The importance of startup accelerators for the business ecosystem

Las startup accelerators are, in many cases, the key that many entrepreneurs need to obtain funding and continue to grow. In fact, it's about competitive and comprehensive programs that have transformed developing companies into large global and revolutionary companies. Using an accelerator may be the best alternative, but it's essential to know them well, so let's look at them in depth.

What is a business accelerator?

Business accelerators are organizations with intensive programs whose purpose is help the development of newly created companies that have a defined business model, but that they need to accelerate their growth. This is achieved by providing knowledge, tools and resources that make it possible to optimize business strategies, technological training and financial advice. In the same way that, for example, Venture Capital funds, accelerators are aimed at achieve great returns on your investments. This is why they work with startups in their early stages, thus mitigating the risks inherent to the early stages through training, mentoring, advice, resources, etc. But in the entrepreneurial ecosystem, accelerators are not alone. It's easy to confuse these programs with those in incubators. In fact, there are those who think that both serve the same purpose.

Differences between an accelerator and a business incubator

As we have seen, accelerators are focused on providing support to companies that already have a business model and even an MVP (Minimum Viable Product). Incubators, on the other hand, are aimed at those that do not have a defined model; it is enough to have the business idea, but it is not necessary to have an established formula. The purpose of an accelerator is to accelerate the growth of established startups. This means that they offer expert advice to newly created companies which have already planned their operation. That way, mentors can go directly to boost their growth. Incubators, on the other hand, are programs that help entrepreneurs to manage your business project and take your first steps in the business world, thus giving rise to an optimal business model.The duration of accelerator programs is much shorter than that of incubation programs. In the latter, companies are in the early stages of business development, and the focus is on education and training. Having to build the base of the startup, instead of accelerating its growth, is what makes the periods in incubators longer. Not only that, but accelerator programs, being offered to consolidated companies, tend to be very competitive. Financial support is offered to projects that show good performance, and sometimes investors join as partners of companies. In incubators, funds usually come from universities or educational centers. Therefore, it is essential that startups know the role of each of these ecosystem actors when incorporating them into their strategic planning. Only then will they be able to know clearly what to consider when going to one or the other and obtaining the corresponding benefits efficiently.

The benefits of business accelerators

Entities dedicated to business acceleration offer multiple benefits to different companies whose objective is to scale their projects. The most prominent of these are:

• The definition and validation of the business idea by experts.
• Access to investment (which is a way to obtain the necessary funding).
• Coworking spaces and networking networks.
• Business support.
• Technical equipment.
• Mentoring, counseling and training sessions.

Therefore, if your company has an MVP, your business is growing rapidly, you have clients with an established profile and you have the necessary resources, requesting the support of a business accelerator may be a good way to follow.

What do you need to know before submitting a business project to an accelerator?

When choosing an accelerator, the first thing to keep in mind is that the choice is not unidirectional, it does not depend only on the startup. This is a bidirectional process that must mean a “win-win” between both parties.It is also important to make a exhaustive research of existing accelerators and assess those with the best fit. This means that you will have to find out if they have worked with startups in the same sector, needs and size, analyze the funds received by the companies that have participated in the programs, what type of network they can offer, consider that the program aligns with your product and business... On the part of the accelerators, they all follow practically the same process. Los factors and characteristics they look for in applicants are: adaptability, a business model with an MVP and real customers, a well-defined competitive advantage and, above all, a work team that complies both with the technical aspects necessary for the development of the project and with the values, ideals and organizational culture of the startup. Now yes! Once the request is accepted, the real work begins. In addition, what differentiates accelerators from other intensive commercial programs is that startups here end with a Demo Day. This means that the team has the opportunity to present your business model and share both what they have learned and the aspects they have worked on, all in order to receive funding.

What are the main benefits of business accelerators?

Accelerators, through the advice of business experts, business strategists and market analysts, identify the most promising projects and incorporate them into the program. This is how they achieve identify the areas of opportunity for each business, seek strategies to reduce costs and optimize commercial offers. The objective of this is to make companies scalable and successful. It is a fact that startups, when they enter the market, share a landscape defined by economic instability, the speed of digital transformation, the need for growth and differentiation in a highly competitive environment... Accelerators consider this current context, the peculiarities of each business and the performance of each company throughout the program. This is how, in each acceleration, the most effective actions are structured, and what they achieve is to mitigate risks, reduce costs, optimize productivity and provide successful action strategies in optimal work frameworks to achieve a good position in the market.

What about corporate accelerators?

There are many accelerators that have been created in recent years, but within this world a new trend has also been adopted: corporate accelerators.This type of accelerator has its origin in the successful model developed in Silicon Valley, and they have been developed due to the growing interest that large companies have been showing in entrepreneurs and startups.Corporate accelerators have managed to position themselves as a connecting vehicle between startups and large companies. This relationship helps the former to achieve partnerships with large corporations, and allows the latter to discover a world that until now was unknown to them. In this way, corporations obtain, among other things, new avenues of investment and entrepreneurs obtain funding and support. Large companies that wish to remain profitable in the market must reinvent themselves from time to time and innovate, so it is convenient for them to become corporate accelerators. However, for entrepreneurs it can also be very beneficial:

• They get direct access to a large company, so they can validate their product or service very quickly and easily.
• They have the ability to reach this company's customers, which is really useful for validating the business model as well and pivoting more quickly if necessary.
• Finally, they have access to a potential investor who can give them security and confidence in their project.

At Santalucía Impulsa we have Santalucía Promotes Startups, the corporate acceleration program for innovative projects specialized in Insurtech from Grupo Santalucía. It offers a unique acceleration process based on the launch of InsurChallenges, specific business and technology challenges to meet the needs of current and future customers, and the opportunity to proactively seek collaborations and alliances with Grupo Santalucía. Get to know our accelerated projects!