Accelerating Success: A Study of Seed Accelerators

A presentation of our bachelor thesis conducted at Chalmers University of Technology on the subject of accelerators. Learn more at acceleratorstudy.com.

1. - Intro -Accelerating Success acceleratorstudy.com
Accelerating Success
A Study of Seed Accelerators and
Their Defining Characteristics
May 15
th
, 2012 - Gothenburg, Sweden

2. - Intro -Accelerating Success acceleratorstudy.com
Dropbox - an Accelerated Success
•Participated in Y Combinator in 2007
•Now valued at over $5 billion

3. - Intro -Accelerating Success acceleratorstudy.com
Outline of Presentation
•Background to thesis and accelerators
•Research question
•Method and research design
•Case studies of accelerators
•Findings from research
–Stakeholder Perspective
–Organization Perspective
–Process Perspective
•Conclusion

4. - Background -Accelerating Success acceleratorstudy.com
Why Study Accelerators?
•Explore a new phenomena – little has been
written about accelerators
•Chalmers Innovation, our stakeholder,
interested in the accelerator model

5. - Background -Accelerating Success acceleratorstudy.com
Chalmers Innovation
•A business incubator in Gothenburg, started
in 1999
•Picking up new trends from Silicon Valley,
Lean Startup and accelerators
•Startup Spring Camp 2012
•Interest in further developing their activities
related to early-stage software startups

6. - Background -Accelerating Success acceleratorstudy.com
Software Startups in the Past
•Boo.com – an internet clothing retailer
•Burnt over $125 million of venture capital
in 18 months
•8 offices and over 400 employees
•Launched in 18 countries simultaneously
in November 1999, bankrupt in May 2000

7. - Background -Accelerating Success acceleratorstudy.com
Incubators
– the Predecessor of Accelerators
•First incubator established in 1959
•Provides basic necessities for operating,
such as office space and administrative aid
•In some cases also provides access to
advisors and investors

8. - Background -Accelerating Success acceleratorstudy.com
New Methodologies
Customer Development Lean Startup

9. - Background -Accelerating Success acceleratorstudy.com
Decreasing Costs for Starting New
Ventures
•Cloud services enable instant scalability
•Open source software provides cheap
ready-made solutions
•The huge venture capital investments not
necessary at the early stage anymore

10. - Background -Accelerating Success acceleratorstudy.com
The First Accelerator: Y Combinator
•Founded in 2005 in Silicon Valley
•Today over 200 different accelerators world-
wide

11. - Background -Accelerating Success acceleratorstudy.com
Characteristics of an Accelerator from
Startup Factories
•An application process that is open yet highly
competitive.
•Provision of pre-seed investment, usually in
exchange for equity.
•A focus on small teams not individuals.
•Time-limited support comprising programmed
events and intensive mentoring.
•Startups supported in cohort batches or
‘classes’.

12. - Research Question -Accelerating Success acceleratorstudy.com
Research Question
What defines a seed accelerator and which
aspects are useful for Chalmers Innovation?

13. - Method -Accelerating Success acceleratorstudy.com
Method Used for Thesis
•Roadmap created using secondary
information from articles and blogs
•Built theory from case studies on
accelerators in Europe and the US
•Collected material was used to form the
analysis consisting of three perspectives

14. - Method -Accelerating Success acceleratorstudy.com
Iterative Method Used

15. - Case Studies -Accelerating Success acceleratorstudy.com
Case Studies of Accelerators
•American: Y Combinator and TechStars, data
collected from secondary sources
•European: The German Silicon Valley
Accelerator, Springboard, Startupbootcamp,
Nordic Startups, betaFACTORY and Startup
Sauna, data collected from interviews

16. - Case Studies -Accelerating Success acceleratorstudy.com
Y Combinator and TechStars
•Two of the first accelerators, now defining the
standard of an accelerator
Founded in 2005
Mountain View, California (Silicon
Valley)
2-10% equity
11 000 – 20 000 USD funding
65 teams in last batch
Founded in 2007
Boulder, Colorado
6% equity
6 000-18 000 USD funding
9-12 teams in each batch

17. - Case Studies -Accelerating Success acceleratorstudy.com
Founded in 2012
Berlin, Germany
No equity
No seed funding
6 teams in each batch
Founded in 2009
Cambridge, UK
6% equity
£5 000 - £15 000 funding
10 teams in each batch
Founded in 2010
Copenhagen, Denmark
8% equity
15 000 € funding
10 teams in each batch
Founded in 2011
Stockholm, Sweden
Not operational
Founded in 2011
Oslo, Norway
6-8% equity
5000 – 15 000 € funding
5 teams in first batch
Founded in 2010
Helsinki, Finland
No equity
1500 € funding
15 teams in each batch
European Accelerators

18. - Analysis -Accelerating Success acceleratorstudy.com
Analysis of Accelerators
•The collected data was analyzed and common
themes in the accelerators was triangulated
•These were summed up in three perspectives
–Stakeholder
–Organizational
–Process

19. - Analysis -Accelerating Success acceleratorstudy.com
Stakeholder Perspective
•Startups: contact with mentors and investors, quality
assurance
•Investors: due diligence, deal flow
•Mentors: pay-it-forward, keeping up-to-date, meet
with interesting people
•Society: innovative environment, job creation

20. - Analysis -Accelerating Success acceleratorstudy.com
Stakeholder Pyramid

21. - Analysis -Accelerating Success acceleratorstudy.com
Organizational Perspective
•Few employees in the organization
•Mentors work for free
•Business model differs, often equity-based
with private investors but sometimes
government or universities

22. - Analysis -Accelerating Success acceleratorstudy.com
Process Perspective

23. - Conclusion -Accelerating Success acceleratorstudy.com
Conclusion Reached in Thesis
•An accelerator act as a hub, connecting the three main
stakeholders: mentors, investors and startups.
•The accelerator organization consists of a few employees that run
the day-to-day operations and facilitate the interaction between
the stakeholders. Mentors do not receive monetary compensation
from the accelerator.
•The processes in an accelerator can be divided into five distinct
phases; awareness, application, program, Demo day and post
Demo day.
•The accelerator accept teams based on the composition of the
teams rather than their idea.
•The teams in an accelerator are small consisting of two or three
people and the team is at an early stage that require intensive
mentoring and iteration of their idea.
•An accelerator can be seen as a service provided to investors

24. - The End -Accelerating Success acceleratorstudy.com
Thank you!
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www.acceleratorstudy.com