Coffee With Marc Wesselink: Is Giving Equity To An Accelerator A Wise Decision?

Coffee With Marc Wesselink: Is Giving Equity To An Accelerator A Wise Decision?

06-Dec-2016 by Marc Wesselink

I’ve been working at Startupbootcamp for 4 years and at the moment I am the MD of the Smart City & Living program, so of course my answer to the question in the blog post title would be yes. But that is too easy. I would like to talk about the 3 reasons why giving your startup equity to an accelerator is wise.

Reason #1: Inclusion

If you want to have a partner who is helping you to achieve your goals, you also want to make sure you choose the best one. Good partners don’t come cheap. Everyone knows that if you pay Nuts, you get Monkeys. As we are entrepreneurs ourselves, we’ve been in your shoes before. That is why we can help guiding you not only during the accelerator program but also after (that is where it becomes tough!). After the program ends, you would really need an advisor who will support you at all times. If you give them equity, they will become a part of your company and will be there for you through good and bad times.

Reason #2: Business Model

Many accelerators have been popping up lately and they are gone after running a few programs. A good accelerator is based on experience of its founders but also on the ability to iterate the programs based on the feedback of the startups during the program. They need a way to make money because the more programs they run, the better they become. To run programs, they need to have a solid business model.

Reason #3: Commitment

Starting a business and getting value out of it takes from 7 to 10 years. That’s a long commitment, and many people will leave you along that road, even founders and your first employees. The best way to keep a partner for the long run is to give him a stake in your business so he will keep on running with you as well.

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What are the downsides?

Having an accelerator as a shareholder might scare investors away. The reason could be them not seeing the benefits of the accelerator or them seeing it as a down round because of the cash part of the investment. The best way to validate the value of the program is by asking alumni of these programs what value they have received during and after the program and if they regret going through the accelerator.

More posts in this blog series are:

Marc Wesselink is the Managing Director of the Startupbootcamp Smart City & Living program in Amsterdam.

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