Whether a startup is B2B, B2C, industry-agnostic, industry-specific, idea stage or post-revenue, the purpose of accelerators is the same: to help startups become investment-ready.
Increased competition
The main challenge accelerators face when helping startups find funding is that there are more startups and accelerators than ever before. Accelerators need to differentiate themselves because startups have so many options in the market today.
A strong technology portfolio, interesting product features and functions and an attractive pitch deck were enough to attract investors. To help startups meet the demands of the current fundraising landscape, accelerators need to rethink their approach to the services they provide.
For up-and-coming ecosystem-based accelerators, it is crucial to bring local wealth out of the aspects and into the venture asset class. It does this by speaking more directly in the language of traditional wealth investors: milestones, systematic customer and revenue growth. This investor profile is interested in customer and revenue traction.
Traction
The cost and complexity of building a product will never decrease, and the availability of trained and experienced product developers will never increase. Accelerators empower their founders with a systematic approach to attracting investors to their founders (and funding their programming), acquiring customers, and growing revenue.
Often, accelerators hold a customer development week or a sales week. Helping a company increase revenue in a week is a difficult task. They introduce customer interviews and other high-level go-to-market concepts and leverage their network of advisors for inspiring conversations and customer connections.
But they don't have a comprehensive go-to-market framework that empowers founders with the knowledge, skills, tools, and training they don't currently have to do the real work of systematically growing customers and revenue in a repeatable and scalable way.
Accelerators over-rotate to investor conversations instead of acquiring users.
If a startup can find customers, that means they can save the runway. Similarly when they go for fundraising, they don't do it for survival but to increase brand power.
The sequence of activities for accelerators and startups should be:
- Build an MVP,
- Get customers and revenue, and
- Leverage market traction to obtain venture capital
In the early stages of any venture, investors are most concerned about execution risk. Founders need to be able to attract and retain the team they need to accomplish the daunting task, and they need to be able to do what they set out to do in their pitch deck.
Revenue proves that a startup is solving an important problem in a sustainable way. If no one is paying for the solution, even more funding won't necessarily change it.
Pitch decks are important for accelerators to attract top founders, get funding for their programming, and investors for their startups. Ideas for Accelerators, Founders can be empowered with the knowledge, skills, tools, training and experience needed to move beyond theories, canvases and occasional mentor sessions and systematically identify their target market and acquire customers and revenue.
