By Syed Balkhi, founder of WPBeginner
Airbnb, Twitch, Stripe and Dropbox -- what do all of these successful businesses have in common? They were all once startups who got a push in the right direction with the help of accelerator funds.
Accelerator funds, also known as startup accelerators, are fixed-term, group-based programs that include seed investments, mentorship, access to industry connections and educational components to accelerate a startup's growth. According to the Global Accelerator Report, a total of $206,740,005 was invested in 11,305 startups by 579 accelerator programs.
Being able to help others reach their goals and dreams is rewarding; that's why I recently started my own accelerator fund. I would have never gotten to where I am without the help of my mentors who were kind enough to share their wisdom with me. If you're thinking about starting an accelerator fund, there are a lot of other benefits, including improving your company culture and return on investment. But how do you build a successful accelerator fund?
Choose the right time.
It took a lot of time and discussion before I decided to create a growth accelerator fund. Money is key to funding talented startups, but it shouldn't be your only concern. The most important aspect of creating a successful accelerator fund is timing -- where you are in your career and the time you have to give.
You're becoming a mentor who others will turn to for advice. If you're only a couple years into your business, you probably still have a lot to learn. An accelerator fund should be run by entrepreneurs who've amassed a wealth of knowledge over many years running a successful company.
You also need to have enough time to devote to your fund. If your business is going through a major transition or you're booked with commitments for the next six months, you won't be able to spend the time needed to make your accelerator fund a success. Only start building one if you know you have the time to put your full focus into it.
Assemble a great team.
Building and running an accelerator program is a lot of work and you cannot do it alone. Assemble a team that consists of the company's founders or partners and other influential mentors from your industry.
I'd shy away from including managers or administrators on your team. These are great people to include when building and organizing the fund, but for mentoring you want people who have experience with the ins and outs of running a company. Don't forget to clearly establish roles and expectations for each member of the team.
Determine your value.
There are many accelerator funds out there, so decide on your accelerator fund's unique angle. For example, I created an accelerator fund for WordPress-focused businesses to help boost the WordPress small-business community, which is often misunderstood by investors.
Think about what you can offer that's different from everyone else and why startups would want to apply to your fund versus another more established one. What benefits will the startups that work with you receive? Funding, mentorship, media exposure, one-on-one time with you, etc.? In my case, funding is just one component. I want to share knowledge, experience and resources to help founders grow their businesses.
Define the selection process.
After you've figured out the meat and potatoes, define the selection process and criteria for choosing the startups who will receive your funding and mentoring. Start with an online form for startups to fill out. This provides you with all the basics about what their company does so you can see which startups look most promising. After the online form and a second stage of questioning for the contenders, conduct face-to-face meetings, whether they're in person or via video conferencing.
When determining the criteria for the startups you'll pick, consider things like level of coachability, the extent of their experience and the potential of their business idea. Choosing who you'll mentor is one of the most important steps; by creating a plan and criteria, you and your team will be able to wisely choose the best fit for you.
If you're ready to start an accelerator fund for your business, congratulations. It's taken a long time for you to get to a place to give back to talented creators, innovators and entrepreneurs in your industry. As long as you have a plan in place, your accelerator fund has the potential to turn the dreams of startups into realities.
Syed is the founder of WPBeginner, the largest free WordPress resource site that helps small businesses start their website.