About a year ago and after working at New York Angels for a few months, I realized that as hot as the early stage venture scene is, I could not figure as to the number of deals being funded leant itself to prove high success for these companies in 1, 2, or more years.  

There were so many deals getting funded and with the number of companies that realize success, it seemed that many were set up to have a good chance at failing.  Now it can be argued that the right money is not going into the right deals, or people are creating versions of other successful models and are trying anything without quite thinking through what it is they are actually doing.  

Then I began visiting accelerators and incubators to meet their latest group of companies admitted.  I could not understand how an organization can say at this given point in time, these 10 or more companies are aligned for success, particularly when a group can receive 1,000+ applications.  

Yes, I understand a larger portfolio will lend itself to higher success, however, I do not think that the ten need to be selected on the same day.  

Benefits of the current model

  • Entrepreneurs experience the program together
  • There is a high amount of energy with more people working intensely around a goal
  • Motivation is challenged in an intense program that has a fixed time limit
  • It makes things easier for the mentors/investors, they can meet with and compare multiple companies at once 
  • Stronger momentum for funding companies 
How could it be better? 
  • Take in smaller classes more often
    • On a rolling basis is possible, but I believe in using some form of batch processing helps create more support amongst the companies being admitted
    • Accelerators can also get to know founders better without feeling the pressure of a deadline around the corner
  • Processes can be broken down and segmented to optimize the mentors and the accelerator manager’s time.  
    • This requires motivation from the accelerator for the mentors, and stellar operations execution.  
These changes will lend the accelerators to be more flexible with what is attractive in the market at a given time and prevent missed opportunities to make these programs more competitive.  If anything, your business, it’s processes and creating value should always be evolving toward improvement.  
 
An accelerator is no different.  It is a business.  
 
Image sources: http://www.wsi-globalreach.com/, Noma Bar Facebook Page created for FT Risk Addicts Article
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