s doubtful that they will invest in yours.

  • LA-based accelerators have it much tougher, with less capital down here and Silicon Valley investors preferring local accelerators (YC, 500 Startups, etc.)

"Fast growth has its own pitfalls," Percival adds. "Growth without soul is just that. It produces a shell of a company or product and I can assure you quality investors have a great nose for that. There is such a thing as an overaccelerated company, and it's not desirable with investors." 

Do you agree with Percival or would his rules not apply to your start-up? 

Last updated: Jun 4, 2013


Jana Kasperkevic is a graduate of Baruch College, City University of New York, where she earned a bachelors degree in Journalism and Political Science. She covers start-ups, small businesses, and entrepreneurship for Inc. Her work has appeared in The Village Voice, InvestmentNews, Business Insider, and Houston Chronicle, among others. She lives in Brooklyn.

Register on today to get full access to:
All articles  |  Magazine archives | Livestream events | Comments

Or sign up using: