BACK TO THE BASICS: WHAT IS AN ACCELERATOR?
The entrepreneurial journey comes in many shapes, sizes, and stages, and while our work typically supports founders who are ready to scale their startups, we know there are plenty of people who are curious about how it all works. Regardless of where you are on your journey, you’ve probably come across the term accelerator. Here at The Idea Village, we could (and do, sorry to our friends and family) talk accelerators all day long, so we wanted to back up and talk about what exactly is an accelerator. Whether you’re a founder looking for the right program to help you scale your company, or someone new to the wide world of entrepreneurship, read on to learn more about what accelerators do, how they support startups, and why we’re so passionate about this work.
BUT FIRST, SOME DEFINITIONS
A rich entrepreneurial ecosystem has various types of businesses and different support systems for each. In our line of work, we sometimes hear people use the terms “small business” and “startup” interchangeably, but there are some important distinctions. A small business aims to have steady and consistent growth, they often have limits on how many employees and customers they can sustain and serve, and they are often funded through different paths, like family, bank financing, or personal savings. As defined by the “grandfather” of the Lean Startup, Steve Blank, a startup is an organization designed to search for a repeatable and scalable business model. These businesses focus on rapid, boom-or-bust growth built around bringing new technology to market and/or innovating an unproven business model, and they are usually funded through venture capital or angel investors.
Accelerators are typically programs that support startups through extensive mentorship, education, and sometimes financing throughout a fixed-period. Accelerator programming is cohort-based, meaning several businesses go through the program, which usually lasts around three to four months, as a group. Through mentorship, education, and guidance, accelerators help entrepreneurs access resources, identify their customers, and network with other business leaders, investors, and peers. Accelerator programs typically end in a public pitch event or graduation called Demo Day.
The term “accelerator” often gets interchanged with “incubator”, which are organizations that also support early-stage startups by helping them flesh out ideas and business plans. Incubators and accelerators have some similarities in that they both offer support, training, and mentorship to startups, but they also have key differences: incubators tend to have open-ended, longer timelines while accelerators have shorter, fixed durations; incubators are often self-paced, while most accelerators are cohort-based; and incubators often support earlier-stage startups while accelerators typically support startups a little farther along.
Beyond accelerators and incubators, there are lots of organizations that support entrepreneurs in different ways creating what is called an entrepreneurial ecosystem. In New Orleans, we are lucky to have many great entrepreneurial support organizations (ESO’s), which we could fill a whole separate blog post about, but for the purposes of this post, we are focusing on the role accelerators play in a startup community.
WHY DO ACCELERATORS MATTER?
A successful startup community is one where ideas are nourished, innovation is encouraged, and people feel empowered to solve problems and make the world better. And when people come together, facilitate connections, share experiences, and offer support, the whole becomes greater than the sum of the parts. A recent study from Emory University’s Global Accelerator Learning Initiative (GALI) found that businesses that go through an accelerator program raise almost eight times the investment capital as non-accelerated companies. Other studies have shown that accelerators have a positive impact on entrepreneurial ecosystems in general and that this positive impact spreads out into non-accelerated companies as well.
The impact of accelerators extends beyond supporting startups; society as a whole benefits from a strong ecosystem that encourages entrepreneurs to tackle systemic challenges, solve problems, and create opportunities across industries. And the facts back it up —the U.S. Bureau of Labor Statistics studied job creation between 1987-2005 and found that almost all new private-sector jobs were created by startups rather than legacy firms. The studies have also demonstrated that the values entrepreneurs bring to the local economy is bigger than job creation, and that an entrepreneur’s success can spread to other business, to employees, and to the community in general.
OUR WORK SUPPORTING FOUNDERS AND STARTUPS
The Idea Village founders envisioned an ecosystem in which entrepreneurs would become engaged civic leaders and pay it forward to the next generation of entrepreneurs, ensuring that New Orleans would have a vibrant, inclusive startup community. And they knew that entrepreneurs cannot be successful in isolation: it truly takes a Village. As embodied in our name, our founders intended for our organization to serve as a catalyst for a Village - a community that embraces new ideas and innovation in New Orleans. And that’s exactly what they did. With this as our legacy, we’re proud to have served the New Orleans entrepreneurship community for the last 20 years — here are some highlights:
277 startups have gone through our accelerator programs
$352 million in total capital has been raised by our accelerator participants
Alumni companies brought in $267 million in annual revenue in 2019
3,410 individuals are currently employed by alumni companies
More than half of the entrepreneurs who have gone through our programs have gone on to mentor, invest in, or found another company in the New Orleans area.
VILLAGEx ACCELERATOR PROGRAM
VILLAGEx is our flagship, intensive accelerator that serves tech-enabled startups that have a connection to New Orleans. VILLAGEx works with entrepreneurs, connecting them with resources like education, mentorship, co-working space, and tools to help them take their businesses to the next level. The accelerator program culminates in Demo Day, where the ventures showcase their work and pitch to an audience of investors and community members. Our 2020 cohort had virtual Demo Day—check out their pitches here!
Over two decades of experience doing this work has taught us a lot about what works, what doesn’t, and how to support founders in ways that foster lasting success: 66% of companies who have gone through our accelerator programs are still in business. We see ourselves as facilitators, providing infrastructure and opportunities that founders can opt into on their journey to build a successful business. We’ve learned how important one-one-one mentorship is — our program connects founders to mentors, many of whom are founders themselves, many of which have been through our programs and know the value of giving back to the next generation of leaders. Our mentors offer founders support, guidance, share their hard-won lessons, ask important questions, and encourage constant improvement and resourcefulness.
We’ve also learned how crucial a sense of community is—the entrepreneurship journey can feel lonely at times, and research has shown that entrepreneurs with strong connections, communities, and support networks have better results. Beyond a community of mentors, our program fosters connections through our cohort-based structure with abundant networking opportunities with peers and investors. We also offer our founders community support locally and globally: locally, New Orleans is our home base, and the city offers incredible opportunities from both an entrepreneur ecosystem perspective and a cultural perspective—we embrace anyone who chooses to call New Orleans home. Globally, we’re a part of GAN, one of the largest groups of accelerators, partners, and investors in over 120 cities around the world. This means we stay up to date with best practices and that all of our accelerator participants are connected to a global network of entrepreneurs and startups and have access to tools and resources they can leverage to their fullest potential.
JOIN OUR VILLAGE
Want to get involved in the New Orleans startup community?
If you’re a founder with a business you’re ready to scale, VILLAGEx 2021 applications are currently open! The accelerator will run from January to May 2021, and programming will be delivered virtually, with opportunities to opt-in to some programming in New Orleans (in accordance with public health guidelines). Learn more about VILLAGEx 2021 here.
If you’re a mentor and want to join our efforts to support founders, we’d love to talk! Check out our mentorship program and get in touch here.
If you have a big idea, love entrepreneurship, or just want to stay up to date on our special programming and events, you can follow us on social media to stay connected, or you can contact us directly here. We believe in the future of an exceptional New Orleans, and we look forward to building it together.