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Accelerate This!
A super Not Boring Guide to Startup Accelerators and Clean
Energy Entrepreneurship
DEDICATION
New Energy Nexus Publishing
DEDICATION
Accelerate This! is licensed under a Creative Commons
Attribution-NonCommercial-ShareAlike 4.0 International
License. You may share and adapt the material from the book
with appropriate attribution. You may not use the material To: Ken Saro-Wiwa Jr.
for commercial purposes. You can read the full license at:
creativecommons.org/licenses/by-nc-sa/4.0/ Dedicated to KSW Jr. – a man who spent his life in the
shadow of a saint, Ken Saro-Wiwa Sr., and ended up
dying of a broken heart. His father was killed because
First Edition July 2018 he dared to oppose the power of fossil fuel interests.
New Energy Nexus Publishing is an imprint of
California Clean Energy Fund Innovations After a career of fighting, KSW Jr. spent his last
Oakland, California couple of years trying to incubate entrepreneurs to
ISBN-13: 978-1723026706 bring clean energy to Nigeria. He strived to build
ISBN-10: 1723026700 resourceful accelerator spaces which could fast-track
access to clean energy for all in the Niger Delta.
Book design and illustrations by: Less Ordinary, Shanghai
THANKS! In awe of the amazing design team:
THANKS!
World Wildlife Foundation for Nature Epic high fives to the New Energy Nexus community:
Huge thanks to the contributors: Ameren Accelerator, Austin Technology Incubator (ATI), Caribbean Climate Innovation Center (CCIC), Cascadia
Cleantech, Clean Energy Business Incubator Program, Clean Energy Trust, CLT Joules Accelerator, Coalition
Amanda Joy Ravenhill, Jane Sunderland, Judyth Hill, Daniel Hersson, Jin Lee, Kat Manalac, Nasimeh Bahrayni,
Energy, Elemental Excelerator, Foresight Cleantech Accelerator Centre, GCIP Cleantech Open/UNIDO, Greentown
Justin Rosenstein, Paul Orlando, Tim West, Starlene Sharma, Neal Gorenflo, Adam Smiley Poswolsky, Rupesh
Labs , Innosphere, Innovate Calgary - Kinetica, LACI, MaRS Discovery District, MassCEC, Next Energy, Nexus NY,
Madlani, Ms. Wenjuan WU, Mr. Xiaosong LI, Megan Holstein, Renato Galli, Sheel Mohnot, Audun Abelsnes, Helmut
NYC ACRE, Powerhouse, Prospect Silicon Valley, Silicon Climate, Smart Grid Cluster, Turning Tables, Climate
Hertzog, Freerk Bisschop, James Tilbury, Joseph Silver, Laura Erickson, Franziska Steiner, Kunal Upadhyay, Kevin
KIC, Rockstart, Beta-I , Startupbootcamp - Smart Transportation & Energy, InnoEnergy, Cleantech Scandinavia,
Braithwaite, Trevor Townsend, Greg Satell, Shawn Moorhead, Paul Howey, Dawn Lippert, Casey Fenton, Sherri
Incense Accelerator Spain, Blue Minds Factory, Green Innovations BV, The Green Way, Greenpeace - Powerlab,
Pittman, Angela Lee, Nathalie Molina Niño, Jeffrey Goldsmith, Vicki Saunders, Sandra Kwak, Stefan Henningsson,
Tianjin Economic-Technological Development Area (TEDA), Tuspark Ventures, China Impact Ventures, China
Julia Pyper, Shannon Hood, Rajan Kasetty, Ryan Wartena, Christopher Johnson, Patricia Chin-Sweeney, Andrew
Cleantech Collaboratory, Institute for Environment and Development, Green Startups, Innovation and Business
Chang, James Parle, Mark Silberg, Bhushan Shah, Tien Nguyen, Morgan Berman, Eric Matzner, John Clarke
Incubator Center of Harbin Institute of Technology, Shenzhen Open Innovation Lab, Umore cleantech consulting,
Mills, Avary Kent, Ramsay Siegal, Ramez Naam, Leila Madrone, Hendrik Tiesinga, Tom Chi, Danny Kennedy, Iris
Hunan Innovative Low Carbon Center, Center For Green Entrepreneurship (CGE), University of International
Cheng, Saurabh Saraf, Jeff Char
Business and Economics, Green & Low-carbon Development Foundation, Integrated Innovation Department of
Sino-Swiss Zhenjiang Ecological Industrial Park, Terralab ventures, Sangam Ventures, IIM Ahmedabad’s Centre
for Innovation Incubation and Entrepreneurship (CIIE), Infuse Ventures, Venture Center, cKinetics Accelerator,
YES Scale, Impact Hub Manila, KX Innovation Center Thailand, Vietnam Climate Innovation Center (VCIC), Impact
Investment Exchange, PFAN-Asia program, Small World Group, Mekong Business Initiative, Ideaspace, Digitaraya,
EnergyLab, Startupbootcamp Energy Australia, South Africa Climate Innovation Center (SACIC), ENventure,
Ethiopia Climate Innovation Center (ECIC), South Africa Renewable Energy Business Incubator (SAREBI), Ghana
Climate Innovation Center (GCIC), The Egyptian National Cleaner Production Center (ENCPC), Kenya Climate
Innovation Center (KCIC), The Innovation Hub, Kenya Climate Ventures, Morocco Climate Innovation Center (MCIC),
Building Global Innovators, Launch Alaska, Smart Energy Network
CONTENTS 02
Funding and grants 168
Corporate involvement and the 172
customer-driven accelerator
03
Governance, leadership, and KPIs 236
Why are industry-specific 52
(AKA, WHY LISTEN TO ME?)
programs better? Ecosystem building/stakeholders 248
HACK THIS BOOK 16 Fail fast, or not 54
HOW TO BUILD AN 254
INTRODUCTION 17 Are accelerators good for the 59 ACCELERATOR
economy, and the world?
UNDER THE HOOD OF 132 The Accelerator Generator 259
01
Accelerated acceleration (of 61 ACCELERATORS
accelerators), and skepticism of them PROGRAMS AT A GLANCE 262
Step 1: Pipeline/Outreach 135
Are programs just 70 Free Electrons 264
skimming? (Additionality) Step 2: Due diligence 145
Elemental Excelerator 266
Fighting climate change with 73 Stage 1: The rough cut 146
energy entrepreneurship Stage 2: The short list 148
Y Combinator 268
SO, WHAT IS AN 20
What's unique about energy 77 Stage 3: Interviews, audits, and references 150 Techstars 270
ACCELERATOR?!
acceleration/cleantech? Stage 4: Final selection/marketplace 151
What’s an accelerator 22 Rockstart 272
versus an incubator? It's tougher for smaller markets 96 Serving the rejected (and, why 165
care about the rejected?!) 500 Startups 274
Blurry definitions, 24 Overcoming barriers for 98
but they are all "programs" women and minorities Step 3: Program 168 WAAABAM! 276
FOREWORD BY
DANNY KENNEDY
08 09
Rebels rarely succeed by going solo. The fight is too dog-eat-dog. It is a happy pack of hackers finding a
FOREWORD BY DANNY KENNEDY
More than a billion people around the world are are all incredibly valid and needed approaches. The Entrepreneurs need a Accelerators are the spiders
without electricity. Fossil fuels for electricity, heat, approach New Energy Nexus focuses on is innovation. good ecosystem to thrive – in the web of startup ecosystems,
and mobility are the main sources of CO2 emissions Creating a world that is 100% renewably powered for
causing climate change. The battle for these fossil all humanity will require uncountable innovations legal and institutional frameworks that enable them, moving around, connecting different strands of the
fuels is a leading source of geopolitical tensions on many levels, in various sectors, and across many education and skills that empower them, investors web, and creating a cohesive and strong framework.
and conflict around the world. Clean, distributed countries. To deploy clean energy everywhere, we who believe in them, and customers that buy their This is why we founded New Energy Nexus: to
energy has the potential to solve these three wickedly need new business models, new finance models, new products and services. accelerate the accelerators and to infuse energy,
intertwined challenges – all the while generating technologies, and new international partnerships ideas, resources, connections, and collaboration into
millions of jobs and trillions in wealth. and joint ventures. In our view, entrepreneurs are the global energy startup ecosystem.
one of the primary agents that produce this type of
There are many ways to support the transition to innovation. To transform the entire world’s energy
a clean energy economy: protesting, campaigning, systems, we need an army of them.
advocating for policy change, R&D programs – these
THIS BOOK IS A
12
COLLABORATION 13
THIS BOOK IS A COLLABORATION
New Energy Nexus started in 2016, with a kickoff at format, where we asked our accelerator members
the first global summit of clean energy accelerators to interview each other, take notes, and become co-
during the Asia Clean Energy Forum in Manila, with creators for the seed content for this book.
support from our partners at the Asian Development
Bank. Quickly thereafter, we started collaborating I asked one of our great allies and facilitators, Ryan
with Incubate Energy in the US, the World Bank’s Kushner, to come to Shanghai, facilitate the book
Climate Innovation Centers, and the World Wide Fund sprint, add his experience and additional research,
for Nature’s Climate Solver Network. Through these and then put this book together. Thus, the “we” in
partnerships, Nexus has grown to include more than this book is the community of accelerators in New
70 accelerators, all over the world. Energy Nexus, and the “I” is Ryan’s voice, except
where noted. You will also see data and charts based
In 2017, we held the Accelerate Energy Summit in on information we collected. That data comprises 32
Shanghai, and one of our key goals was to create an clean energy accelerators from the US, Asia, Africa,
engaging, useful capture of best practices from the Middle East, Europe, India, and Australia.
accelerators. We organized this in a “book sprint”
We hope you enjoy the book and find it useful!
True story: he showed up to a workshop I was cleantech accelerators, throw in my experience, and
14
WHO AM I? leading called “Architecting the Future: Ideas To
Action.” He was Hendrik Tiesinga, creator of New
share them with the world in a book. You’re holding
the result of that idea right now. Thanks, Hendrik!
15
(AKA, WHY
Energy Nexus, who has become a great partner,
collaborator, and lifelong friend. His concept was to But above all, I am one thing: a sustainability nut.
WHO AM I? (AK A, WHY LISTEN TO ME?)
INTRODUCTION
We recommend you read this book twice. Accelerator (noun) ik-ˈse-lə-ˌrā-tər:
Flip through it once to get a general picture of what’s One of those co-working places.
in it. Then go through again, cut it up, hack it, and
make it useful to you. Or just go right to the section Oh, wait, actually it’s a training program. They give you money. Or they don’t.
that’s relevant to your inquiry. You do you. Well, sometimes, but they take some of your company. Or they don’t. Wait,
which one of these is the right answer?
This book is about sharing best practices and demystifying some things: Amazingly, these are all right answers. Accelerators can be confusing,
intimidating, awesome… or not. I’ve personally experienced the entire
• What are accelerators and incubators? We will define the terms, and roller coaster, and we’re excited to cut through all the confusion for
tell you what makes them tick. you, so you can:
• Are they “worth it” for companies? We’ll help you parse the issues to
help you make an informed decision. 1. Decide if you want to join a program, and
2. Create a program (or run yours more effectively).
• Are they good, writ large, for society?
what your starting point is, Maybe you’re thinking about applying to an Are you running a program right now, or thinking of
accelerator or incubator, or are just curious starting one? What’s the best way to do that?! What
INTRODUCTION
INTRODUCTION
this book was written with about them. Great! But what are they?! What’s an are the established best practices for outreach, due
VERSUS AN
22 23
Duration Until you outgrow, die or annoy Ongoing 3 months to 1 year
Cohorts No No Yes
INCUBATOR?
Business Model Rent; other service Investment Investment; fees; other outside funding
WHAT'S AN ACCELERATOR VERSUS AN INCUBATOR
Source: ”What do accelerator do? Insights from incubators and angels” by Susan Cohen, 2013; Adaptations by Ian Hathaway.
Source: I. Hathaway (2016), “What Startup Accelerators Really Do,” © HBR.org, adapted from S. Cohen (2013), “What Do Accelerators Do? Insights from Incubators and Angels.”
Don’t know the difference? Welcome to the club So here are our working definitions:
of pretty much everybody. Even people who run
programs are still often unclear. Why? These are not An accelerator is a program that accepts companies An incubator is generally for companies at an earlier
legal definitions. They are the results of branding, (or ideas or people) in batches – usually called stage, and it accepts them in a continuous flow,
convention, and whatever sounds snazzy at the time. classes or cohorts. It traditionally culminates in space/capacity allowing. Incubators act a lot like co-
a demo day where companies pitch themselves working spaces by charging for desk space (and not
But for our purposes, and for the sake of the field, to potential customers, partners, investors, and doing equity deals), but they are more invested in
having some definition and taxonomy around these employees. There is generally a cash-for-equity swap, their companies’ success. They offer things like skills
terms is helpful and functional. We think that Ian but not all the time. The training is intensive, and training, connections to mentors and investors, and
Hathaway’s work and summary in the March 2016 the program invests a lot of time in the companies. an aligned community. A lot of the value is just being
Harvard Business Review article “What Startup Because of this and the need for there to be some in the space, learning from peers and dipping your
Accelerators Really Do” has the clearest thinking on “there there” in terms of an idea/prototype/project, toes into events and networks.
the matter, so we’re going to follow his lead. companies tend to be later stage.
1. SO, WHAT IS AN ACCELERATOR?!
BLURRY PRIZES
24 25
DEFINITIONS, BUT
BLURRY DEFINITIONS, BUT THEY ARE ALL "PROGRAMS"
PRIZES
THEY ARE ALL Accelerators and incubators aren’t the only kinds of will enable children in developing countries to teach
"PROGRAMS"
programs that help startups. Prize programs have a themselves basic math and literacy. The winning
unique model, which generally awards one or a select team gets a cash prize and a wonderful amount of
group of companies some combination of money/ attention.
investment, services, and a nice PR boost. Many
prizes are dedicated to some kind of impact/mission,
Are there exceptions and programs that blur the to create awareness, or kick-start an industry.
line? Oh, yes – and those can be some of the
most interesting cases. Some incubators organize
themselves into cohorts; some accelerators have
no demo day, and so on. I’m personally guilty Another notable prize is the Buckminster Fuller
of blurring these lines by designing accelerator Challenge. Called “socially-responsible design’s
programs that have rolling admissions – whaaat?! Perhaps the best known prize is XPrize, which highest award,” it has been awarding $100K every
runs a huge variety of prize competitions, each year for the last decade to the most “comprehensive”
The accelerator space is ever evolving and one sponsored by a company or foundation. Each solution it can find. It uses a systems-thinking lens
innovates just as rapidly as the startups competition is a challenge to solve a vexing issue. to unearth and support Bucky-esque projects like
themselves do – and this is good: we want and The Carbon XPrize, for example, will award $20M the Savory Institute (alternative animal grazing that
need this experimentation. It does, however, make to convert CO2 emissions into products; the IBM sequesters carbon), the Living Building Challenge
it hard to pin down strict definitions, but for the Watson prize hopes to demonstrate how humans can (like a super-charged LEED, certifying buildings
purposes of this book all of these fascinating collaborate with AI; the Global Learning prize aims for sustainability), and Green Wave (vertical ocean
entities will be referred to simply as “programs.” to develop open source and scalable software that farming systems).
1. SO, WHAT IS AN ACCELERATOR?!
PRIZES
works well for highly open and creative teams, and not so well for others (I’m
lookin’ at you, large corporates). Here are three we find fascinating:
The founder of Otherlab, Saul Griffith, has so much
energy, and he’s never afraid of telling the truth. That’s the
main thing you need in a startup: somebody who’s never afraid
of telling the truth. Why? You don’t want to waste time. It takes
a LONG time to build stuff. From beginning to end, it’s going to
take maybe 10 years of your life, so make sure you care enough
about the solution.
Idealab: Idealab is considered by some to be the Otherlab: Hidden away in an old pipe organ
original accelerator program. Many of the ideas factory in San Francisco’s Mission District is Saul co-creates ideas and then he figures out how to get people
come from Bill Gross, founder and chairman, Saul Griffith’s Willy Wonka-esque idea shop. and resources together to make change happen, and then he
then Idealab provides the first round of capital, The day I was shown around by Leila Madrone
doesn’t interfere with what we’re doing, except for when we
recruits a CEO and team, and works with the of Sunfolding (which was accelerated by both
company to ramp up the business. Does it work? Otherlab and Y Combinator), I saw everything pull him in. You don’t necessarily always want a person who’s
Over a 20-year span, Idealab has started more from alternative air conditioning systems to a not involved in your company every day giving direction to your
than 150 companies, created more than 10,000 robot that hangs drywall. Like Idealab, the team company, and he understands that really deeply.
jobs, and has had more than 45 successful creates and vets ideas, then staffs them.
IPOs and acquisitions, including seven unicorns
(companies valued at $1B or more).
1. SO, WHAT IS AN ACCELERATOR?!
INV
EST
ORS
S
YES, BUT
OR
NT
ME
28
WHY? (MONEY 29
AND IMPACT,
MONEY
GROWTH
ENERGY
CLEAN
AFFORDABLE
IN VARIOUS
CLIMATE
ACTION
IMPACT
ZERO
HUNGER
32 33
YES, BUT WHY? (MONEY AND IMPACT, IN VARIOUS PROPORTIONS)
Other programs focus on impact. They design their However, even if a program is a nonprofit and is The more successful a company By investing in companies EEx has a P+L (profit and loss
programs to address social, economic, or ecological impact-first, that certainly doesn’t mean that it isn’t is, the more it displaces fossil and getting returns/making statement) just like any other
challenges. These programs are mostly nonprofits, financially driven. Elemental Excelerator, for example, fuels, and the more it serves the money, EEx is able to prove company, with a big staff and big
but not exclusively. Many programs are funded by the Honolulu and Palo Alto–based cleantech mission of the organization. that investing in cleantech operating costs. When a portfolio
cities or governmental organizations, in order to accelerator program is a nonprofit, but it is highly companies, even in their company has a “financial event”
spur economic growth. Some programs advance driven to find and invest in scalable, growth-oriented traditional “valleys of death” (aka (getting sold or acquired), EEx’s
specific goals, such as Imagine H20, which uses its companies. It scours the world for companies, runs stages at which companies tend equity in the company turns into
accelerators as a way to address water challenges, or an epic due diligence process, and takes 1%–6% of to fail), is a smart investment. cash, and that money gets returned
Rock Health, which is dedicated to advancements in an equity stake in a company in exchange for $75K This helps bring other investors to the program in a structure called
health care. to $1M, depending on the maturity of the company. into the space and expands the an “evergreen fund.” This keeps
While this might seem counterintuitive for a nonprofit, total capital pool, which also the program going, and the impact
the justification is threefold: furthers their mission. growing.
1. SO, WHAT IS AN ACCELERATOR?!
To make things even more complex on the for- New Energy Nexus community of clean energy
Are You A...
Are You A...
profit/nonprofit front, EEx also has a for-profit accelerators represents this diversity. Some,
34 35
follow-on fund intended to support companies like Rockstart, are a clean energy program with 24 RESPONSES
after they exit the program. This kind of structure a for-profit structure. Others, like the World
is very common, and for good reason: the EEx Bank’s Climate Innovation Centers (in Ghana,
YES, BUT WHY? (MONEY AND IMPACT, IN VARIOUS PROPORTIONS)
For-profit
25%
Not a separate legal entity but moving
toward nonprofit organization
Nonprofit, plan to become for-profit
MATURITY OF A
YES, BUT WHY? (MONEY AND IMPACT, IN VARIOUS PROPORTIONS)
KAT MANALAC
Partner Typical Stages Of Startup Funding
38 @ Y Combinator 39
Revenue
sell it – a technical capability to build a prototype,
and then get it to market.
actually execute.
C
B
The main thing we focus on is founders, because
A
we understand that ideas change. We can’t marry Valley of
the idea, so we really focus on whether founders Death
Time
can execute. We think, “Does this company have the
potential to become a billion-dollar company?” Or,
if it’s a nonprofit, “Can it impact millions of people,
and how we can help them do that?”
Source: J. Zenn, “The Stages of Startup Funding (with infographic),” blog, Evus Technologies.
1. SO, WHAT IS AN ACCELERATOR?!
40 41
Sometimes the company I’m investing in has a real When people hear “accelerator,” they often think of
product and they can show how fast their sales are going programs like Y Combinator, 500 Startups, and Techstars. These
WHY THE FOCUS ON STAGES/MATURITY OF A COMPANY?
Continue
1. SO, WHAT IS AN ACCELERATOR?!
42
1 The first gap is called the
“Technological Valley of Death.” 2 The second gap occurs when startups are seeking
capital to fund commercial-scale projects. 43
At this stage, companies are still developing their technologies and business
The Breakthrough Institute calls this the “Commercialization Valley of Death.”
models as they get ready to raise a first round of institutional capital.
WHY THE FOCUS ON STAGES/MATURITY OF A COMPANY?
PRIVATE EQUITY GRANTS SEED FINANCING ANGEL INVESTORS VENTURE CAPITAL DEBT FINANCING PRIVATE EQUITY
UTILITIES AND
CORPORATES
TECHNOLOGICAL COMMERCIALIZATION
VALLEY OF DEATH VALLEY OF DEATH
Philanthropic Capital
(i.e. PRIME Coalition)
Source: J. Jenkins and S. Mansur (2011), “Bridging the Clean Energy Valleys of Death,” Breakthrough Institute. Source: J. Jenkins and S. Mansur (2011), “Bridging the Clean Energy Valleys of Death,” Breakthrough Institute.
1. SO, WHAT IS AN ACCELERATOR?!
44
3 We have observed a third “valley of death” – when
startups attempt to expand and scale into new markets.
At Elemental Excelerator, we ask our
Demonstration Track applicants to apply
with a transformational project in mind.
45
This could mean new geographic markets or new customer segment, such as The idea is that we bridge the third valley
WHY THE FOCUS ON STAGES/MATURITY OF A COMPANY?
46 47
DO
WHY THE FOCUS ON STAGES/MATURITY OF A COMPANY?
ACCELERATORS
Follow-on Funding $350M raised, companies fall between pre-seed to
Series D
Funding Awarded
Capital Unlocked for Innovation
$22M awarded by EEx to 63 portfolio companies
$12.3M of cost share for demonstration projects
ACTUALLY WORK?
from utilities, building and land owners, agricultural
operations, government agencies, and other local
businesses
Acceleration Effectsin
Acceleration Effects in43
43Programs
Programs
A fundamental challenge for new ventures is overcoming
liabilities of newness – particularly, lack of business
48 49
ONE-YEAR CHANGES IN KEY PERFORMANCE METRICS
knowledge and lack of social embeddedness. Accelerators,
intense, time- compressed entrepreneurial programs, PARTICIPATED REJECTED
AVERAGE AVERAGE DIFFERENCE
attempt to alleviate these liabilities and accelerate
DO ACCELERATORS ACTUALLY WORK?
Debt AndEquity
Debt And Equity Financing
Financing Grew
Grew 38%38% For Accelerated
For Accelerated Are Accelerated
Are AcceleratedVentures
Ventures More
More Likely
Likely To To Grow?
Grow?
Ventures, Compared
Ventures, Compared To To
22%22%
ForFor Rejected
Rejected Difference in Percentage of Participated and Rejected
Application 1 Year Later With Positive One-Year Changes
High-Income Countries
Accelerated $108,631
DO ACCELERATORS ACTUALLY WORK?
Revenue Grew50%
Revenue Grew 50%For
For Accelerated
Accelerated Ventures,
Ventures, Compared To
Compared To 30% For Rejected
30% For Rejected Percentages for the full sample: Revenue (10%); Employees (7%); Equity (8%); Debt (9%)
Application 1 Year Later Source: GALI (2017), Accelerating Startups in Emerging Markets: Insights from 43 Programs.
Note: Data based on study of 43 programs.
Rejected $36,378
Ventures
$47,176 Can any accelerator program help any enterprise,
Accelerated $61,581
and are they all “worth it”?
Ventures
$92,387 Certainly not, so let’s get deeper into programs to tease the factors and
forces out, and help give more clarity as to when programs help, when they
$0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 $100,000 don’t, and whether you, as an entrepreneur, should take the dive.
52
WHY ARE AVARY KENT 53
INDUSTRY-SPECIFIC
Co-Founder
@ Conveners.org & the Accelerating the Accelerators Program
WHY ARE INDUSTRY-SPECIFIC PROGRAMS BETTER?
The [What Works Centre for Local Economic Growth] study finds that accelerators are
54 associated with a reduction in the amount of time until the firm is "terminated ", both in 55
the short run (120-500 days after being admitted to the accelerator) and in the longer term
(at least 500 days after admission). The study notes that this may be due to the fact that
FAIL FAST, OR NOT
FAIL FAST, OR NOT speeds up the process through which firms fail, but also, through which they are acquired. 2
Failure, the culture of it, and the ability to see failure as a This all rings true with my own experience as an (Retention Rate ÷ ([1 + Discount Rate] – Retention
positive is a much written about phenomenon. Many credit entrepreneur. My post-MBA startup Cozmos is a good Rate) and how we would ultimately make money.
a positive culture of failure as one of the main ingredients in example. We came into the Mix & Stir accelerator with
the secret sauce that has made the San Francisco Bay Area/ an idea for a group communication tool, something Ugh… it was terrible. As it turned out, it would have
Silicon Valley consistently one of the most innovative and that would compete with Facebook groups and been a tough business, with long sales cycles and
productive places in the world. LinkedIn groups. We were targeting large member specious numbers on customers’ willingness to
organizations like Greenpeace, which have millions pay for our service. We had a short runway of cash,
Accelerators have a role in this. Though this may seem of members but whose members have few ways of and the whole thing crashed. It was tough, but after
counterintuitive, studies have shown that accelerators can getting to know each other or self-organizing. We my team broke up, we all moved on to other, more
actually shorten the life of some companies, and this is a had this massive, Swiss Army knife of tech in mind: successful enterprises – and that was a gift. Thank
good thing. If you’re working on a company that is destined for pages, subpages, direct messaging, connecting social you to Hiroshi and the Mix & Stir accelerator team for
failure, a good accelerator can help you come to terms with feeds. The accelerator program we were in forced hastening the demise of Cozmos and gently pushing
that quicker. Failing fast lets you lick your wounds, move on, us to prioritize, and look critically at our customers, me out of the nest.
and create something new and hopefully more successful. the sales cycle, customer lifetime value (Margin *
2
Toolkit Business Advice Accelerators,” What Works Centre for Local Economic Growth, 2017.
1. SO, WHAT IS AN ACCELERATOR?!
1 2 3
56 57
FAIL FAST, OR NOT
This may sound simple, but it’s incredibly Most companies never make it to next Your customers want every problem
Here are my three pieces
hard and takes a lot of perseverance. year, so you need to think long term solved and they are often not in your
of advice for startups:
Providing value is hard enough, but doing but build for the short. This goes for wheelhouse or don’t fit in your vision. I’m
it over time while growing constantly is sales as well as product. It takes time continually amazed by how many sales
challenging. Most startups never provide to iterate and to find market fit, and opportunities we have lost due to some
enough value to grow, and if they do, they building alone will not create those outlandish requirement… only to see
often die or stagnate even after product/ things – interactions with customers them come back a year later and buy our
market fit is achieved. will. product, even if the price has gone up. If
I always did what my customers said, I
wouldn’t still be running a company.
1. SO, WHAT IS AN ACCELERATOR?!
GOOD FOR
FAIL FAST, OR NOT
ACCELERATION
ARE ACCELERATORS GOOD FOR THE ECONOMY, AND THE WORLD?
OF ACCELERATORS ,
Rejected
2.6
AND SKEPTICISM
Ventures
3.4
OF THEM
3.1
Accelerated
Ventures One of the first things I did when I started this
book project was ask the amazing hive mind of
4.6
Facebook what they would want to learn from a
book about accelerators and incubators. I expected
the requests to be pretty tactical: Which are the best
0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5
programs? How do you get into them? Wow! I did
not expect such an amazing level of emotion and
raw skepticism from a derpy little Facebook post.
Source: GALI, “Initial Insights from GALI.” www.galidata.org/insights.
1. SO, WHAT IS AN ACCELERATOR?!
AVARY KENT
62 63
Co-Founder, Conveners.org
& the Accelerating the Accelerators Program
ACCELERATED ACCELERATION (OF ACCELRATORS), AND SKEPTICISM OF THEM
“China’s 13th Five-Year Plan (2016-2020), which aims to become an ‘innovation nation’ by
2020, an international leader in innovation by 2030, and a world powerhouse in scientific and
Neal Gorenflo Some justification that they should be supported by technological innovation by 2050, has for the first time incorporated accelerators into the
government. My take is that they should never be supported or in national incubator system.
64
any way subsidized by government unless the wealth created is 65
broadly shared with the taxpayers who ultimately pay for such
support. Unless there’s the latter, these programs are simply The country aims to increase the total number of domestic incubators, makerspaces
helping the already advantaged get even richer and at taxpayers and accelerators to more than 10,000 by 2020, with a target of 100 overseas incubators,
makerspaces and accelerators for the same period.
ACCELERATED ACCELERATION (OF ACCELRATORS), AND SKEPTICISM OF THEM
4
Like . Reply . 7w These programs are estimated to generate three million job opportunities and 2,000 listed
companies, according to staff at Torch High Technology Industry Development Center.”
Neal Gorenflo Or just justification for why they should exist
period. What is the benefit to society as a whole? – “China Tops the World in Incubators, Makerspaces,” ChinaDaily.com.cn, September 9, 2017
1
Like . Reply . 7w
Number Of US Programs By
Industry Investment Focus
66 Number Of US Programs By Industry Investment Focus 67
58 46 50
106
I would agree there is accelerator fatigue in
the world. I think the reason is that it’s very easy
130
to just stand up an accelerator. I think you could
98 83
start one today, build something, and probably get
a couple of startups to apply. But who knows how
successful it would be? To be successful, there 43 28
are about 10,000 things that you need to do. We’re Food &
Agriculture
continuously improving, working, looking at our Human Capital Low Tech
Healthcare Management Softw
& Retail are
Source: California Business Incubation Alliance (2016), California Tool Works: Incubation and Acceleration in the Cauldron of Innovation
1. SO, WHAT IS AN ACCELERATOR?!
300
250
ACCELERATED ACCELERATION (OF ACCELRATORS), AND SKEPTICISM OF THEM
150
3,701
100
50
3,269
0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 1,368
1,172
Source: California Business Incubation Alliance (2016), California Tool Works: Incubation and Acceleration in the Cauldron of Innovation
66% 44%
1,795
Programs Investing in Companies They Select Programs Providing Access to Shared Equipment
Programs with Fixed Dates for Participating Startups Programs Providing Access to Corporate Services
Europe US$50,124,145 US & Canada 3,269
Programs with Associated Physical Space Middle East & Africa US$7,587,738 Middle East & Africa 1,172
Source: California Business Incubation Alliance (2016), California Tool Works: Incubation and Acceleration in the Cauldron of Innovation Source: Gust (2016), Global Accelerator Report 2016.
1. SO, WHAT IS AN ACCELERATOR?!
ARE PROGRAMS
70
JUST SKIMMING? 71
ADDITIONALITY
ARE PROGRAMS JUST SKIMMING? (ADDITIONALITY)
Good question. You can make a fairly sound argument You can argue that a program is more of a How do you know that you’re making a difference/
that all programs do is skim the top, taking the best certification than an accelerator program, but
companies, who are bound for success anyway, and having that certificate does matter and may help you having additionality?
claim those companies' successes as their own. succeed. So it’s a balance.
FIGHTING
CLIMATE CHANGE
72
BHUSHAN SHAH
WITH ENERGY 73
DANNY KENNEDY
How do you judge your success?
Managing Director
• Jobs created @ the California Clean Energy Fund
• Sales/profitability of clients
• Funds raised by clients
As we roll through 2018, a complete disruption The world is rapidly moving beyond 20th-century
• Taxes paid by clients of energy is happening globally. China is adding energy systems for the provision of electricity and
a London-sized electric bus fleet every 5 weeks. mobility services. The pace of change is greater than
• Income and employment in rural
A solar plant was recently built at the site of the any experienced in over a century by the incumbents
areas though supply chain linkages
Chernobyl nuclear disaster. An Achuar community of the utility and automobile industries in the so-
on the Amazon is using a solar-powered river bus to called “developed world.” And for the very first
get their kids to school. California is having days with time over a billion people in the global South have
75% of its power coming from renewable sources… the prospect of benefiting from electric power and
and less than 1 gigawatt of capacity from fossil fuels. modern transport.
Germany has had 100% renewably powered days.
India added more energy capacity from renewables By the numbers, the wheel of creative destruction
than coal last year. Saudi Arabia just announced a that is turning through the “commanding heights of
$200B solar project. the economy” is staggering.
1. SO, WHAT IS AN ACCELERATOR?!
350 Oil
Coal
300
74 75
Natural Gas
250 Renewables
engine) vehicles and potentially private automobiles and an electric outboard motor for a canoe to show
Nuclear
altogether. Think Mobike, Genze, Lyft, Didi, Uber, the Achuar that they don’t need to depend on oil.
FIGHTING CLIMATE CHANGE WITH ENERGY ENTREPRENEURSHIP
200
Turo, Zipcar, and electric scooters to get where you’re A financier from Japan needed to partner with the
150 going. Saudis to get them to realize their solar potential, etc.
100
Yet, all this is not enough. According to a study from Around the world there are thousands of stories
the United Nations, renewable energy and energy playing out in the energy transition with startup
50
efficiency can provide over 90% of the energy-related companies and social enterprises creating new
0 CO2 emission reductions required to keep global electricity and mobility solutions.
1990 2000 2010 2020 2030 2040
temperatures from rising by 2°C, but we need to
increase the rate of adoption of these technologies Some of this requires novel invention, while much
sixfold. of it is the adaption of an existing business – a PV
plus battery installation, for example – in a locally
The rate of change in end-use energy systems is the appropriate way.
$300B was spent on clean energy projects in 2017 issue of our times. And a key determinant of that rate
– $160B on solar alone – while only $106B went to All forecasts are wrong, as you of innovation and adoption of these solutions on the Again, the dollar values are staggering. Hundreds of
finance coal and gas projects. That sort of ratio has will learn from working on the energy ground is the entrepreneur: how many we have, and billions in wind and solar projects last year made for
been the case for years now: more than twice as transition – normally on the underside how successful they are in their work. a lot of companies being busy for a lot of months in a
much capital flowing into clean energy project finance as to the dramatic pace of change. lot of different markets. And they created a lot of jobs.
compared to dirty energy project finance. But the question for you, Dear Reader, Entrepreneurs and the businesses they build come But for that to continue to grow at the scale required,
is: How do we accelerate this? These in a variety of shapes and sizes. Some big factories many more startups are required. And all these
Next, the transformation of transportation will curves are probably directionally right, in China are making batteries for those buses. A startups need support and capital to succeed.
start to see a similar scenario play out with shared, developer from Germany is remotely monitoring the
and we need to make them happen
electrified, autonomous, and networked (SEAN) solar plant at Chernobyl. An ingenious indigenous
sooner.
transport options icing ICE (internal combustion leader took the effort to secure 30 solar panels
1. SO, WHAT IS AN ACCELERATOR?!
76 77
78 79
Investor issues: bigger check sizes and Real physics, with bigger, Competing with
Policy
longer time horizons for exits older gatekeepers an existing product
WHAT'S UNIQUE ABOUT ENERGY ACCELERATION / CLEANTECH?
ANDREW CHANG
New Energy Nexus
Free Electrons & Powerhouse
80 81
82 83
In most cases, provision of electrons and Historically, many cleantech innovations The energy system in particular is highly In short, software scales faster with higher
BTUs is a commodity enterprise. This are capital intensive. Though the regulated, with strong and well-financed margins than capital-intensive projects,
means existing markets, insofar as they chemistry or engineering may be sound, incumbents who have established business and network effects of startups outside
are well designed, are often driving costs finding a willing partner and investor to practices and powerful institutional of the energy and cleantech space raise
to their lowest possible level already. New support pilot projects is time-consuming momentum. Regulators, responsible for the ceiling of scalability and revenue.
technologies take time to scale and reduce and often cost-prohibitive. Finding capital ensuring low-cost, safe, and universal When investors weigh trade-offs between
costs enough to be competitive. for the first pilot project is where these service, are understandably reluctant to projects, many prefer those with the
technologies often face the feared “valley experiment. And regulated monopolies highest ceiling.
of death.” Cleantech accelerator programs like electric utilities are uncertain as to
work endlessly to overcome that valley, how best to manage technological change
and there are many examples of success, in the industry. Many times, willingness
as well as failure, at that junction. of regulators and utilities to participate
requires deliberate cultural change,
something that startups don’t have the
time or resources to facilitate alone. I’ve
observed many regulators and incumbent
businesses being part of the solution, when
the opportunity presents itself.
1. SO, WHAT IS AN ACCELERATOR?!
84 85
For over 100 years monopoly utilities Decentralization distributes risk too. New technologies call into question the Innovation to drive a more resilient, less
(water, waste, energy, and others) have Whether the risk is cyber attack, EMP, existing business models of regulated resource intensive, less environmentally
been highly vertically integrated and or extreme weather, new technology can monopolies. Integrating new technologies harmful, and less costly system is a noble
centralized. New technologies offer the support a more resilient system that can and services into existing businesses endeavor, and one with the promise to
opportunity for more participation in the isolate incidents or isolate failure points. often necessitates the development of new ensure the sustainability of human and
design of these critical systems, and business models and regulatory regimes natural systems long into the future. It’s
allow customers to take more control and to better align public and private interests, hard work, but someone has to do it.
ownership in these distributed systems. and disruptive businesses help inspire this
conversation and change.
1. SO, WHAT IS AN ACCELERATOR?!
PATRICIA CHIN-SWEENEY
Senior Partner & COO
86 @ I-DEV International 87
WHAT'S UNIQUE ABOUT ENERGY ACCELERATION / CLEANTECH?
RYAN WARTENA
President & Director of Product
88
CHRISTOPHER JOHNSON @ Growing Energy Labs, Inc. (GELI) 89
COO
WHAT'S UNIQUE ABOUT ENERGY ACCELERATION / CLEANTECH?
STEFAN HENNINGSSON
94 Senior Adviser Climate Energy & Innovation 95
@ WWF Sweden
WHAT'S UNIQUE ABOUT ENERGY ACCELERATION / CLEANTECH?
96 97
19
Studies on accelerators have found that programs accelerator that’s considered to be among the best
in “dense entrepreneurial networks” (i.e., more early in the world. How did they do this? Top of the list is
IT'S TOUGHER FOR SMALLER MARKETS
30
Concentration Of Programs
SMALL (1-10)
If you are creating or running a program in an emerging or smaller MEDIUM (11-20)
LARGE (21-30)
market, ask yourself: what natural advantages and resources do you
VERY LARGE (OVER 30)
have available?
Also, if you’re in a smaller market and you don’t have a program near you, there are lots
of great online options. Y Combinator is launching a massively open online course called
Startup School, and lots of programs post their content for free, including 500 Startups. Source: California Business Incubation Alliance (2016), California Tool Works: Incubation and Acceleration in the Cauldron of Innovation.
1. SO, WHAT IS AN ACCELERATOR?!
OVERCOMING
BARRIERS FOR WOMEN SANDRA KWAK
98
AND MINORITIES CEO @ 10Power
Echoing Green Fellow & Rockstar
99
OVERCOMING BARRIERS FOR WOMEN AND MINORITIES
100 Rather than trying to fit women into the Generosity. The money is pooled together “We need more women entrepreneurs who NGOs working with children and on water 101
existing systems and level the playing field, and loaned out at 0% interest to five women- hold a dual focus on creating a better world purification centers preventing cholera and
models like SheEO are creating an entirely led ventures selected by the Activators. All and making money,” writes SheEO founder dysentery, bringing clean water to families
OVERCOMING BARRIERS FOR WOMEN AND MINORITIES
Women of color get 0.1% of venture capital, I created 37 Angels as the network I would have
but as my fellow investor Denmark West likes wanted to pitch when I was a founder, and also as an
to say, “Greed is greater than bias.” I don’t think angel network I wanted to be a part of as an investor.
investing in women will become mainstream until We have a 1-month in-person boot camp, and an 8-week
we prove that it is lucrative. online boot camp that activates new investors by taking
them through the entire deal flow process.
Continue
1. SO, WHAT IS AN ACCELERATOR?!
104 Our secret sauce is, in a word, EMPATHY. There is a nice virtuous cycle built Our process for founders In terms of the value-add 105
into this. The best founder referrals come from other founders, so this also is as follows: we bring to investors:
improves our deal flow. Plus, it’s simply the right thing to do.
OVERCOMING BARRIERS FOR WOMEN AND MINORITIES
• We treat founders the way they want to be treated and the way they should be • Founders pitch, and we then spend • Education: Given that my day job is education
treated. 4 weeks in diligence. (I’m the CIO at Columbia Business School),
• Founders receive a funding decision I knew I wanted an angel network where
• We are helpful even if we don’t invest: we make decisions quickly and
(usually between $50K and $200K) continual learning was core to the network.
communicate those decisions to founders.
within 4 weeks of pitching. So not only do we train new angels through
• If it’s a no, we tell them 15 minutes into a call: we don’t say “it’s too early” an investment boot camp (37angels.com/
(which investors love to say!). bootcamp), but we also have monthly lunch
and learns on topics like Bitcoin, digital
literacy, and venture math.
1. SO, WHAT IS AN ACCELERATOR?!
Managing Director
@ CalCEF & CalSEED
OVERCOMING BARRIERS FOR WOMEN AND MINORITIES
Continue
1. SO, WHAT IS AN ACCELERATOR?!
Demographic
DemographicGroups
GroupsSupported
Supported
By Incubation Programs
By Incubation Programs
in low-income communities)
Social Entrepreneurs 7%
• Increase access to green technologies and
resilient infrastructure in underserved and Low-income Entrepreneurs 6%
low-income communities
Native Americans 4%
• Create health benefits and economic
opportunities in heavily polluted communities Youth 4%
Note: Incubators
Source: JPMorganmay focus
Chase & on
Co.more than(2016),
and ICIC one demographic group and
“Creating Inclusive percentages
High-Tech do notand
Incubators sum to 100%. Source:
Accelerators: to L. (2012). NBIA
Knopp,
Strategies
Research Series: 2012 Rates
Increase Participation state of Women
the business incubation
and Minority industry. National Business Incubation Association, p. 12.
Entrepreneurs.”
Note: Incubators may focus on more than one demographic group and percentages do not sum to 100%. Source: Knopp, L. (2012).
2012 State of the Business Incubation Industry. National Business Incubation Association, p. 12.
SHOULD YOU
JOIN AN
02
ACCELERATOR ?
There’s a fair chance you picked up this book to answer this single question. I
feel you. I’ve been there as an entrepreneur, wondering what kind of fun house
I might be walking into, what part of my soul I was selling off, and having that
little twinge of social anxiety about committing to spending a whole bunch of
time with people I don’t know (who might be smarter than me – eek!). I’ve also
sat on this decision with many a company, talked them through the issues and
helped them decide. Let’s start generally, then get more specific.
Generally, do it. Game it. Get after it. As we saw in the “Do Accelerators
Actually Work?” section, the odds are forever in your favor to join a program.
Get into the best program you can, and then hustle – your tenacity, focus,
and dedication can tip the scales, and make all the difference. I’ve seen this
first-hand while running many programs: the most engaged and ambitious
companies do the best. But that’s easy to say, hard to do. And there are a ton of
factors that go into the decision to join a program. Let’s parse them, using the
Accelerator Decision Calculator to break down the issues.
2. SHOULD YOU JOIN AN ACCELERATOR?
Accelerator Decision
Accelerator Decision Calculator
Calculator
REASONS
TO JOIN AN
Think about this in terms of the investment amount/ how much runway this gives
REASONS Funding
you. Generally, this is nice money to have, but it will not make or break your company.
TO JOIN A
PROGRAM
ACCELERATOR
112 113
This is important. Ask the program who their circle of investors are, who comes to
Intro to other investors their demo day, etc. Ask the alumni of the program and look for fliers/invites/decks
from previous events and demo days to really vet this.
SHOULD YOU JOIN AN ACCELERATOR?
Think about this in terms of your work hours x efficiency/strategy (including mental
Skills training health/stress). Ideally, you leave the program being a more effective leader, strategist,
and employee.
Important for guidance, avoiding pitfalls, and further introductions to customers and
Advisors investors. Remember that your contacts are always either building or destroying their
social captial with intros.
Important for building your network/potential collaborators, future hires, and making
Peers
you feel less crazy/lonely as an entrepreneur.
Funding
Verification / Getting into a program with a good reputation communicates that you're serious,
stamp of approval and some what vetted. This increases your ability to make connections, raise money, etc.
Things like the reputation of the program, strength of the alumni and mentor Cash is financial energy, and usually somewhere near the top of
Bonuses
network, industry specificity, and how much energy you can put in are all bonus factors.
the list for reasons to join a program. See more in the “Funding and
Grants” section in part 3, but the flavors are generally investment
This is a big factor, but make sure you're being logical and not emotional/sentimental for equity, or a grant with no equity taken.
REASONS Giving away equity
about it.
TO NOT
In terms of the traditional cash-for-equity model, this comes
Think about this in terms of how many hours you will spend on the program, including
Wasting time/ opportunity cost
the program time, time spent doing the application, time spent travelling or moving to in many forms. Some programs have a range and each deal is
of not doing other things
a new location. negotiated (Elemental Excelerator, for example, is 1%–6%). Others,
like Techstars and Y Combinator take a standard amount (6% and
Bad advice/Not being Might you get bad advice and be taken of track? Absolutely. Vet the program, its track
understood record and its staff. 7%, respectively) from every company. EnergyLab Accelerator in
Australia takes between 1.25% and 10%, depending on the track.
From: Accelerate This! A Super Not Boring Guide To Startup Accelerators And Clean Energy Entrepreneurship.
2. SHOULD YOU JOIN AN ACCELERATOR?
114 115
What’s fair here, and what can you expect? Also, if company, or something that makes it less risky, Intros to Investors Intros to Customers Skills Training
REASONS TO JOIN AN ACCELERATOR
116 117
JEFFREY GOLDSMITH
Marketing Strategist Extraordinaire
118
“What’s the benefit?!" KAT MANALAC 119
Partner @ Y Combinator
REASONS TO JOIN AN ACCELERATOR
JUSTIN ROSENSTEIN
Co-Founder @ Asana When I thought about out-of-the box and insightful entrepreneurs for this
book, my mind went right away to Casey Fenton. You may know him as
Here’s how I recommend turning your ideas into reality: the creator of Couchsurfing.com, a massive global network of travelers
and adventurers. He’s also the creator of Mast.ly, a tool for entrepreneurs
120 1. Clarity of Purpose. Start with your mission and 3. Inner Clarity. Manifesting big ideas 121
to track and reward employees with equity. He’s a total brainiac who is
vision. Take the time to author a succinct description is hard. Find the deep motivation
constantly learning and synthesizing. I had the pleasure of working with
of what you’re trying to do, and what the world will and community that will keep you
Casey on a project; it was never boring. At the end of a workday at our
REASONS TO JOIN AN ACCELERATOR
Mission
We got into the Founder Space accelerator for Mast.ly and wanted to
Strategy
pay them $5K for the optics of it – we wanted their seal of approval – but
Company-Wide Objectives the community was a big part of it too. It was great for team building, with
Business Product Internal all of us learning together and having a shared powerful experience. You’re
Objectives Objectives Objectives
the sum of the five people you hang out with, and we wanted to be with
Key Results
great people. Here are three key things that make successful enterprises:
Projects
Continue
2. SHOULD YOU JOIN AN ACCELERATOR?
122
1 2 3 123
Gaining access to a group of like-minded entrepreneurs 5.03 Often reliant on match with subject areas
in call for proposals
Awareness and credibility ((e.g., association with a recognized program, press/media exposure) 5.05 Slow approval process
Government funding Don’t lose equity
May require relocation or come with other
strings attached
Question asked: The following are some of the potential benefits that are typically associated with entrepreneurial accelerators. Please Often bureaucratic reporting procedures
rank these benefits in terms of how important they are to your venture’s development and success.
Source: Social Enterprise @ Goizueta and ANDE (2017), “The Entrepreneurship Database Program at Emory University: 2016 Year-End Data Summary.”
Friends and family investment Can be quick Emotional pressure
Source: P. Miller and K. Bound (2011), “The Startup Factories: The Rise of Accelerator Programmes to Support New Technology Venture,” NESTA discussion paper, 29.
2. SHOULD YOU JOIN AN ACCELERATOR?
126 127
REASONS TO JOIN AN ACCELERATOR
ACCELERATOR This is usually at the top of the list, sometimes for Especially if you’re concerned about the quality of I’ve heard quite a few stories of entrepreneurs being
good reasons and sometimes not. I’ve found that the program or how much value you’ll get from it, sent down rabbit holes pursuant to the whims of
there’s a lot of mental accounting that goes on here this is a big one. Some programs are a pretty light personalities in the program. It’s not common,
(thinking of value in relative rather than absolute touch, with maybe 10-15 days of your time, plus but it can happen and is something to look out
terms), since it feels so darn personal to have travel. Others, like Techstars, are a solid 90 days, plus for. As always, consider the source, and use Carl
someone else own part of your sweet baby enterprise, travel. That matters. Think about this in terms of how Sagan’s golden rule: extraordinary claims require
maybe for the first time. Totally understandable, many hours (including cost of moving and time) you’ll extraordinary evidence. Long story short, yes, bad
but you should be dispassionate and Spock/Data- spend, and what you would be doing otherwise – in advice is a thing, and people can have their own
like about this. Generally, it’s better to own a little other words, the opportunity cost. Yes, this is flirting motivations (trying to please an outside partner or
something than a lot of nothing, so be open... but with the counterfactual (the multiverse of realities funder, for example), but generally accelerators align
shrewd. you’re not in), but you have to go there. their success with yours in multiple ways, and just
want to help.
2. SHOULD YOU JOIN AN ACCELERATOR?
HOW TO FIND
AND VET A
128
Techstar’s “Equity Back Guarantee” PROGRAM 129
REASONS TO JOIN AN ACCELERATOR
1 2 3
Here are the details, found on their website:
• The EBG may be exercised at any time after the final day of the Program (Demo Make your list. Narrow it down. Talk to alumni.
Day for those programs with a public Demo Day).
• The EBG will automatically terminate early upon (1) the closing of a financing
(equity, convertible notes, SAFEs or a combination thereof) with aggregate Use tools like Are you willing to travel? Do Companies that have been
proceeds to the company in excess of $250,000 that occurs after the date of GALI (galidata.org/about) they require you to, for a little through programs are, in my
the signed Letter of Intent to participate in the Program; or (2) the sale or New Energy Nexus or a long time? Narrow by experience, brutally honest about
acquisition of the company. (energynexus.co) your industry and stage. Is their experience as long as they
Conveners.org’s Accelerator this something your audience feel that what they say will be
Selection Tool will understand...? kept in confidence. So become
(accelerator-selection-tool) friends, get the scoop, and do this
Gust (accelerator_reports/2016) for a good sample size, ideally for
and good old Googling. companies that are as similar to
yours as possible.
2. SHOULD YOU JOIN AN ACCELERATOR?
We organized the activities of an accelerator into the Accelerator Generator – a graphic layout of all the
activities and structures that make up a program. At the end there are blank Generators for you to fill out
so you can noodle on your program’s design. Lastly, the “How To Build an Accelerator” chapter will do
just that, and give you a step-by-step approach for creating (or re-creating) your program.
3. UNDER THE HOOD OF ACCELERATORS
Accelerator Generator
134 135
STEP 1:
PIPELINE /
UNDER THE HOOD OF ACCELERATORS
A fundamental part of any program is building a numbers and high-quality applicants. The better
“pipeline” of companies that you want to apply to your the companies, the better the program. The more
program. A pipeline effectively gets entrepreneurs/ companies that apply, the more you can pick and
companies onto an internal list and into your choose in order to balance the cohort.
Business Model: How do programs pay the bills? customer relationship management (CRM) or other
system. Once you have your list of companies and It was amazing to see this in action at some of the
applications open, you commence your outreach to programs we’ve worked with: huge spreadsheets with
get them to apply. Since pipeline and outreach are intel on hundreds of companies gathered from web
two sides of the same coin, we group them together searches, conversations at conferences and referrals
Ecosystem Building/Stakeholders: How do the accelerators advance their field? here. from other companies, mentors, and partners. Even
the best programs still work to get great applicants.
Suffice it to say, most programs don’t just open up
applications, kick back, and wait for companies Here are a few of the most effective methods
to come rolling in – they hustle to get significant programs use to attract companies:
From: Accelerate This! A Super Not Boring Guide To Startup Accelerators And Clean Energy Entrepreneurship
3. UNDER THE HOOD OF ACCELERATORS
Programs advertise on platforms like Facebook, Programs use events like classes, lectures, and / 4 0/ 04
Twitter, newspapers, partners’ mailing lists, and parties to build their email list, get attention, attract
traditional media outlets. In my experience running mentors, investors, potential team members, and
social media strategy, we’ve found Facebook ads to more. The fairly sound logic here is that the greater
Source: Based on New Energy Nexus Survey data, November 2017.
be incredibly effective, especially on a dollar-for- the name recognition a program has, the stronger Note: Survey of 32 clean energy accelerators from the US, Asia, Africa, Middle East, Europe, India, and Australia.
dollar basis, with clicks to websites from a targeted the applicants will be. For entrepreneurs attending
audience coming in at around three US cents/click. events… yes, the programs are watching you and
being super judgy, so behave accordingly.
3. UNDER THE HOOD OF ACCELERATORS
ANDREW CHANG
4 5 6
Traditional media Mailchimp Timing
@ New Energy Nexus
We pitched to traditional media We used mailchimp to manage We sent outreach emails at
Free Electrons & Powerhouse
outlets, tech bloggers, and our list, and build subscribers optimal times depending on their
138 139
energy enthusiasts – a story through a button on our site time zone. Little things like that
by Huffington Post, New York can make the difference.
Here is how the Free Electrons team did outreach in 2017: Times, Forbes, etc., really shows
STEP 1: PIPELINE / OUTREACH
7 8 9
1 2 3 Ads Meetings Follow up
Define objectives Content is king Toolkits
We made Facebook ads to We scheduled meetings with Follow up, follow up, follow up
target specific markets that are specific startups that were until startups say no. Sometimes
Once the scope of the program It needs to tell the story of why We knew that our networks
known for a density of cleantech interested in the program and you have to sell something, even
was established between the this program is unique. We were a key asset. We developed
startups, like Silicon Valley, Tel spent time encouraging them to if it’s in people’s best interest.
international utilities and developed social media banners, shareable marketing toolkits and
Aviv, etc. apply. Some prospects require a
program partners, we met as posts, key selling points/value shared with the utility marketing
bit more hand-holding through
a team to define our outreach proposition of the program, teams and network partners to
the application process.
objectives and develop the promotional videos, interviews promote on their media channels.
promotional strategy. Things we with the utilities and accelerator We engaged more than 100 other By the end of this process,
considered: What was the content
we would promote? Frequency –
partners. clean energy organizations,
incubators and accelerators. 10 11 we took a totally new
program and ended up
how often would we have touch We continually checked in with
Focus Countdown getting over 400 applicants
points? What was the content partners to see if they were
schedule? Channels – how would indeed promoting the program from all over the world and
As the deadline for applications We created social media banners,
we reach entrepreneurs? – people have a lot on their
got closer, we focused outreach emails, etc., saying when there creating a best-in-class
plate, so you have to maintain
efforts to our short list of strong were 2 weeks, 1 week, 5 days, 3, program, right out of the
mindshare.
candidates for the program. 2, 1, etc. gate.
3. UNDER THE HOOD OF ACCELERATORS
DAWN LIPPERT
KEVIN BRAITHWAITE
Founder & CEO
@ Elemental Excelerator VP Global Programs
@ Cleantech Open
cleantechopen.org
The key is focusing on the quality over quantity
140 141
of pipeline and articulating exactly what kind of
companies you’re looking for.
For the GCIP (Global Cleantech Innovation Programme) accelerators
STEP 1: PIPELINE / OUTREACH
What are your best three channels for outreach? The number one way we hear about companies these
STEP 1: PIPELINE / OUTREACH
Criteria: Highly focused on team and opportunity; looking for full-time founding team; team focus; team background and dynamics; prototype required.
Most programs have a published set of criteria that spells out the kind of companies/projects
STAGE 1 they are looking for. One interesting example is The Buckminster Fuller Challenge, which has a
146 “systems solutions” lens. The idea is that point-source solutions often have unanticipated negative 147
consequences, and thinking in systems can ameliorate this. The epic track record of the Challenge
THE ROUGH CUT backs the claim up. Here is their secret/not secret sauce for finding such great projects:
STEP 2: DUE DILIGENCE
If programs do a good job with pipeline Companies typically get rejected at this stage for a Comprehensive The project applies a whole-systems approach to all facets of the design and
building and outreach, they end up number of reasons: implementation process and aims to simultaneously address multiple
having way more applicants than they goals, requirements, and conditions.
can handle, so the first stage tends
• Not filling out the application completely or competently,
to focus on weeding out the obviously Anticipatory The project factors in critical future trends and needs as well as the projected
leaving questions blank or not answering the questions asked.
unsuitable candidates, usually getting impacts of a project’s implementation in the short- and long-term.
the applicant pool down to around • Application materials that look sloppy, cheap, or are riddled
25% of its original size (going from 400 with spelling and grammar mistakes. Ecologically The project reflects nature’s underlying principles while enhancing systems that
applicants to 100, for example). • Not being the right fit in terms of industry, company maturity/ Responsible support life on Earth.
stage or societal impact potential.
Feasible The project demonstrates proof-of-concept and relies on existing technology and/
• Straining credibility, in terms of basic science (people: there
or proven science, has a solid team in place, and/or demonstrates a convincing
is no “free” energy) or basic business strategy (don’t predicate
capacity to implement the project.
your success on selling to 100% of humanity).
• Weak team or weak description of team. You need to convince Verifiable The project is able to withstand rigorous empirical testing and provide evidence
the people reading the apps that you can pull off what you’re for potential or actual positive impacts while making authentic claims.
aiming to, in terms of technical and business skills, and
dedication to the enterprise (entrepreneurship is hard and Replicable The project is able to scale and be widely adapted to similar conditions
requires dogged commitment). elsewhere.
3. UNDER THE HOOD OF ACCELERATORS
148 149
STAGE 2
AVARY KENT
STEP 2: DUE DILIGENCE
The next phase typically tries to get the numbers down to a From my experience with Echoing
short list, which is about two times the size of the cohort. So Green, Relay Foundation, and others, there is
you’re now going from 100 companies down to around 20 for
the rough cut, which gets rid of 10%–20% of
a final cohort of 10 companies. You’ll end up putting a lot of
work into these companies in the next phase, so keeping the applications as just a straight up no, but then
short list lean and focused is important. Programs often use there is a period of getting a wide network
skilled volunteers and/or technical advisers to weigh in and of judges to help review to create your short
validate scientific or technical claims. list, which are the ones that then get a deeper
level of due diligence.
Most programs use a system like Fluid Review, F6S, or a
Google doc with vectors and scores, to coordinate this.
3. UNDER THE HOOD OF ACCELERATORS
STAGE 3
INTERVIEWS, AUDITS,
AND REFERENCES
STAGE 4
150 151
STEP 2: DUE DILIGENCE
Final stage! All of the metrics have been collected, moving them from left to right, from “unsure” to
• Is the founding team who they say they are, and • Are there internal conflicts or other things that interviews completed, and now it’s down to brass “for sure”/definitely in the program. This proceeds
do they know what they are talking about? should be known? tacks of who will get offers to be in the program. At until we feel satisfied that we have a cohort that
this stage, it’s often not just numbers – programs meets the goals and requirements of the program
• Do their references and customers know and • Are they are open-minded and coachable?
typically strive for a “balanced” cohort, so other and feels balanced. The marketplace is a nice
endorse the company and founders? How well do
• Does the founding team understand the factors come into play, like industry/customer approach because it gets everyone’s voice in the
they really know the company?
competitive landscape? Do they have an (avoiding situations where two companies directly room, and you end up walking away with a more
• Does the founding team understand what it is awareness of who else is doing what they do? Do compete), gender balance, maturity of companies, democratically/hive mind selected cohort.
they’re getting into? Programs can be a very they understand who has tried and failed, and personalities and more. If you’re planning to spend
intense experience, and you want to make sure why? intense weeks or months with a group of people, All told, the process from tip to tail typically takes
founders understand this – it’s not good for a there’s more to consider than just aggregate scores. 1–3 months. A 2017 survey of New Energy Nexus
• Do they seem fun to work with?
company to drop out halfway through because of It gets pretty subjective. members showed that the average number of
misaligned expectations. • Are their financials in order? If there are
candidates a program accepts into their cohort
irregularities, what is the explanation for them?
• Can they pitch, be presentable and cogent? In programs I have been a part of, we have used a is between 10% and 30%, with some programs
The program will end up vouching for these • Are there issues with the underlying technology, “marketplace” approach – each company’s name accepting as many as 40% and some programs
companies, so they need to have game and be in terms of credibility, product/market fit, goes onto a sticky note on the wall and we debate accepting as few as 5%. Y Combinator hovers
able to demonstrate grace under pressure. licensing, patents, etc.? the merits and challenges for the companies, around 2%.
3. UNDER THE HOOD OF ACCELERATORS
We have two sides of due diligence going simultaneously. Free Electrons Due Diligence:
One is very much about the company, the quality of management,
the financials, the technology, track record. The other is about the In designing the selection process for Free Electrons, the
market and what is needed on the ground. We run a community challenge was to align eight very different utilities with varying levels
“marketplace” process with utilities, policy makers, and potential of experience in working with startups. At one extreme, there was a
customers to understand what really has pull from the market. utility with a decade of startup experience and five structured innovation
programs, and at the other extreme was a utility that had only done one
By the time we get to a cohort, we have companies that are startup deal and had no set innovation team. We had to create a process
complementary and can add value to each other, not just in terms that worked for everyone.
of technology but in terms of skill sets and networks.
Here’s how we organized due diligence at Free Electrons:
Continue
3. UNDER THE HOOD OF ACCELERATORS
Outreach
• We used a customized Smart & Simple Advice Each partner came up with their own top 30
portal (a grant management tool that No need to customize an app, existing list and put the top 3 in order. We combined
154 was far from optimal). ones like F6S do the job well. these to reveal overlaps. A big consideration 155
• We had a marathon, 5-day final process interviews in 1.5 days, all done using
Downselect
with 3 days of due diligence, 1.5 days Zoom video calls.
of interviews, and a half day of final • Finally, we had a “Marketplace,”
• Each partner went through all 300 Advice: Only assess what’s truly important selection. facilitated by Ryan Kushner and team at
qualified applications (of 450 total) – having too many criteria creates
• Due diligence phone calls were done Elemental Excelerator. We really wanted
using a scorecard. unnecessary complexity and takes too
mostly by accelerators, but some utilities to empower the utilities (who ultimately
much time to score. Also, don’t rely on score
did participate, which was helpful and would be doing the deals) to choose, so
alone – unless you can design bulletproof
informative. we arranged categories on the wall and
criteria that can’t be interpreted differently,
• We broke into two groups to do interviews debated until we had our cohort!
there will always be some aspect of
subjectivity. concurrently so we could do all 20
3. UNDER THE HOOD OF ACCELERATORS
156 157
We have a three-stage process: We use F6S, a great open source tool with
basic evaluation parameters. Then we break down
1
Interested startups fill out an online application every application down into three or four pieces.
form on F6S. Different groups evaluate different aspects. For
our program Powerstart, we get 300 applications
and have internal and external experts run basic
2
The most promising applicants are invited to an
screening. Then we do a face-to-face evaluation
in-person interview where we get to know the
process, and interview them in person, over the
founders and assess whether they are a good fit
phone, or online.
for the program.
3
A small number of applicants are then invited
to pitch to an independent panel of experts who
assess the business potential.
3. UNDER THE HOOD OF ACCELERATORS
FREERK BISSCHOP
Smart Energy Program Director
@ Rockstart
160
What is your process for What is the #1 most important aspect 161
Will: “Will you be a Can: “Can you actually May: “May you play
successful entrepreneur?” do this?” Many would-be here?” In the energy
Here we use tools such entrepreneurs want to start and engineering sector,
as Gritt Scale or thinking businesses in the energy many trades require
preferences, psychometric sector without the requisite legal certification. If the
and values assessment to technical knowledge. It entrepreneur does not have
determine the likelihood of is critical to verify that the requisite certification,
entrepreneurial success. entrepreneurs actually odds are against any future
possess the technical skills success.
required for the business
to succeed.
3. UNDER THE HOOD OF ACCELERATORS
KAT MANALAC
164
Partner
@ Y Combinator SERVING THE 165
REJECTED AND,
Most programs we talk to and support don’t entrepreneurs, right? The generalized principles
Hacker News - a hack in and of itself
166 fully take into consideration that, yes, they run a of startups state that first-time entrepreneurs 167
program, but they are also an amazing honeypot are making their first baby steps. Second-
that attracts a motivated, self-identified time entrepreneurs are more experienced, and
community – and the companies in the program third, fourth, and so on are even better, with
SERVING THE REJECTED (AND WHY CARE ABOUT THE REJECTED?!)
A great example of this is Y Combinator’s Hacker News. It’s a basic, Reddit-style news/
discussion board where the YC community posts and upvotes. It keeps entrepreneurs in
the YC orbit even if they don’t get into the program, which maintains mindshare, goodwill,
and future leads for YC. Hacker News is a hack in and of itself really, since all of this takes
minimal staff time and budget. YC gets 7,000 applicants a year. With a 1.5% acceptance
rate, that makes it harder to get into than Harvard (which is about 5%). The other 98.5% plus
thousands of others in the startup ecosystem? You guessed it: audience for Hacker News.
Source: news.ycombinator.com
3. UNDER THE HOOD OF ACCELERATORS
STEP 3:
PROGRAM Equity Is The Most Common
Investment Instrument
168 Once companies are accepted into the program, it’s game time. What the 169
program looks like varies widely – it can be all in person, all online, or some Among the 91 respondents who provide direct
combo of the two. It can be high touch, low touch, all technical, all business, investment to participating ventures, about half
or communications-focused. This makes sense, and flows from the fact that make equity investments, while less than 30%
STEP 3: PROGRAM
STEP 3: PROGRAM
programs generally address specific problems, or opportunity spaces, with their provide
Ehksdq grants, quasi-equity, or debt.
own company stage foci, and this determines what the program time is spent on. FULL SAMPLE HQ LOCATION IMPACT
Ideally the tool fits the job, and the program has spent intense amounts of time
ensuring that the program matches the goals. Read more about how to do this
and “designing backward” later, in the “How to Build an Accelerator” chapter. 5/$
With that in mind, here’s a breakdown of some typical program activities. 59%
4/$
51%
3/$
or grant (with no equity taken, also called “non- taken away from normal activities). An investment Dpthsx Fq‘msr Pt‘rh,Dpthsx Cdas Nsgdq
dilutive”) by the program itself. It’s also common to is a show of faith from the program and acts as a
have follow-on investments and connections made mark of legitimacy for a startup, especially from
to outside investors after the program is done and a well-respected program. Investment can have a HQ in High Income Country HQ in Emerging Market
companies are even more highly vetted. gravitational effect for other investment, with money
providing perceived de-risking and safe harbor for
other money. Source: GALI, 2016 Global Accelerator Survey.
Note: GALI surveyed 164 organizations headquartered in 41 different countries.
Do You Give Money to Start-ups? 3. UNDER THE HOOD OF ACCELERATORS
Competitions
32%
No
STEP 3: PROGRAM
STEP 3: PROGRAM
DESCRIPTION PROS CONS FINANCING COSTS EXAMPLES
Investments
12% 20%
28%
Convertible note
Startup can use their Low or no financing costs Not available to pre-revenue No or low costs Any money made from the
Grants Business business revenue to startups; revenue may not be normal course of business
Yes finance new ventures, such sufficient or stable enough for
32%
No
Source: Based on New Energy Nexus Survey data, November 2017. Startup receives financing Low or no financing costs. Long lead time for grant to Administrative costs Government clean energy
Note: Survey of 32 clean energy accelerators from the US, Asia, Africa, Middle East, Europe, India, and Australia.
Convertible note Grant in exchange for delivering Boost startup credibility. be approved; detailed funds (municipal, state or
28% impacts prescribed by the Many funders offer addition-
al support, connections and
paperwork, stringent federal)
grant-making body monitoring and evaluation
Yes
Yes access to other government
initiatives or opportunities. If
criteria. Multi-year grants
are rare
No. Can take royalty at a Startup receives financing in Interest rates can be very high Interest rates can be high Bank loans for SMEs; micro-
25 responses 56%
Clear obligations, as long
certain revenue level. But Debt exchange for an obligation –
e.g. scheduled payment to
as they are met, founders in developing markets; often
requires collaterals (e.g., your
financing institutions (MFI);
some crowd-funding initiatives
retain full control of the
has not happened yet. lender at a certain interest company/asset home); banks tend to be are set up as loans;
Yes rate conservative and may not be Peer-to-peer (P2P) lending;
A right to invest Emerging funding sources It depends on the source, These are often new, and It depends on the source Crowd-funding; impact
Hybrid that are hybrid or
cross-cutting
but ideally these are flexible
and entrepreneur-friendly
carry risk. Because of
unknown consequences
investors; initial coin
offerings, revenue financing,
traditional investors might some public-private
get scared away partnerships
STEP 3: PROGRAM
Minor Souce (<50% of total funding) Major Source (≥50% of total funding)
Corporate Involvement And The
Customer-Driven Accelerator
Corporates 21% 28%
0 5 10 15 20 25 30 35 40 45 50
174 175
STEP 3: PROGRAM
STEP 3: PROGRAM
Techstars is one of the largest and most respected
accelerators in the world, and it pretty much
Often the engagement with a corporation is through wanted to work with. This almost seems so obvious defines corporate involvement and a customer-
their venture or innovation departments, and these that it’s a tautology, but this approach makes a lot driven accelerator approach. Look at any list of top
business units use accelerators as a source of vetted of sense. The standard practice is that accelerator accelerators, and Techstars is on it. The number of
"deal flow" (investment opportunities), and as a way programs pick companies they think are good bets programs they run (about 40 a year) and breadth (from
to keep their finger on the pulse of what’s happening for the program, then shop them around at things fintech to cleantech to real estate to music) is mind-
in their field. In industries affected by technology like demo days. Free Electrons, and other corporate- boggling.
(which is most, if not all), change happens quickly driven programs like Techstars, flips this model on
and accelerators act as antennas to the outside its head and lets the customers drive the process, Here’s how it works: Techstars get a financial
world, keeping companies better informed about which generally ensures a tighter product/market commitment of $3M a year, for a minimum of 3
potential disruption or opportunities. There is also a fit, or in this case a company/customer one. A years, from a corporation, or group of corporations,
nice PR angle for the corporation, where they get to customer-driven accelerator can 5-10x your results. generally in the same industry, then Techstars takes
at least appear innovative. Programatically, this all It’s a simple design change that can have a huge it from there and runs the whole program, from
manifests in representatives of companies coming to difference for the program and the companies. outreach to demo day. This makes it super easy for
dinners, demo days, and pitches, and being seen as corporations, and prevents them from having to spin
a friend of the program. Our overall advice to people running and designing up their own program. Basically, they cut a check and
programs: identify the entities with economic (or get a fully kitted out program, the opportunity to put a
Free Electrons was a flavor of a corporate accelerator impact) self-interest in the companies coming finger on the scale in the selection process, and first
program that we designed specifically for the utilities through your program, and get them involved as look at pre-vetted, due diligenced companies from
in the program. Our approach was to let the utilities early as possible. Ideally they get involved in program all over the world. It’s a smart approach that works.
drive the selection process as much as possible (see design, but certainly in the company selection Of the 1,207 companies that have come through the
the details about this in "Due Diligence") and the process. Aka, let customers drive the process. program, 76% are still alive, 12% have been acquired,
result was that the utilities selected companies they and 12% have died, with a total of $4.7B raised.
3. UNDER THE HOOD OF ACCELERATORS
STEP 3: PROGRAM
The idea is, if you are the World Bank, for example, and
you come to us with the idea of building an accelerator,
we would do everything with you, soup to nuts. We would
first work to have a really good understanding of what
the industry looks like and who's out there from a startup
perspective, then we would be responsible for all of the
recruiting, the website and social channels for outreach,
staffing, demo day, and everything involved in the program,
Source: www.freetheelectron.com
3. UNDER THE HOOD OF ACCELERATORS
STEFAN HENNINGSSON
178 Senior Adviser Climate, Energy & Innovation 179
@ WWF Sweden
STEP 3: PROGRAM
STEP 3: PROGRAM
How do you connect startups with
corporates or investors?
FREERK BISSCHOP
Smart Energy Program Director
@ Rockstart
180
How do you connect startups 181
with corporates or customers? AUDUN ABELSNES
Managing Director
STEP 3: PROGRAM
STEP 3: PROGRAM
There are basically three flavors. @ Techstars Energy
Skills Training
STEP 3: PROGRAM
broadly across stages and industries:
Customer Discovery Value Proposition Workshops Thinking Lean Business Model Innovation
This is “getting out of the building,” as the Startup Closely related to customer discovery, this asks: How Inspired by the Lean Startup methodology. Sure, you might sell things, but how will you sell it?
master Steve Blank, creator of the Lean Startup are you describing the benefit/utility of your product Entrepreneurs tend to fall in love with a problem, Cash up front, freemium, over time with financing?
movement, calls it. Essentially, entrepreneurs talk to or service? Effectively, why should people use your then try to boil the whole ocean with a solution that Maybe you just take a cut of the money you save?
customers. This is not selling; this is listening and widget? Many companies fall flat here because what does a whole bunch of things at the same time: “My All great options, depending on the business and
trying to deeply understand the needs and challenges they think is valuable about their product is not what blockchain solution is going to provide traceability customers. The Business Model Canvas, from
of prospective customers, then going back and their customers care about. Especially in the tech for supply chains, be a micro-payments platform, Alexander Osterwalder's book Business Model
making sure the product or service matches. I’ve sphere, where things are new/emergent, this is a and work on the carbon market!” The Lean Startup Generation , is a great tool that helps entrepreneurs
done this in the format of a “reverse pitch,” where worthy exercise. helps you think through your product with a “build- sketch this out. The book itself looks at models of
entrepreneurs ask questions of their customers. measure-learn” loop. Effectively, listen to your everything from Nespresso to iTunes, laid out nice
For example, at a table partnering one utility and customers, do your best to build just what they ask and graphically. You can also check out the Lean
several startups, only the startups are allowed to ask for (and no more… often called a minimum viable Model Canvas, which is a variation on the BMC, which
questions – always revealing and a great process. product, or MVP), measure if it’s working, and go from frames business models more in terms of problem/
there. One thing at a time, testing as you go. solution, which is a bit more direct for some people.
3. UNDER THE HOOD OF ACCELERATORS
The Lean Model Canvas Sheel Mohnot is a partner at 500 Startups and runs
their FinTech and InsurTech programs. 500 Startups
has campuses all over the world and takes a hands-on
184 approach, with a ton of training. They also give a lot of 185
Key
Partners
Key
Activities
Value
Proposition
Customer
Relationships
Customer
Segments this info away for free on their website. And check out
their totally amazing flowchart that helps you navigate to
STEP 3: PROGRAM
STEP 3: PROGRAM
Problem Solution Unfair the information, based on where you are as a business
Advantage and what challenges you’re facing. Pretty cool!
Key Channels
Resources
186 187
STEP 3: PROGRAM
STEP 3: PROGRAM
Source: www.growth.500.co
KAT MANALAC
Partner
@ Y Combinator
188 189
We say that the only two things you should be doing during YC are
building product and talking to users. Everything else is a waste of time.
STEP 3: PROGRAM
STEP 3: PROGRAM
It’s a reasonably lightweight program. We don’t require entrepreneurs
to do anything. During the program, founders can do as many one-
on-one office hours as they want, and every 2 weeks there's a group
office hours where they keep themselves accountable – not only to the
partners but to the other founders in the group. During group office
hours, the founders talk about what two things they've accomplished in
the past 2 weeks, the two things they hope to accomplish in the next 2
weeks, and any bottlenecks or barriers they're experiencing.
At this point there have been so many companies that have gone
through the program, that we have now seen patterns. We can say,
“This is how other people have overcome that challenge.”
190 191
KEVIN BRAITHWAITE RENATO GALLI
VP Global Programs @ Climate-KIC Accelerator
STEP 3: PROGRAM
STEP 3: PROGRAM
@ Cleantech Open climate-kic.org
cleantechopen.org
192
TIEN NGUYEN 193
Commercialization Specialist
@ Vietnam Climate Innovation Center (VCIC)
STEP 3: PROGRAM
STEP 3: PROGRAM
FREERK BISSCHOP vietnamcic.org
194 MS. WENJUAN WU & MR. XIAOSONG LI Expand entrepreneurs’ horizon Enhance entrepreneurs’ capability 195
STEP 3: PROGRAM
and green/sustainable business to the business challenges of innovation,
opportunities, comprehensively understand communication, and operation
the strength and weakness of themselves,
to formulate solid theoretical and practical
Is there a virtual component to the program? foundations for business development
Do You
YouDoDoSkills
SkillsTrainings
Trainings
(For Example,
(For Example,Business
BusinessSkillls?)
Skills)?
196 197
25 RESPONSES
STEP 3: PROGRAM
STEP 3: PROGRAM
Office Space (About
Those TPS Reports)
4%
5% Xdr
Many programs offer their portfolio companies office In my experience, I’ve ended up going to accerators
Mn space. This is a key element of incubators, but less for demo days and evening events like cocktail hours
95% common for accelerators. The upside of providing an with accelerator-relevant content. Being in the
96%
office space is that you get to keep your companies program space has really helped me understand
close, see them more on a casual basis, and enable their vibe, style, and theory of change. Programs like
companies to learn from one another on a more ad Powerhouse in Oakland, CA, LACI in Los Angeles, and
hoc basis. Greentown Labs in Boston have a regular cadence
of events and build their physical space into their
A pretty common practice is to extend the use of a brands.
space by converting it to meeting and event space in
the evening, which helps programs get their name
out in the world and helps offset the main downside
of physical space: the cost.
Source: Based on New Energy Nexus Survey data, November 2017.
Note: Survey of 32 clean energy accelerators from the US, Asia, Africa, Middle East, Europe, India, and Australia.
3. UNDER THE HOOD OF ACCELERATORS
Is There
ThereAACo-working
Co-working Space
Space ForFor
Companies While
Companies WhileInIn
The Program?
The Program?
198 ACRE is a cleantech incubator in New York. It’s 199
STEP 3: PROGRAM
when they are ready, and going as they mature.
5% Xdr
Our program is flexible depending on
Mn
the company’s needs and growth. Every 6 95%
months companies are evaluated for further
support, graduation, or exit. Some of our
most successful companies took over 2 years, 66.7%
pivoting many times while incubated by ACRE.
Some found success quickly and outgrew the
space in under a year.
MORGAN BERMAN
200 201
Director of Business Development
@ Techstars North America
STEP 3: PROGRAM
STEP 3: PROGRAM
Techstars is a mentorship-driven accelerator. We want
to help startups really question all their assumptions and get
them to think through their business model. The ultimate goal
is that we want them to be able to do more in the 13 weeks of
Mentors
the Techstars accelerator than they would be able to do in a
year and a half of normal activity. At Techstars, we break our
program up into thirds.
Nothing replaces the wisdom of experience. There are lots of ways to slice this cake, but the
The first part of the accelerator is "mentor." We have Mentor
A good mentor can guide you through ways to design a mentor program generally fall
the many challenges and near insanity of into high-touch and low-touch methods, with Madness, where we bring mentors back-to-back-to-back to
entrepreneurship. Sometimes mentors make all the accelerator either curating relationships really help the startups question their business model and
the difference for a company, and become board and making individual intros, or taking a more assumptions, and to give them feedback and perspective.
members, investors, and friends. Alternatively, ad hoc approach, where mentors are invited to
mentors can become a source of frustration, events, and casual conversations ideally turn
The second third of the accelerator is really helping them
leaving the startup feeling unsupported and the into more formal coaching relationships.
mentor overtaxed and uninspired. As with most put their business model back together, based on the
things, solid mentor program design and clear mentor feedback, and the final third is helping them position
expectations are key. themselves for scale and the next round of funding.
3. UNDER THE HOOD OF ACCELERATORS
202 203
STEP 3: PROGRAM
Founder @ Sunfolding @ Sarebi (South Africa)
Accelerated at Otherlab & Y Combinator sarebi.co.za
204
KEVIN BRAITHWAITE JAMES TILBURY 205
STEP 3: PROGRAM
cleantechopen.org
Mentors are carefully assigned to a particular We have three different layers of engagement:
team and act as their advisors and champions.
Many of our mentors are in-country, often very
1 2 3
close to where the startup team is located so
that there is maximum face-to-face contact. We
have an increasing international community of
mentors who tend to help remotely, especially in
specific sectors and domains. We also focus on We provide tailored We email our mentor We run events for just
cross-region mentorship (i.e., Turkey to Pakistan, matchmaking, network monthly to mentors and the cohort
the US to South Africa, etc.) and hold our startup introducing founders to let them know what to allow for a bit of
award event, the Cleantech Open Global Forum, in mentors throughout the challenges the startups serendipity.
California each year. We also give annual mentor program. are facing and asking
awards for excellence based on feedback from our for assistance.
entrepreneurs and the mentor community.
3. UNDER THE HOOD OF ACCELERATORS
FREERK BISSCHOP Do
DoYou
YouEngage
Engage Mentors?
Mentors?
Smart Energy Program Director
@ Rockstart
206 25 RESPONSES 207
STEP 3: PROGRAM
every 2 weeks to keep them informed about
what is happening with the startups throughout
the program and they are in a separate slack
channel so they can exchange information with
each other and the startups.
Peer-to-Peer Learning
208 209
STEP 3: PROGRAM
STEP 3: PROGRAM
One of the more undervalued benefits of an slowly? Who had better relationships with their One interesting take on peer-to-peer learning is Lastly, I was on a accelerator retreat with Elemental
accelerator is being surrounded by peers. business units and deployed better projects? This was at Powerhouse, an Oakland, CA, co-working space Excelerator and we organized an “unconference,”
Entrepreneurs tend to be (rightly) laser-focused on critical info that really shaped the startups’ strategies. and seed fund supporting entrepreneurs building which sources conversation topics from participants.
hard skills and hard numbers, and this sometimes There was a softer side too – real friendships were software-enabled solutions for the clean energy There was a massive range – everything from
feels softer, and less important. It’s not necessarily formed, and a sense of community emerged. This industry. Every Wednesday, Powerhouse hosts Open deep technical cleantech stuff to business model
soft, nor less important, so it’s important to design came to the fore at the end of the program, when House, an informal community networking event conversations – but the most popular topic was
time for this into the program. the utilities planned to award $175K of prize money where people share their work and make asks and “dealing with founder depression.” The session
to their favorite of the 12 startups. The whole idea of offers to the other entrepreneurs and guests who had real, vulnerable sharing and the catharsis was
We took a very intentional approach to peer a prize didn’t sit well with the startups – it seemed come by. I’ve been to a few and have always been through the roof. Accelerators for the win.
interactions with Free Electrons. The first day of to be a potential wedge – so they made a pact to impressed by how simple and effective this is. After
the program, we had the utilities and startups meet share the award. Sure enough, BeOn, a startup from everyone stands up and gives their 30-second ask
separately, and we continued this format throughout Portugal won the prize and committed to share it with and offer, there is an immediate flood of helpful ideas
the program. Startups would share their experience the rest of the entrepreneurs. That’s love. and connections made.
working with the eight utilities: Who was ready to
move fast? Who was talking a big game but moving
3. UNDER THE HOOD OF ACCELERATORS
KAT MANALAC
Partner
@ Y Combinator
210 211
Demo Day
Having a demo day is essential. It’s For 3 months, founders are just building
STEP 3: PROGRAM
STEP 3: PROGRAM
the thing that everyone is gunning toward. and talking to users, and 10 days before
A lot of the founders say that YC is most demo day, we flip into fundraising mode.
Most programs have a demo day at the end of the
productive 3 months of their company’s Our financing and legal team will walk
program, an event where cohort companies pitch to an life because the stakes are high. We founders through all the documents,
audience. Imagine if So You Think You Can Dance? and have experimented with a bunch of other and then we go through rehearsal day
a board meeting had a baby – that’s a demo day. The programs at YC and found that if there is where founders practice their 2-minute
event is generally there to serve both the companies –
no demo day, there is a lack of focus. presentation in front of everyone, and we
introduce them to potential investors, partners – and the
program itself, so they can impress their value on their
give feedback. Most of those 10 days are
own partners, sponsors, investors, and future startups. During YC, we say absolutely don’t talk spent practicing, getting the presentation
There is generally beer, and they are fun. to any investors or potential funders until perfect, and figuring out a fundraising
right before demo day – just focus on strategy.
Y combinator, who pretty much invented accelerators as
building product. This is probably the only
we know them, put on the first demo day in 2005. Today,
they have have become massive, filling the room, and
time in your whole life you are going to
having an additional 4,000 investors watching online able to do that.
from all over the world.
3. UNDER THE HOOD OF ACCELERATORS
212 213
LEILA MADRONE
Founder
STEP 3: PROGRAM
STEP 3: PROGRAM
@ Sunfolding, Accelerated at Otherlab & Y Combinator
At demo day, there are usually about 450 At the end of demo day, investors stack rank Y Combinator’s lessons about how to pitch
investors there in person. We prioritize the companies they want to meet, and the are exceptional. I thought I was decent to begin
investors who’ve funded YC companies companies stack rank their investors. The with, but then I got to the end of it and realized
before, but any accredited investors can day after demo day is called investor day. how I was now 10 levels better.
watch the live stream online. At this event, each company sits at a table
and the investors come to them. Some You start with something rough and then you
About 4,000 investors watch the live stream, companies close their rounds that day, iterate and get ripped apart over and over again,
so now a lot of founders are raising from but for others it’s just the beginning of the and you watch other people doing the same
people who weren’t even physically in the conversation and the beginning of investor thing, which is really helpful. You just keep doing
room. Our software lets investors watch the due diligence. it for 2 weeks. I would go outside, work on my
2-minute presentations, press on the “I want next version, go in 2 hours later, pitch again.
to meet” button, and automatically share They know how to pretend to be bored investors.
their information with the founder. They are pros at giving you the “bored investor”
face – there’s not a better training.
3. UNDER THE HOOD OF ACCELERATORS
214 215
DAWN LIPPERT MS. WENJUAN WU AND MR. XIAOSONG LI
Founder & CEO @ Center for Green Entrepreneurship,
STEP 3: PROGRAM
STEP 3: PROGRAM
@ Elemental Excelerator University of International Business and Economics, Beijing
A good demo day should be enjoyable, After learning the knowledge and skills on green
and you should learn something. We have business opportunities, business planning, marketing
art and culture, and remind people why we strategy, HR management, and financing and revising
do the work we do. People are humans – their business plans, the entrepreneurs are invited to
we’re not just like data machines – so we present their ideas in front of a group of expert academics,
really think about the whole person. incubators, and investors. After each presentation, the
experts give feedback about optimization of business
model, team management, financing, operation, and
marketing. This is all to help the entrepreneurs identify
the loopholes in their business ideas, improve it for
sustainable growth, and practice their presentation skills.
STEFAN HENNINGSSON
Senior Adviser Climate, Energy & Innovation Do You
Do You Have
Have AA Final
FinalCelebration,
Celebration,Demo
DemoDay,
DayEtc.?
Etc?
@ WWF Sweden
216 217
22 RESPONSES
STEP 3: PROGRAM
about how WWF and our partners have identified
startups with the biggest climate and energy impact
potential.
STEP 4:
POST-PROGRAM
218
KAT MANALAC 219
The end of the program is the beginning of the next phase. Different programs have
different levels of involvement at this point, but savvy ones tend to recognize that a Partner
program’s success is tied to the companies’ successes, and create a very intentional
STEP 4: POST-PROGRAM
STEP 4: POST-PROGRAM
@ Y Combinator
plan for this phase, which is monitored and iterated on.
At Elemental Excelerator, we took the perspective that while companies were Forty-two percent of our founders
technically in the program for 12–18 months, they never really left. We dedicated a lot check in at least once a month to
of resources and people-hours into speaking to all our portfolio companies regularly, Bookface, our internal network, and it’s
tracking their progress, and seeing how we could support them with funding,
really very well used and well loved. When
corporate or utility partners, or anything that would help them. It’s a long-term
investment, especially in a regulated and hardware/software industry like cleantech.
you ask the alumni, they say that, long
term, it’s really the alumni community
that has helped them succeed.
Typical post-program activities
• Inviting alumni to events, which are typically • The offer of office space to graduates for free or a
also attended by current candidates, corporate discounted rate. This is a nice way to keep casual,
partners and investors. water-cooler-style track of companies.
• Continued access to the program’s private • Continued training, and opportunities to coach
networks, which provide connections to investors, current companies. Nothing replaces experience,
partners, and consultants. Techstars, for and inviting graduates back to mix with current
example, has an internal platform like LinkedIn companies is a great approach. At Elemental
that connects all the mentors and entrepreneurs Excelerator, we paid for all company CEOs to
from all their 40 programs, all over the world. come for a weekend in Hawaii – a great time, and
Y Combinator offers a similar platform for their a critical way to connect across cohorts.
whole community in perpetuity.
3. UNDER THE HOOD OF ACCELERATORS
Do You
Do You Give
Give Continuing
ContinuingBusiness
BusinessDevelopment
Development Do You
Do You Have
HaveAADigital
DigitalNetwork/Way
Network/WayFor
ForCompanies
Companies
Help After
Help AfterStart-ups
Startups Graduate?
Graduate? And Other Stakeholders To Communicate Online?
And Other Stakeholders To Communicate Online?
20 RESPONSES 22 RESPONSES
Yes
220 Yes 221
20% No
10% 27.3% No
Not yet Not yet
Nor yet, but planning to do it soon 13.6%
STEP 4: POST-PROGRAM
STEP 4: POST-PROGRAM
65%
59.1%
Do You
Do You Give
Give Continuing
ContinuingMentorship
MentorshipAfter
AfterThe
The Do You
Do You Have
Have A
A Work
Work Space
Space For
For Startups
StartupsIn
InThe
The
Program Ends?
Program Ends? Program After
Program After They
They Finish?
Finish?
20 RESPONSES 22 RESPONSES
Yes Yes
25% No 59.1%
59.1% No
15% Not yet
60% 40.9%
40.9%
Source: Based on New Energy Nexus Survey data, November 2017. Source: Based on New Energy Nexus Survey data, November 2017.
Note: Survey of 32 clean energy accelerators from the US, Asia, Africa, Middle East, Europe, India, and Australia. Note: Survey of 32 clean energy accelerators from the US, Asia, Africa, Middle East, Europe, India, and Australia.
3. UNDER THE HOOD OF ACCELERATORS
BUSINESS MODEL
Number
Any program, whether for-profit or nonprofit, has to for 5% of their equity. You’ve been SUPER lucky, and of alumni
companies
keep the lights on. So just like any other company, it in year 5, 10% of your 30 startups have been bought 0 20 40 60 80 100
has to have a business model. Accelerators should for $5M a piece. This means that you’ve put out
Y Combinator 1.642.2 566
know what the options are, and entrepreneurs can $3M over 5 years and made $750K back. Not good.
The Americas
benefit from understanding what the drivers and key Fund more startups at the same rate, and you’re not TechStars* 431.5 248
performance indicators (KPIs) are for the program, making any more headway. Something has to change AngelPad 73
as this shapes their psychology and choice of to make this make sense – namely, the sale price
500startups 153
companies. needs to be much higher. These companies need to
be sold for $20M a piece just to make your investment Seedcamp 110
The cash-for-equity model receives a lot of press money back, and this doesn’t include any of the
Europe
Startupbootcamp 88
and attention, but it’s actually a pretty tough way for program costs like staff and office space, and totally
OpenFund 8
programs to make money. All kinds of factors go into ignores opportunity costs and a host of other things.
this, like time frame – software and app companies Chinaaccelerator 31
Asia Pacific
hope for a 3–5-year exit, while 5–10 years is more The Economist reported in January 2014 that “a
SparkLabs 16
common for cleantech companies – but nothing financial picture of the industry is starting to emerge.
seems to tip the balance as much as how much the Jed Christiansen, who works for Google in London, Startmate Sydney 21
startup is sold for. tracks 182 accelerators which have nurtured more
than 3,000 startups. Between them, those have raised
Think about it: broad studies generally conclude that $3.2 billion in follow-on funding and generated ‘exits’
Source: Seed-DB Total of accelerators in network
90% of startups fail, though I find this to be a bit of worth $1.8 billion. This landscape is dominated by
an optimistic number since smaller, self-funded ones American firms, with Y Combinator and TechStars
generally slip through the cracks of surveys. Let’s say franchises leading the pack. This suggests that
that you fund 6 startups a year, giving each one $100K accelerators are a winners-take-most market.” Source: “Accelerators: Getting Up to Speed,” special report, Economist (January 16, 2014).
3. UNDER THE HOOD OF ACCELERATORS
BUSINESS MODEL
accelerators generally rely on outside money and other
activities that help them make money and stay afloat.
Outside funding: government and Outside funding: corporate Events Program and Office space
foundation grants application fees
This kind of funding is generally given on a first-loss Programs like Techstars lean on this heavily, charging Everything from small events to While less common, some Charging for desk space is a nice
or philanthropic basis, and is done so because the companies and then running programs for them. large conferences with larger programs like the Founder way to supplement income and
accelerator is seen as a tool for broader economic Some corporates opt to run their own programs, and ticket prices. Institute charge startups $2K maintain the community. Refer
growth by a local, state, or national government, absorb possible losses in the name of long-term for going through their program, back to previous space section.
or because it fulfills the mission of a foundation innovation. At Elemental Excelerator, for example, and many programs have an
or other charitable organization. For Elemental they cultivated corporations and utilities to be part application fee.
Excelerator, we were lucky to get money from the US of their Global Advisory Board, which gave them the
Navy, Department of Energy, and then the Emerson opportunity to weigh in on our selection process, have
Collective, the philanthropy started by Steve Jobs’ first look at our portfolio and other market intel.
wife, Laurene Powell Jobs.
3. UNDER THE HOOD OF ACCELERATORS
Five Funding
Five FundingProfiles
Profiles What Are Your 4 Main Sources Of Revenue?
What Are Your 4 Main Sources Of Revenue?
BUSINESS MODEL
Private company sponsorship 16 (61.5%)
National government funding 11 (42.4%)
27% 10 (38.5%)
Local government funding
11% Diversified
Investing in companies, engagement fees 1 (3.8%)
They ask big corporates to fund 12-month 1 (3.8%)
Market connection sevice is generating 1 (3.8%)
/ 4 0/ 04 1/
N = 139
Source: GALI (2017), “Funding Accelerator Programs: Questions from the Field,” 4. Source: GALI (2017), “Funding Accelerator Programs: Questions from the Field,” 4.
3. UNDER THE HOOD OF ACCELERATORS
Is Your Program Profitable? One popular model is to operate the accelerator as a nonprofit, and then have a for-profit
follow-on fund, which pays fees to the accelerator. This allows the accelerator to receive
grants and get nonprofit tax benefits, while the fund benefits from having the accelerator do
228 23 RESPONSES the scouting, due diligence, and vetting for them. Funds tend to operate on a “2 and 20” model, 229
meaning that they take an automatic 2% for managing the money, and then get 20% of the
profits, and some of this money goes to the accelerator for these scouting and vetting services.
BUSINESS MODEL
BUSINESS MODEL
Elemental Excelerator Fund One
8.7% Yes
In 2016, the Elemental Excelerator added a for-profit venture fund to create a hybrid nonprofit/
No
for-profit model. They went with a “0 and 30” model, which meant no management fee and
Not yet 30% of the fund profits going to the accelerator.
N/A
Just barely. Model is when we realize our Energy Excelerator EEx Fund One
37%
30% Carry
exits 5-7 years after a cohort. Just need to Nonprofit | dual-track program For-profit | follow-on venture capital fund
survive
25% Not as a whole 1% The fund is based on a 0/30 model;
14% Company
Equity $3M
there is no management fee, and 30%
of the fund’s profits go to support our
Private nonprofit side (the other 70% of
Funding profits go to our investors).
85%
fund as a nonprofit on medium.
medium.com/energyexcelerator
Public Funding
4/5 of which goes directly to
companies
Source: Based on New Energy Nexus Survey data, November 2017. Source: Elemental Excelerator (2017), Elemental Excelerator Impact Report 2015-2016, 19.
Note: Survey of 32 clean energy accelerators from the US, Asia, Africa, Middle East, Europe, India, and Australia.
3. UNDER THE HOOD OF ACCELERATORS
• Various check sizes, with an aim to diversify. This includes corporations, lawyers, individual
investors, and nonprofits.
230
• It took a year to research and create the fund itself, while also securing the $3M of capital. YES, BUT I 231
THOUGHT
• Ninety percent of the funds have been invested, expected to be fully invested by the end of 2018.
ACCELERATORS
1. The companies graduate the EEx program and remain in good standing.
2. The companies raise a minimum matching $300K from a qualified investor.
RUPESH MADLANI I know – easy to think so if you just read the news. It makes
sense: grab a bunch of companies, get a slice of each, and let
Former Equity Analyst @ Lehman Brothers and Barclays
the dollars flow in. That’s really just success bias, because
Co-Founder @ Global Sustainable Capital Management
while Y Combinator makes the headlines for big exits, you’re not
Co-Founder @ Bankers Without Boundaries
reading about all the thousands of other players in the space
(as Bill Clinton would say, “headlines versus trendlines”) who
In addition to providing an ecosystem and sense of community, are squeaking by, losing money or reliant on additional funding
to keep going. As we just showed, betting on companies getting
accelerators and incubators offer a passport to regular and ongoing funding
exits alone generally isn’t viable.
far beyond the earliest stages. By allowing full participation across the
timeline of a company’s evolution, accelerators and incubators are able to
reap the full benefits from their investment and market knowledge and allow
them to reinvest in their areas of expertise.
3. UNDER THE HOOD OF ACCELERATORS
JOSEPH SILVER
@ Urban Future Lab/ACRE
ufl.nyc
232
JAMES TILBURY 233
Are you a nonprofit or for-profit?
@ EnergyLab (Australia)
energylab.org.au
YES, BUT I THOUGHT ACCELERATORS WERE CASH COWS?
GOVERNANCE,
LEADERSHIP, AND KPIS
236 237
• What your funders want. Especially if this is a all the time by investors and grant-making
large organization like an NGO or bank, with an organizations about their metrics (both business
established set of metrics, this might be fairly and impact), so aligning with your cohort
well spelled out for you already. That’s great, but companies is a good option.
by the same token, that large org might not be
• Global metrics. Particularly for more impact-
very deep in the innovation game, so you might
focused programs, there are great opportunities
need to adjust significantly.
to get KPI inspiration from things like the UN’s
• What your cohort companies are tracking. Your Sustainable Development Goals.
cohort companies are likely getting hammered Source: Stockholm Resilience Centre
3. UNDER THE HOOD OF ACCELERATORS
239
HELMUT HERTZOG
GOVERNANCE, LEADERSHIP, AND KPIS
STEFAN HENNINGSSON
• Number of people out of energy poverty that now have
Senior Adviser Climate, Energy & Innovation
access to clean energy services, which is around 749,000.
@ WWF Sweden
• Job creation.
240 What are your main sources of revenue? • Positive changes in the national innovation cleantech 241
ecosystem in terms of policy, and finance.
Philanthropic and corporate grants, namely the Swedish Postcode
GOVERNANCE, LEADERSHIP, AND KPIS
242
JOSEPH SILVER STARLENE SHARMA 243
ACRE is owned by NYU, and managed in the We look for impact that includes development
department under the vice dean of innovation and and climate mitigation or adaptation. We support
entrepreneurship. The managing director is part of companies that are developing products or services
NYU’s Cleantech Initiative, and we have two program that have additionality/novelty, affordability,
managers, one community manager, one design lead, accessibility, and availability. The program expects
one assistant, and we have an advisory board appointed that by its end, companies should have a clearly
by the managing director. demonstrable product/market fit and the ability to
raise investment capital.
3. UNDER THE HOOD OF ACCELERATORS
KAT MANALAC
Partner
@ Y Combinator
248
ECOSYSTEM We tell founders at the very beginning of the
249
SHANA RAPPAPORT
Director of Strategic Programs
@ GreenBiz Group
250 251
Partnering strategically with things like renewable energy, clean TREVOR TOWNSEND
incubators and accelerators is an transportation and eliminating waste.
ECOSYSTEM BUILDING / STAKEHOLDERS
TIM WEST
Founder & CEO The 5 Key Ingredients to a Successful Hackathon
@ True West Ventures
252 253
Growing up, I always wanted to help people. It made me 1. Positivity Only focus on what’s possible. Never shoot down an idea.
feel good and I could tell it made others happy. So naturally,
when I discovered cooking, I fell in love with feeding people. 2. Accessibility Make the event on a weekend and financially affordable (but
ECOSYSTEM BUILDING / STAKEHOLDERS
Inspired by Facebook’s epic weekend hackathons, I helped 4. Diversity Invite a variety of folks with different skill sets, backgrounds,
launched the first Food Hackathon to great success: we levels of education, cultures, socioeconomic identities,
hosted 250 people from five countries and created the most races and ages, plus make it gender balanced.
exciting weekend-long horizontal learning environment I’d
ever experienced. Ideas were shared, connections were 5. Fun Celebrate working together for the greater good! Have
made, molds were broken and everybody had a great time great food, music, hacking-cheerleaders, prizes, surprises,
while we inoculated them with delicious, nutrient-dense, and exciting performances to keep everybody engaged and
and fair trade culinary delights. FoodTech quickly became working all weekend.
the hot new industry as others copied our model and began
hosting food hackathons all around the world. Please take this anecdote and these lessons to your
industry, your community, and your zone of genius. May you
In developing these events I learned many lessons (often the give rise to the positive social, environmental, and global
hard way) on what makes a hackathon successful. change necessary for our collective evolution. And may you
all feel good while making others happy.
There’s no doubt about it: running a program is a tough gig. Take the challenge of operating
one business, and now imagine that the business of your business rests upon other, less
HOW TO
experienced businesses. It’s hard, it’s a lot of work – and it’s incredibly rewarding.
For accelerator staff and leadership, my overall recommendation is to design backward from
the impact you want to have. Then, cross-reference that impact with your own capabilities and
BUILD AN
connections as a team, a sharp awareness of what companies in your industry and geography
need, where they fail, and the macro industry factors.
How do you do this? Get outside the building, ask good questions, listen, recruit appropriate
ACCELERATOR
self-interested partners, and always keep an eye a couple steps down the road. At Free
Electrons, we were on the lookout for disruptive companies that could hit the ground running
with the utilities, so we set a floor of $1M raised and a scalable-ready product. At Elemental
?!
Excelerator, they designed the two tracks to fill in two valleys of death, which were discovered
by talking to cleantech companies and accelerators. At the Center for Carbon Removal, we
held an investor day, did lots of listening, surveys, and interviews, and then we thought long
and hard about how to kick-start an entire industry (that doesn’t exist, but needs to if we want
to keep the world from runaway climate change, according to the IPCCC – sheesh!).
256 257
Figure out your goals, Look at existing models. Be customer-driven. Map your assets (and Pick good companies. Be willing to take risks.
and design backward. shortcomings) as a
HOW TO BUILD AN ACCELERATOR
I call this “reverse engineering” This book has tried to unearth Yes, you are smart and know a Your team has specific Kind of obvious, but worth stating. Just like startups, programs
from the results you want. some good ones, but you should whole lot of awesome things. capabilities and connections: Successful companies attract should be willing to try new
If your program goals are to intimately know what else has But, you’re likely not the target what are they… and where are you more companies to your program, things when it makes sense.
reduce dependence on fossil been tried, what has worked, customer for your startup… so falling short? Use the Accelerator which also brings in more grants, Create a culture where it’s not
fuels in various ways, how what has failed and why. A lack get out of the building and talk Generator to map all aspects of investors, and mentors. To have only acceptable but encouraged
will you do that, step by step? of awareness of the competitor to the people that are. What do the program, and highlight where good companies, you need good for founders to sincerely share
Perhaps you should spend your landscape as an enterprise or they need? What are they willing you are strong and where you are outreach and solid due diligence. what they’re struggling with.
time commercializing existing accelerator is never acceptable. to pay for? What do they maybe lacking. Then, build around what Don’t make people maintain a
technology? Or spend money not even know they need? Shape you have and make a plan to fill veneer of success where there
connecting cohort companies to your program and industry or in shortcomings with partners isn’t any – only when everyone
government initiatives or utilities company focus around these and team members. is comfortable admitting to
or corporations? What current needs and, critically, invite these struggles can people really pave
structures and programs can people to be part of your program the way to success.
you leverage? If you are purely – as sponsors, as shapers
profit-focused, what industry is of your assessment criteria,
growing, what do you personally as part of your due diligence.
understand and have the capacity You’re creating product/market
to do? What’s your strategy for fit with your companies, so fit
getting companies to join and the products/companies to the
fork over their own equity? markets/customers.
HOW TO BUILD AN ACCELERATOR?!
Accelerator Generator
Think about who your companies Think realistically about If your program is located
need to work with, chase them your program costs, and pad in an area without a dense
HOW TO BUILD AN ACCELERATOR
Governance, Leadership, and KPIs: How are decisions made? How do you judge success?
Now, let’s get our hands dirty and use the Accelerator Ecosystem Building/Stakeholders: How do the accelerators advance their field?
KAT MANALAC
FUNDING
MISSION SPECIALISM
260
Partner STRUCTURE 261
@ Y Combinator
What will your Will it have a specific How will it be funded,
accelerator do? focus? and what funding will
you offer to startups?
HOW TO BUILD AN ACCELERATOR
Programs At A Glance
263
Name of program. Founded what year?
PROGRAMS
PROGRAMS AT A GLANCE
Length and location of program - do you have to move?
Bonus!
Is there an industry/sector focus?
Here’s a quick look at some programs we’ve covered in the book so you
can see some of the fundamentals. Side note: it took a ridiculous amount
of time to get all these details from program websites. Imagine being an Stage focus/qualifications (aka, prototype, series A)
entrepreneur and trying to compare 15 programs – yikes. Just saying,
what if all programs standardized this, or just made it easier to glean
from their website?
Key partners/
Success story/
network/
company
differentiator
PROGRAMS AT A GLANCE
264 265
FREE ELECTRONS
Unclear Ready to scale with a utility
$200K non-dilutive awarded to the winner, plus 10 global power utilities, including utilities from
Free Electrons is a global, electrical utility-backed accelerator with weeklong
expenses paid to all modules for all companies Singapore (Singapore Power Group), Japan (TEPCO),
modules in Berlin, Sydney, Melbourne, and Silicon Valley between April and October.
Germany (innogy), Ireland (ESB), Portugal (EDP),
The program begins with an initial week in Lisbon with 30 teams, but they are
whittled down to 15 after the initial pitch day. The program has three modules: INDUSTRIES Australia (Origin Energy & AusNet Services), Dubai
(DEWA), CLP (Hong Kong), and the US (American
learning about the utility industry, diving deep into silicon valley and tech, and
Mobility, Clean and Smart Energy, and Digitalization Electric Power)
scaling. It culminates in a demo day where companies present to investors and
global utility companies. 10 global utility giants are partners of Free Electrons – an
exciting prospect for startups in the cleantech and/or energy space. WEBSITE
freetheelectron.com
PROGRAMS AT A GLANCE
266 267
PRE-REQS STAGES
ELEMENTAL EXCELERATOR
ELEMENTAL EXCELERATOR
ELEMENTAL EXCELERATOR At least two FTE and an operating prototype Go-to Market: Seed to series A; Demonstration: Seed
to Series C; Equity & Access: Seed to series A
FUNDING
KEY PARTNERS/DIFFERENTIATORS
Go-to Market: $75K; Demonstration: up to $1M;
PROGRAM Equity & Access: up to $750K. But they charge fees: US Department of Defense, Office of Naval Research,
Go-to Market: $3K; Demonstration: $5K; Equity & Hawaii State Energy Office, Hawaiian Electric
A yearlong program with hot desks in Silicon Valley and Hawaii, and weeklong Access: $3K Industries, Vector (New Zealand), Tokyo Electric
work sessions in both throughout the year. 15–20 companies are accepted in each Power Company Holdings, Inc. (TEPCO), First
cohort across three tracks (Go-to Market, Demonstration, and Equity & Access). INDUSTRIES Philippine Holdings Corporation, SK Gas (South
Elemental Excelerator begins with a kickoff week in Honolulu and continues through Korea), and GE Ventures
a CEO & Leadership Summit, also in Hawaii. The program offers mentorship, Mobility, Water, Food & Agriculture, Energy,
ongoing support, and a wide range of facilitated connections to people within the Cybersecurity, Fintech, Fuels, IoT, Materials and WEBSITE
sustainability sphere. Plastics, Natural Resource Management, Recycling
and Waste Management, AI elementalexcelerator.com
PROGRAMS AT A GLANCE
268 269
Y COMBINATOR
Y COMBINATOR
Y COMBINATOR
PRE-REQS STAGES
270 271
PRE-REQS STAGES
TECHSTARS
TECHSTARS
TECHSTARS
Not much. Companies of any sort are encouraged Pretty much all
to apply, from those with “an idea, a dream, and
maybe a dog,” to those that have raised over a million KEY PARTNERS/DIFFERENTIATORS
already
PROGRAM It’s a corporate-sponsored accelerator, so a ton.
FUNDING There are 72 listed on their site
A 3-month, mentor-driven program with a very global presence. Techstars has
almost 40 accelerators in cities around the globe, from Adelaide to Austin, as well $120K in exchange for 6% equity WEBSITE
as an (almost) entirely online program. Program cohorts are about 10 companies.
The program offers office space and works in three stages: finding mentors, INDUSTRIES techstars.com
execution, and finances. It culminates in a demo day; after the program is over,
Techstars has a network of thousands of alumni and companies for graduates to tap A wide swathe; mainly technology based. From their
into. Techstars also sets itself apart by offering an equity back guarantee – the only website: “we don’t fund biotechnology companies,
one in the industry. Notable alumni include ClassPass and Sphero. restaurants, consultancies, or other local service
oriented companies”
PROGRAMS AT A GLANCE
272 273
ROCKSTART
ROCKSTART
ROCKSTART
PRE-REQS STAGES
Must have at least an MVP At least MVP with some customer traction
274 275
500 STARTUPS
Seed or Series A
MVP, as well as a solid monthly revenue
KEY PARTNERS/DIFFERENTIATORS
PROGRAM FUNDING
Microsoft, IBM
500 Startups is unique in its commitment to one of its core values: diversity. They $150K (minus the $37,500 fee, so participants actually
make a point of finding and bringing in diverse teams from across the world. The walk with $112,500) in exchange for 6% equity. 500 WEBSITE
Seed Program is a 4-month-long accelerator focused on pre-series A companies Startups then has the right to make a follow-on
(who nonetheless have some traction), while the Series A program is for companies investment of an additional $500K or 20% of your 500.co
that – you guessed it! – are on the verge of raising their Series A round. 500 next priced round of $1M or more, whichever is lower,
Startups offers companies (shared) office space, mentorship, and advice, and which expires after the conversion of their convertible
culminates in a well-attended demo day. The 500 Startups community is robust security. Speaking of, check out their open-source
and diverse, with founders and startups all over the world. Companies get $150K KISS (“Keep It Simple Security”) investment docs (500.
in exchange for 6% equity, but 500 Startups also charges a program fee of $37,500. co/kiss) – super useful.
Notable alumni include Credit Karma, Hinge, Zesty, and Talkdesk.
INDUSTRIES
WAAABAM !
RYAN KUSHNER
276 277
I would like to give a HUGE thanks to the California Clean Energy Fund and New Energy Nexus.
HENDRIK TIESINGA They are two of the biggest-thinking, clearest-eyed organizations I’ve found, and it’s been
WAAABAM!
WAAABAM!
an honor to work with them in general, on this book specifically, and with Hendrik Tiesinga,
Co-Founder & Program Director Andrew Chang, and Danny Kennedy in particular.
@ New Energy Nexus
Also, thanks to my wife Amanda Joy Ravenhill - she’s the bee’s knees. Swoon.
Welcome to the end, or perhaps just the beginning of your journey. This is a bit of a
I love startups and the role they play in solving serious social and ecological problems,
golden era for accelerators, with more and more popping up, in more geographies and more
and accelerators are one of the best tools I’ve found to help startups grow. I hope that this
industries – all good things. We hope that this book serves new and existing accelerators and
book serves the multitude of startups out there as they look to grow and create impact, and
helps them be more effective, more efficient, and more confident in their offerings.
particularly if they are considering joining an accelerator or incubator program. The whole
accelerator world was a lot of gobbledygook to me before I worked in the field and was able to
If you enjoyed this book and want to stay involved here are some next steps:
parse the issues one by one, so I hope Accelerate This! has been useful and clarifying.
1. This is v1 of Accelerate This! We would love your feedback and examples from your Accelerators: you are my trimtab! Help me help you help the world. We need it....
work for the next version of the book. Please send to either our facebook page or email:
hello@energynexus.co. Stay in touch!
2. Join the New Energy Nexus - Accelerate This! Facebook Group to keep the conversation
going with peers from around the world. Find me on LinkedIn: linkedin.com/in/ryankushner
Check out my website: www.ryankushner.com
3. Check out the New Energy Nexus website (www.energynexus.co) and sign up for the
Do whatever it is people do on Twitter: @kushykush
newsletter to learn more about energy startup programs from around the world.
4. Want to work with Ryan and the New Energy Nexus team behind Accelerate This!? We Much love :)
can help you design and deliver cutting-edge startup programs tailored to your specific Ryan
context – from a smart energy hackathon to a global accelerator program or a seed
fund. Email us (hello@energynexus.co) and hope to talk soon! Waaabam!