Startup accelerators support early-stage, growth-driven companies through hands-on education, mentorship, and financing. Startups enter accelerators for a fixed period of time, and as part of a cohort of companies. The accelerator experience is a process of intense, rapid, and immersive education aimed at accelerating the life cycle of young innovative companies, compressing years worth of learning-by-doing and also get practical knowledge about the business into just a few months.
The first company known to use the word "accelerator" was Y Combinator, which started in Cambridge, Massachusetts, by Paul Graham in 2005, and later moved to Silicon Valley.
Accelerators have a rigorous curriculum, a dedicated mentor pool and provide some early-stage financing. Top companies have launched through TechStars, YCombinator and 500 Startups.
There are basically exist four essential factors which make the accelerators unique: 1) fixed-term, 2) cohort-based, 3) and mentorship-driven, and 4) a graduation or “demo day.”
Brad Feld, a Cofounder of TechStars said that, the accelerator experience to immersive education, where a period of intense, focused attention provides company founders an opportunity to learn at a rapid pace. Learning-by-doing is vital to the process of scaling ventures, and the point of accelerators is to accelerate that process. In this way, the founders compress years’ worth of learning into a period of a few months.
For a country like us, accelerator program plays a pivotal role to develop new startup and startup ecosystem for the society. Because here most of the graduate are left behind employment opportunity only because of lack of opportunity. An accelerator is a program which inspires the young generation to make new things and bring dimensions in the startup ecosystem. There are many prominent startup companies who are basically initiated by the accelerator program. Some of them are “unicorns” Airbnb, Dropbox, and Stripe, among others.
Accelerators have a positive impact on regional entrepreneurial ecosystems, particularly with regard to the financing environment. Metropolitan areas where an accelerator is established subsequently have more seed and early-stage entrepreneurial financing activity, which appears not to be restricted to accelerated startups themselves, but spills over to non-accelerated companies as well — occurring primarily from an increase in investors.
Accelerators can have a positive effect on the performance of the startups they work with, even compared with other key early-stage investors. But this finding is not universal among all accelerators and so far has been isolated to leading programs.
By and large, accelerators seem to be a positive addition to startup ecosystems across the country and the world. Some may not make much of a difference, but many clearly do, and the best ones are poised to meaningfully improve the odds of success for the startups that graduate from them.