Seed-DB has been a member of the Accelerator Assembly since the organization began last year. The Accelerator Assembly is a “Startup Europe” initiative funded by the European Commission, but importantly is an industry-led network. It was founded by seed accelerators in Europe (Seedcamp, TechStars/Springboard, Bethnal Green Ventures), as well as Startup Weekend, Seed-DB, and several others, with strong support from Nesta.
One of the tasks that this group of organizations agreed to was to do two pieces of research. The first was on the overview of the seed accelerator ecosystem, particularly as it applied to Europe. The second was on the results and impressions from the startups that graduated from accelerators. Seed-DB (and specifically me) was tasked with combining quantitative analysis, largely based on Seed-DB data, with qualitative research based on surveys of accelerators and startups. THANK YOU to all of the accelerators and startups that answered the surveys… there is clearly survey fatigue amongst accelerators and startups world-wide, so I appreciate your time.
These reports are somewhat limited in scope, because the European Commission has very specific items that they required us to study. Despite this, I think there are some insights that may be useful for accelerators and startups alike:
- Size of accelerator ecosystem: The European accelerator ecosystem makes up a smaller proportion of the number of total companies funded (20.3%) than the number of programs world-wide (27%). This is because all of the programs that accept significantly larger class sizes (like Y Combinator, 500startups) are located in the Americas.
- Size of job impact: Based on some reasonable assumptions, the number of jobs shown on Seed-DB is likely only 50% of the total number of jobs created by seed accelerator graduates.
- The top two reasons that startups cite as important benefits are: 1) Mentorship / Coaching / Feedback, 2) Network / Alumni / Prestige. But one of the top drawbacks of accelerators cited by startups was also mentoring! It’s clear that mentoring is a highly valued aspect of a seed accelerator program, but when done poorly can be damaging to startups.
- Another top drawback is the focus on Demo Day. As seed accelerators proliferate, the number of interested/qualified investors at each event will quickly diminish except for the top programs. Spending significant time on Demo Day when there’s no clear benefit to the startup detracts from the startups’ experience.
- When asked how much equity a startup would be willing to give their accelerator even without any funding, nearly 80% gave non-zero answers, with 55% stating between 1-6% equity.
Please do have a look at both papers when you have some time. And as always, get in touch with me directly if you have any questions or comments.