Thread by @dunkhippo33

Today's tweetstorm is about accelerators. Should you do one? Which one? Is it worth the equity? How should you make the most of your time with one?

I speak from having gone through and also having managed a top accelerator.

Read >>

1) Like everything else, accelerators are "worthwhile" depending on what your goal is and whether the program you're in can help you achieve that goal.

It's very impt for you to do your own homework on whether this is true because not all accelerators are the same.

2) Most accelerators in the US these days take 5-8% equity for $100k-$150k.

Abroad, the equity stakes can be higher or the dollar amounts invested in your company are lower.

3) Most ppl join accelerators to improve their fundraising. Other reasons may include opening networks to particular industries or companies.

You should be explicit in considering your goal.

4) For example, if your goal is to raise $1m at the end of your accelerator program, you should research whether *many* companies in each batch are actually able to do this.

There will always be that one company that defies the norm, but you want to learn what is the norm?

5) Fundraising success varies wildly from program to program.

Obviously, part of that is related to YOU the entrepreneur and your abilities/your company.

But, accelerators that have greater networks to investors have a higher % of their companies raise more money.

6) And this is what you need to research. If there's a demo day, how many actual investors (vs corporates and mentors) come?

How many companies in the last batch raised $1m+?

7) If your goal is something else -- such as being able to meet with a customer or get access to certain machines, then you need to quantify your goal -- i.e. if you land a deal worth $X, is that worth Y% of your company?

8) Sometimes your goal is just to get money in the door quickly, because your company is dying, and joining an accelerator is the easiest way.

And that can be ok. BUT, you should also know that most accelerator programs don't fund you right away.

9) You may only get the money at the beginning of the program. Or even at the end!

Or if you're an international co and there are legal complexities, it could happen way later than that.

10) The cohort has pros and cons.

There's usually a LOT of camaraderie with your batch. This is partly why the accelerator model is great -- you have peers at the same stage as you to motivate you. And keep you accountable.

11) At the same time, you should also know that to some extent, you are competing with your batchmates.

No accelerator will tell you that. This is especially true if you are in a program with large batches.

12) Think about it - if everyone flooded the investor-market at the same time trying to raise $1m each, do you think there's enough capital to go around in a short period of time?

13) For this reason, it may be wise to raise ahead of demo day as we've often seen done with many accelerators.

Use demo day as a forcing function to get your round done earlier.

14) You don't want to get stuck after demo day and be raising when all investors are tapped out of money and/or believe that the best companies have already done all their raising.

It's a weird perception, but it exists.

15) Lastly, use accelerators to network. It's actually not a good time to be heads down. (obv you need to do some of that too but the best usage of time is for networking).

Accelerators give you the chance to meet other founders / investors / companies / future hires.