Remote accelerator programs for SaaS founders
Accelerators are like pressure cookers that aim to transform raw materials (startups) into diamonds (unicorns).
Operation: Accelerators help early-stage founders grow their businesses with funding, mentorship, and education. Typically, founders exchange equity to enter the cohort-model programs, which last a few weeks to a year. Investments range from $10,000 to $1 million.
Value: Collaboration, community, and connections are often cited as the top reasons why founders seek out accelerators. Accelerators’ demo days — in essence, a graduation ceremony — also offer a splashy occasion that can attract further investment or news coverage.
Drawbacks: Detractors say accelerators’ costs — anywhere from 3% to 12% equity or other steep fees— are rarely worth it. Others, like Sammy Abdullah of The People’s VC, say accelerators make startups unattractive to prospective angel investors. Also, nearly anything you’d like to learn or collaborate on can be found for free online.
What to consider: Do you really need an accelerator or are you looking for mentorship and community? Can you afford the equity and significant time investment? What do the accelerators’ graduates think of the experience? Who are the mentors and what access will you have? Here are other questions to ask an accelerator.
TL;DR: The accelerators we’re looking at are TinySeed, Y Combinator, Techstars Anywhere, Startup-O, BoomStartup, Newchip Accelerator, and the Wells Fargo Startup Accelerator.
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TinySeed
TinySeed is a year-long, remote accelerator that funds 15 - 20 early-stage SaaS founders per batch.
TinySeed invests $120K for the first founder and $60K per additional founder for 10-12% equity. Led by Rob Walling and Einar Vollset, TinySeed loves bootstrapped companies and recently raised an additional $25M to invest in more than 100 startups over the next 3 years. It plans to start a European program in late 2021 or early 2022, with an Asian program to follow. Applications for its next bath will open in the Summer of 2021.
Y Combinator
Often regarded as the gold standard of accelerators, Y Combinator invests in 150+ companies twice per year.
In exchange for 7% equity, YC offers founders $125,000, a 3-month intensive program, and access to one of the most powerful networks in tech. YC has funded more than 3,000 companies and 6,000 founders to date, and its alumni network is incredibly valuable for early-stage firms. YC may return to an in-person format in the future and applications are accepted on a rolling basis.
Techstars Anywhere
Techstars operates more than 20 accelerator programs around the world and has invested in several unicorns, including SendGrid, Remitly, and Chainalysis.
Its remote program, Techstars Anywhere offers a $20,000 stipend in exchange for 6% equity of your company. All accepted companies are offered a $100,000 convertible note. Applications for its next cohort open on July 19 and the deadline is Oct. 6.
BoomStartup
BoomStartup offers a variety of remote accelerator programs that focus on learning opportunities to expand your network, tools, and comprehension.
BoomStartup typically offers investments between $35,000 to $100,000 for its 1-month program, and its equity stake varies per company. Funding can come from BoomStartup and/or its investor mentors, however, funding is not guaranteed. Applications for its next cohort open in the Summer of 2021.
Newchip Accelerator
The Newchip Accelerator offers three programs for MVP-level startups, companies with early traction, and those that are ready to scale.
Newchip bills itself as an “Executive MBA program” that offers a community, mentors, and group accountability. The equity-free program offers up to $250,000 in funding for its 3-6 month curriculum. Costs for the program vary but range from $2,000 to $4,000 per year, however, some participants receive scholarships that cover the costs. Newchip hosts 8-10 cohorts per year and accepts applications on a rolling basis.
Startup-O
Based in Singapore, Startup-O isn’t a typical accelerator. It offers an “online assessment” program that helps venture funds discover and invest in early-stage tech companies.
Unlike other accelerator programs, Startup-O doesn’t take an equity cut for access to its network, which it says can help startups earn investments in less than 10 weeks. The strategy aims to bridge a funding gap between startup’s angel investment rounds and Series A funding.
Wells Fargo Startup Accelerator
The Wells Fargo Startup Accelerator invests in companies around the world that can help the banking giant with its processes, customer relationships, and infrastructure.
Wells Fargo offers a 6-month program and up to $1 million for startups, however, its investment terms are negotiated privately and not publicly disclosed. Its ideal startups are creating enterprise-scale technology in banking and financial services. Wells Fargo says all its investments are passive and it does not ask for board representation.
Did I miss some accelerators? Please share them or your thoughts on accelerators generally in the comments below.
Cool post. Thx!
Great stuff, @bobburch!
Thanks for sharing.
I run a couple of accelerator programs in Malaysia (1 pre-accelerator & 1 fintech accelerator). They were all corporate sponsored and not taking any equity or fee from startups. Startups get business opportunities with the corporate sponsors and PR values.
This model is pretty common and many accelerators, such as Plug & Play, 500 Startups, etc. make money from it.