Ask HN: Open accelerator program without the VC?

41 points by snoonan 12 years ago | 22 comments

As a new bootstrapped business with an experienced team (read, older with families, mortgages and our own money), we are in a weird place when it comes to traditional accelerator programs. We can self-fund, have solid track record and experience and know our target market well. It's always going to be a 7 digit/yr thing. We're not on a track interesting to VC at all. We want to build a good business that grows.

What we lack, though, is the explosive boost in everything related to launching a new business that comes from being an accelerator program. We have thought of simulating it, but it's clear it's not the same.

Is there an open option that provides a similar framework for "the rest of us". If there isn't, why not?

Asparagirl 12 years ago |

It's not an accelerator but rather a conference: you want Amy Hoy and Alex Hillman's BaconBiz conference in Philadelphia (http://baconbiz.com/), or the Business of Software conference in Boston (http://businessofsoftware.org), or Rob Walling and Mike Taber's MicroConf in Las Vegas (http://www.microconf.com/).

All three are for bootstrapped businesses. All three also have incredibly useful and non-fluffy videos of their past speakers online, well worth watching even if you can't attend the actual events.

And keep the faith -- the VC model has tremendous drawbacks for many people, especially those of us who are not willing to essentially become indentured servants. Bootstrapping is highly underrated.

snoonan 12 years ago | |

Thanks! I will definitely dig into these. I absolutely agree regarding VC. Even if for some reason you DID want VC calling the shots, it's still way too early. If you look at the company itself in terms of an MVP, why go selling it to a customer before its ready?

tomasien 12 years ago |

This isn't going to help you, but that's what we did locally (in Richmond, VA) for the Lighthouse Labs accelerator - no investment, just mentorship, space, and a demo day. 3 of the companies are growing considerably, but only 2 ended up raising funding - the other was always going to be bootstrapped. It worked out great! Our next class is going to get funding (same amount as YC) for 0% in equity to maintain the integrity of the program, with an option to take more and give up equity. We're really excited about it and I think someone with more prestige should do it nationally.

chippy 12 years ago |

I suppose you should consider what it is that an accelerator offers, and what it is that they cost, how an accelerator actually works and what you are looking for.

For example for some companies the VC seed funding that an accelerator provides may not be crucial, but the access to business advice, mentors and contacts could be. This generally costs equity - would this be something you'd be after? Are you after no costs, or less costs than the typical startup in an incubator? Why would an entrepreneur want to invest their time but not their money?

snoonan 12 years ago | |

The cost is definitely a fair point. We could definitely pay for it if it existed. We may not be looking aggressively for mentors' time, but more of a framework.

Or, to put it another way, is there a MOOC "course audit" form of YC?

swampthing 12 years ago | | |

In case it makes you feel any better, YC doesn't really offer a framework for business (at least in the traditional sense of the word "framework") - it's more about getting advice, the network, and demo day.

rjdagost 12 years ago |

My experience in trying to raise funding for a business model similar to yours had me asking the same questions. If you're not shooting for the moon in terms of business size, VCs (and thus accelerators) are just not interested. They claim that it takes just as much time to “administer” a large investment as a small one, and thus they are only interested in the companies that are swinging for the fences. There seems to be a financing gap for “mid-size” companies, ones that fall between small local businesses and companies seeking to be the next Google. There's probably a big opportunity in this niche.

akg_67 12 years ago |

Most US States and Canadian Provinces have Self-employment programs (SEPs) that provide 8-12 weeks of extensive training using their framework followed by 6-12 months of one-on-one mentoring and guidance. They also hold networking events for you to network with past and present members of the program. These programs are primarily funded and supported by state and federal small business initiatives.

I went through a similar SEP program in Toronto. I am again considering similar program in WA state for my bootstrapped business. From my experience, these programs are better once you have already started your business and have gone past initial excitement and need some external insights and influence to develop business further.

Some of these resources may help you identify appropriate programs and mentoring: Small Business Administration http://www.sba.gov/category/navigation-structure/starting-ma..., SCORE http://www.score.org, Small Business Development Center http://www.wsbdc.org (if you are WA state, I am sure other states have similar program).

There are a few VC type funds who invest in businesses with potential for steady cash flow and not looking for moonshot. These funds typically expect regular distributions/dividend/return of principal from your business. I believe a few years ago, Andy Sack in Seattle was raising a similar fund. I am sure there may be some in your geographical area.

If your business is an established segment, you may be able to find someone who already started another business in same/similar segment who may be interested in mentoring and guiding you. Typically, these people tend to be older age, founders themselves, started from nothing and now want to help someone else do the same. Clicking with them and chemistry is much more important here. I have a friend who started an industrial equipment company who was taken under wing by a guy who was already very successful in industrial equipment space with his own group of companies. My friend took his company to $70 million in revenue with guidance from the guy.

ritwikt 12 years ago |

You might want to answer what you want from the accelerator - you seem to be hinting @ growth - you might want to qualify that further since you seem to be covered on market access and possibly money

snoonan 12 years ago | |

What we find most appealing is the rapid initial launch framework. The growth is really just growing into our pants. It's not startup growth, rather comfortable small business growth. A million or two a year in revenue if we execute right.

The VC path is not attractive for us or for them since there's probably no exit. That doesn't mean we don't see the strong benefits of the initial huge push and mindset that accelerators foster. Make sense?

rikacomet 12 years ago | | |

What you need ask is, what good is the "boost" money, if there won't be 10-20 million in sales (or even more)?

by taking money on what-so-ever terms or SUPPOSE you magically find a lot of it somewhere, you are only fixing the supply side of things, not the demand.

If the demand is there, as you supposedly make it out to be, why can't in this day and time, you reach customers more rapidly then you are right now? (and is there a genuine short-cut? at all??) This is the question you should be asking yourself.

so in short, how can money help fix that?

In my opinion you are facing a few natural doubts, but the main problem is that there are two closely knit issues, instead of one. You have to treat the questions: WHAT MONEY? & HOW SPEND IT? separately.

Sorry, I know your question "seems" more about factual parts, but I believe that, from the way you put it, you have some intellectual parts as well that need to be sorted out.

revorad 12 years ago |

Not quite what you're looking for, but recently, someone tried an online incubator idea called nreduce - http://joshschwartzman.com/#/nreduce/

I think they shut it down eventually. Find more in old discussions - https://hn.algolia.com/?q=nreduce#!/story/forever/0/nreduce

danvoell 12 years ago |

I am in a similar situation. Every time I think about accelerators I try to decide if it is a rational decision or one based on ego and desire for attention. I will probably not be recognized for what I am doing except for the people that I serve. My company is profitable and will continue growing. Could an accelerator or a bit of hype speed up my company such that is worth what I give up in return? Very few accelerators provide an explosive boost.

X4 12 years ago |

May I ask what acceleration means? I always thought it's another word for money and some pro tips.

I, would be happy, if I could join an experienced and older team and start working on an interesting problem. Doing my M.Sc. in CompSci in Germany atm. and none of my friends has any entrepreneurial ambitions or skills, which is depressing and sad. All of them just want a job in the industry. Not really expecting payment.

ing33k 12 years ago |

Check out SLP http://www.startupleadership.com/.

Also heard several good things from startups who were part of Microsoft Accelerator ( https://www.microsoftventures.com/ )

carlosrt 12 years ago |

One Million By One Million is an accelerator that doesn't take equity: http://1m1m.sramanamitra.com/

http://www.quora.com/Sramana-Mitra-1

Disclosure: I have no affiliation with them.

andrewhyde 12 years ago |

Checkout Startup Weekend NEXT http://www.swnext.co/

Unsure of if you are looking for a peer group to help you through the highs and lows or a PR plan (accelerator graduates rarely have a huge splash, it is all about habits formed and community support).

devinmontgomery 12 years ago |

I think this is basically what Kickstarter is. It gives you a defined set of goals and a deadline. You do a pitch and get money. But instead of that money buying equity, it buys your product or service, validates your idea, and hooks you into advice from the best advisors of all - your customers.

plaxis 12 years ago |

You might like to check out NYU Incubators @ 137 Varick Street, DUMBO, and Urban Futures Lab at 15 Metrotech in BK. Independent accelerators and support systems attached inside, university support, NYC govt and private company backing.

georgespencer 12 years ago |

You don't need an accelerator. As far as I can tell from the data, it's unclear whether there is any net gain to being in an accelerator at all.

illumen 12 years ago |

co-working spaces