What is an accelerator, and how does it help businesses grow?
What is an accelerator After completing their education, people usually seek to earn money in two ways: by searching job sites and job advertisements or by launching startups and personal businesses. But if people cannot face challenges such as costs, human resources, connecting with mentors in the field of work, and other things, nothing but failure awaits them. Here, the role of support institutions or accelerators becomes more evident.
Today, with the formation and introduction of knowledge-based companies, the word accelerator is also heard a lot, and many people are unfamiliar with this term. But what is an accelerator, and how does it help startup companies?
An accelerator is a center for the rapid and principled growth of startup companies, and investing in startup companies assumes a percentage of their ownership. In contrast to this ownership, business accelerators provide project managers or companies with the necessary training for success and further growth. We must accept that today is a world of ideas and creativity. Many ideas and thoughts need to be nurtured and supported; in this regard, the need for accelerators is felt more than ever. You may have heard the story of Google, which started in a garage, and the support of accelerators led to its stunning progress and growth in a specific period. By attracting capital, these centers create unique opportunities for entrepreneurs and investors so that both parties can witness significant progress.
But you may also have questions: How many categories are accelerators divided into? What are the best accelerators in Iran and the world? Join us to answer these questions.
What does accelerator mean?
Accelerators play an essential role in the world of startups. Accelerators are institutions that support startup teams for a specific period through training and business consulting to companies in order to accelerate and advance the development process. These institutions’ support aims to transform business ideas into a saleable product or service in a limited and specific time. Getting help from an accelerator at the beginning of the work reduces the challenges and helps ideas be implemented faster. There are more than hundreds of accelerators around the world that play an essential role in launching startups.
Role of Accelerators
Reducing entrepreneurial risk
Professional team building
Preparing effective marketing plans and advertising for startups
Providing facilities and equipment for startups
Supporting businesses at the beginning of the path
Increasing success rates and increasing growth rates
What is a startup accelerator?
Startup accelerators (Speed accelerators) or (Startup accelerators) are institutions that cover a startup from the early stages of work. After some time, accelerators select an idea and take a percentage of ownership of it by making an initial investment in a new company. In addition, startup accelerators provide the necessary training for project managers to update information and achieve tremendous success.
Types of accelerators
With the expansion of the startup ecosystem and the emergence of accelerators, business owners’ attention has been drawn to these institutions more than before, and various types of accelerators have been formed. Currently, startup teams must choose one of the appropriate accelerators according to their business’s type of activity and needs.
General or comprehensive accelerators
General accelerators are not focused on a specific field and do not have specific restrictions on the activities of companies. A general accelerator supports any startup that meets the requirements to enter the center. This type of accelerator is also known as “non-specialized”. The goal of general accelerators is to provide products that are relevant to customer needs in more than one market. Another goal of general accelerators is to help startups reach their target market. The general accelerator focuses on the following areas to support startups:
Internet of Things
Communication technologies
Hardware development
Cloud technologies
Software Internet products
Specialized accelerators
Specialized accelerators are also known as vertical accelerators in the world. Unlike general accelerators, these types focus on choosing a specific area and operating in a particular field. Of course, the number of these accelerators is directly related to the growth of the startup ecosystem in a country. These types of institutions are similar to public institutions, except that they focus on specific business areas, attracting a homogeneous group of applicants. Experts support applicants to these accelerators and experienced people, increasing startup program effectiveness.
Corporate Accelerator
Corporate accelerators are affiliated with or owned by a larger company. They are one of the most targeted accelerators and are responsible for managing innovation and implementing acceleration programs, empowering and increasing the success rate and growth of subsidiary startups. Corporate accelerators are divided into three types, each with different programs.
Open Innovation Program
Innovation Outposts
External organizational accelerator programs
Virtual Accelerator
Due to the development of the Corona disease, another type of accelerator called virtual or online accelerators started working at some point. In this type of accelerator, providing physical space is impossible, but all services remain the same. In addition, a virtual accelerator can be a specialized accelerator. On the other hand, some in-person accelerators are trying to provide their services virtually. The best example of this is accelerators such as Y Combinator.
Government Accelerator
As the name suggests, government accelerators are supported by the government or non-profit organizations. This type of accelerator’s main focus is on empowering and supporting the founders of plans and ideas.
History of Accelerators
The first accelerator, Y Combinator, was formed in 2005 in the state of Massachusetts, USA. The company had a time limit for startups to operate, and after this period, they had to leave the institution.
So far, Y Combinator has invested in more than 2,000 startups, the most important of which are Airbnb and Dropbox. After the start of this institution, various accelerators began to operate in earnest around the world, which provided a suitable platform for the growth and development of startups.
Iranian accelerators began operating in 2014. In 2014, Mr. Surena Sattari, Vice President for Science and Technology, presented a proposal for the Pardis Science and Technology Park program to develop the country’s startups and grow the innovative business environment. Based on this plan, the 100×100 program was created to support the country’s startups and 100 entrepreneurial projects.
The first accelerator in Iran, Avai Tek Pardis, began operating at the Faculty of Engineering, University of Tehran, under the supervision of Pardis Science and Technology Park. After that, the Diamond Accelerator at the Sharif University of Technology began providing services to develop an entrepreneurial culture and support Iranian startups.
The role of these accelerators in the startup space is to create a coherent program and plan by observing the specified principles that will enable startups to achieve their goals according to their field of activity.
The best accelerators in the world
Every year, a specific classification is considered to select the best accelerators in the world, considering criteria such as exit rate, increase in investment, startup survival rate, founder valuation and satisfaction, and alum network. However, according to an examination of these criteria, the accelerators we will introduce below are among the top accelerators in the world.
Hult Prize Global Accelerator
Y Combinator
TechStars
WAYRA
CHANGE LABS
Halcyon
Conscious Venture Labs
BongoHive
Gaza Sky Geeks
Concluding Remarks
Accelerators help knowledge-based companies move faster through various stages of growth and development by providing financial resources, workspace, collaboration with related industries, and consulting. They are usually associated with investors, investment funds, government agencies, or large companies that support innovation and startups. In this article, we examined important issues such as the best Iranian and global accelerators, types of accelerators, and…