Having recently just completed the Vocus Upstart Accelerator, the team at FilteredHQ are converted ambassadors of the innovation accelerator model. Furthermore, this isn’t simply punditry, data supports it.
Why engaging with the global technology ecosystem should be part of your innovation strategy
LinkedIn Navigator data demonstrates “Innovation” is of growing importance in Australia with 2,700 senior personnel overseeing it and a further 128,600 loosely affiliated or championing innovation in their company. There are multiple different innovation frameworks an organisation can adopt, in this piece we will solely focus on accelerators.
Y-Combinator, arguably the world’s first seed technology accelerator, started in 2005 which kicked off a proliferation of accelerators. Over the past 10 years there is compelling research conducted by Jed Christiansen of Techstars, GAN (Global Accelerator Network) and The Startup Genome Report supporting the accelerator model as a proven vehicle for innovation.
Keys to startup success – The Accelerator Blueprint
The Startup Genome Report coauthored by Stanford and Berkeley with contributions from Steve Blank investigated 650+ web startups. Many of their findings have now become a blueprint for how accelerators are administered including;
Mentorship: Startups that engage with mentors raise 7x more capital and grow 3.5x faster.
Pivoting: Startups that pivot once or twice raise 2.5x more capital.
Team structure: Startups with 2+ founders scale 3.6x faster. Furthermore, startups with a technical and business cofounder raise 30% more capital and grow 2.9x faster.
Unsurprisingly most accelerators develop mentorship networks, encourage early pivots when business models aren’t validated and only accept cofounded companies with balanced skill sets.
GAN (Global Accelerator Network) Case Study 2010-2016
>GAN, a network of 80+ leading global accelerators, who enforce strict criteria to gain membership recently released data on the 3300+ startups that have gone through their programme since inception in 2010.
On average only 2% of applicants gain entry into a GAN programme, ensuring the integrity and quality of seed accelerators remains high.
Accelerator alumni provide 4 X returns (and growing) since 2005
In the 186 world class accelerators tracked by Jed Christiansen of Techstars, approximately 6000 startups have raised $20B (USD) with a combined valuation of $85B+ (including exits).
Interestingly this figure has doubled from Christiansen’s June 2015 estimate of $10B, further supporting the rapid rise of seed accelerator funded startups.
Accelerator alumni make up a ⅓ of all Series A raises.
Although the acceptance rate into accelerators is typically less than 3%, startups who have successfully graduated from a seed funded accelerator makeup ⅓ of all Series A financing rounds.