A version of this article previously appeared in Forbes.
With top-ranked accelerators Lauchpad LA closing its doors and Y Combinator rebranding itself as a seed fund, it seems fair to ask the question, “Are Accelerators Dead?”
Good news: a quick review of TechCrunch’s March 2015 List of Top 20 U.S. Accelerators, which includes two LA-based accelerators in the Top Ten (Mucker Lab and Amplify LA), proves that the overall health of the Accelerator landscape is sound.
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The TechCrunch team was judicious in its determination of qualifiers, insisting that the accelerators be, “fixed-term, cohort-based, with educational and mentorship components, culminating in a public pitch or demo day.” In addition, quantitative measurements included participants’ valuations, fundraising success, exit valuations and survival rates. Note: for purposes of this article, I am using the term “accelerator” to include incubators, startup labs and all other organizations geared to facilitating a startup’s early maturation.
Yet to be a truly effective accelerator, the work must continue the momentum beyond Demo Day. Obtaining funding is a key milestone, but equally important is helping fledgling companies build institutional mass once they leave the relatively safe confines of an accelerator.
To better understand how the accelerator world has matured beyond Demo Da, I sought out Jason Denenberg, former partner at Angel Capital Group, and current Director of Entrepreneurship at Launch Tennessee (LaunchTN). I previously wrote about LaunchTN’s second-phase master accelerator class called The TENN, which has a proven track record of helping startups thrive after graduation from an accelerator.
One member of the LaunchTN network of nine regional accelerators, ZeroTo510, in the Greater Memphis Accelerator Consortium, was listed in TechCrunch’s accelerator ranking. In addition, something interesting in happening in Tennessee, with the advent of hands-on venture firms like the Lamp Post Group and innovative ventures, such as PriceWaiter. My Forbes co-contributor Geri Stengel concurs that something is happening in the Volunteer State, writing last month about that state’s emerging women entrepreneurs.
In advance of LaunchTN’s flagship conference, 36|86, June 8-10 in Nashville, Jason shared with me the following three ways an accelerator should add value beyond demo day. Savvy entrepreneurs - seek out programs which incorporate these post-graduation activities.
- Convert Graduate-Founders Into Mentors
According to Jason, “Every experience is also a learning experience. Bringing an accelerators’ graduates back as mentors provides value to the next class, certainly. But to the graduates, it provides an opportunity to grow as leaders. It also provides a way for graduates to learn about ideas, opportunities and technologies about which they might not have been aware while focusing on building and scaling their own startup. This builds a strong alumni base; an element of significant importance to an accelerator’s value as well. If a mentorship seems like too large of a commitment, bring them back as a judge in the next cohort’s finale or demo day.”
- Provide High Impact Exposure Beyond Your Hometown Press
One unique aspect of LaunchTN is that each master accelerator class is taken on investor and media tours of Silicon Valley and New York. Per Jason, “In some cases, media meetings and introductions don’t generate immediate results. However, by providing a simple note to a journalist, or sending an e-mail to the graduate with a writer’s contact information, the graduate’s funding announcement often garners exposure without much effort.”
Such was the case with Chattanooga-based Feetz, the self-described “digital cobbler” and graduate of The TENN. Feetz earned coverage in the Wall Street Journal following The TENN’s 2015 West Coast trip for their innovative 3D printed shoes.
- Adopt A “Whatever It Takes” Mentality
Accelerators should demonstrate (with actions, not just words) a “Whatever It Takes” mentality when it comes to helping graduates hit their post-demo day milestones. To this end, Jason noted that, “If a graduate needs a curated list of 55 development targets in a particular geographic area in order to get from a $1M revenue run rate to a $3M revenue run rate, we’ll provide it. If one of our TENN team companies needs legal advice to support negotiations with a large global brand, we’ll leverage our relationships, call in a favor or two and get it done.”
Although post-graduation support is key, Jason also made it clear that the ultimate responsibility for success lies with the startup team. In his words, “Following the demo day, startups must continue sell like there is no tomorrow to generate revenue and show traction in the marketplace. No program can work miracles. If the sales aren’t there, it might be time for the entrepreneurs to either pivot or seek out a new venture.” Even in the world of accelerators and post-demo day programs, some things never change. Just like in the “old days,” sales still solve all problems.
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