Startup accelerator

What it means

An accelerator is a fixed-length programme for a cohort of young companies, usually lasting three to six months. Participants get mentors, workshops on product, sales and finance, access to contacts and, at the end, a demo day where they pitch to investors. The aim is for a startup to cover in a short time ground that would otherwise take years.

It differs from an incubator in pace and selection. An incubator offers space and support over the long term, often to companies at the very earliest stage, while an accelerator picks teams that already have a prototype or first customers and pushes them towards measurable progress, most often proof of product-market fit.

Many accelerators invest a small sum in exchange for equity, while others are funded by the state, a university or a corporation and take no stake. For a founder the difference matters: the accelerator’s stake goes onto the cap table and dilutes them before the first real investor arrives.

How it works in practice

Before applying, read the contract, not just the brochure. What counts is the size of the stake, the form of investment, such as a convertible loan or a direct share purchase, and any rights the accelerator reserves for the next round.

If the accelerator takes a stake, the articles of association and the commercial register entry change, and a shareholders’ agreement may be signed. State and grant-funded programmes, on the other hand, count as aid that may fall under the de minimis rules and has to be recorded.

On demo day investors see the pitch deck and the numbers. Before a programme we help clients get their books, financial plan and cap table in order, so that investors’ first questions are about product and market rather than mistakes in the basics.

What to watch out for

The most common mistake is giving away equity for a programme that offers nothing beyond lectures available for free. Talk to alumni of earlier cohorts and find out how many of them actually closed a funding round or won customers after the programme.

The second risk is formal: a startup with no company set up, unclear founder shares or no intellectual property agreements can be dropped from the programme or lose the investment. These points are best settled before applying.