This week, the Digest examines this growing trend and attempts to provide insight into two important questions about pre-accelerators:
- What are they?
- What are their goals?
In January 2014, City University London, the Accelerator Academy, and their partners announced the launch of FastForward (FFWD) London and they branded it as the world’s first pre-accelerator. The intent of FFWD London is to prepare its startups for successful application and entry to leading London accelerators, access to first funding, and non-equity finance.
At the end of the six weeks, teams pitched their ideas to London-based accelerators, grant providers, and early stage investors. In September 015, FFWD London held its most recent demo day for teams from its summer 2015 cohort.
While it is unclear if FFWD London was the world’s first pre-accelerator, they were among the first to start a growing trend that will continue to gain popularity well into 2016. In states across the U.S., universities are establishing their own pre-accelerator. However, these programs differ greatly in their structures, the availability of capital, and their goals. Several efforts include:
After receiving a $500,000 i6/Cluster Grant for Seed Capital Funds in April 2015, Penn State University launched the TechCelerator@State College, a pre-accelerator that is specifically designed to allow technologists who have not identified themselves as future business owners to explore entrepreneurship and commercialization pathways for technologies and arrive at educated go/no-go decisions.
In January, six companies started the first round of the 10-week TechCelerator@State College program.
Similar to TechCelerator@State College 10-week program, the University of Houston’s Red Labs offers a semester-long, pre-accelerator program that runs during the spring semester. In addition to the services provided, this program allows students to claim up to six hours of course credit for completing the program.
However, TechCelerator@State College and Red Labs, are outliers due to the length of the program. Many of the programs are more similar in length to FFWD London, as they typically last for about six-weeks.
Some programs have not put a clear timeline on their pre-accelerator program. This model falls more in line with no-cost incubators and coworking space that provide programming, events, and connecting with mentors.
These programs such as Northwestern’s the Garage view these spaces as places were companies at phase zero (the pre-concept, pre-revenue stage) to tinker with ideas, learn about how to be an entrepreneur, and build the confidence to move into an incubator or participate in an accelerator program. For these accelerators, the goal is to help entrepreneurs develop tools and potentially even fail.
Another uncommon component of pre-accelerators is availability of capital. Due to these programs focusing on companies at phase zero, most pre-accelerator programs do not provide their client companies with capital. However, Virginia Commonwealth University’s pre-accelerator provides $20,000 in non-dilutive funding to each startup. The program concludes with a demo day to attract future rounds of funding and access to an accelerator/incubator program.
Another goal of pre-accelerators is to help diversify their university’s and/or region’s entrepreneurial community. In communities across the country, Avión Ventures is attempting to launch regional pre-accelerator programs to support the growth of Latina-run startups. In Atlanta, TechSquare Labs and Opportunity Hub merged to better provide entrepreneurs from underrepresented and underserved communities with access to services including a pre-accelerator program that engaged local research universities.
In addition to women and minorities, some pre-accelerator programs work to support veterans with potential startup ideas such as Bunker Labs in Chicago and Madison, WI.
Although not explicitly stated in their mission, other pre-accelerators also work to build inclusive entrepreneurial networks. Melissa Crounse, executive director of Northwestern’s the Garage, wants to use its pre-accelerator program to improve inclusion by building a network of female and minority entrepreneurs as speakers and mentors.
Finally, some universities use these pre-accelerator programs as an introduction and filter to help prepare startups for the unversity’s accelerator or incubator program. In Madison, WI, gener8tor announced the creation of gBETA program at the University of Wisconsin – a pre-accelerator for pre-product, pre-revenue startups that provides mentor matching, education and one-on-one counsel during a six-week period that is shorter than the core programs 12-week experience.
In conclusion, at the early stage of this growing trend, pre-accelerators are diverse programs that share many similarities, but also provide unique characteristics based upon the needs of their entrepreneurial community.
In comparison to accelerators, they provide access to mentorship, education, and programing usually during a specific period of time using a cohort model. However, they typically do not provide any form of capital for companies due to the early stage of the startup.
In general, pre-accelerators have two goals that address needs in the innovation ecosystem:First, they are intended to provide potential entrepreneurs with access to space and tools at a stage in development that is typically ignored by entrepreneurial support organizations, but important to the success and confidence of an entrepreneur.
Second, they provide a mechanism that allows incubator/accelerators to develop a stronger pipeline of a better-prepared client company while filtering out poor ideas and unprepared entrepreneurs before capital is involved.
They also may provide a solution to helping female, minority, and veterans better engage in entrepreneurship by increasing their entrepreneurial readiness.