18th January, 2022
Startup accelerators exist to help get your fledgling concept off to the best possible start. In this article, we discuss how they do this and what you can expect when joining.
Australia and New Zealand are home to many accelerator programs that assist startup founders in optimising and maximising their businesses – providing them with many of the tools needed to build strong foundations.
It wasn’t that long ago that some of today’s largest technology businesses were nothing but a founder or two with an interesting idea.
For instance, Dropbox started in 2007 after its founder, a university student in the US, repeatedly forgot his USB flash drive at home. Today, it’s one of the world’s largest and most successful tech startups.
Airbnb also started in 2007, after its US-based founders put an air-mattress in their living room and turned it into a bed-and-breakfast. Today, its market value exceeds $100 billion.
AirWallex was founded in Australia in 2015 by a number of Melbourne University alumni who were looking for a side-hustle to supplement their day jobs. Today, it is a global leader in foreign exchange (forex) services.
What do these businesses have in common? They all joined accelerator programs in their early stages.
Startup accelerator programs provide early-stage startups with a series of tools and services that enable them to launch their venture in an environment that is conducive to success.
The tools on offer generally include mentorship, access to a range of professional services, a workspace, and many networking opportunities.
In most instances, accelerator programs operate as venture capital firms and offer Seed or Series A funding to their cohorts. Unlocking the program’s funding is often dependent on whether the business manages to pass a series of predefined milestones that are set out by the program.
Given that accelerator programs are cohort based, they also provide the opportunity to collaborate with like-minded founders who are dealing with the same challenges in their own businesses.
Most accelerator programs run for three to four months and will only take on one to two cohorts per year, depending on the duration of their program and their recruitment capabilities.
Eligibility criteria to join an accelerator can vary depending on the program, but as a general rule, founders need to have passed the ‘idea’ phase of the startup, and have some sort of proof of concept available for demonstration.
There are also a number of key steps that most programs will require applicants to go through to be accepted into the program. These steps tend include:
Once these steps have been completed, the startup is ready to join the program.
While they might often be used interchangeably, accelerators and incubators are different, and should therefore not be confused by startup founders looking for early stage support.
Accelerators generally possess the following qualities:
Conversely, incubator programs tend to be:
Both types of programs can be valuable, but it is important to recognise the limitations of incubators, and the commitment and rigidity of accelerators, before choosing the type of support your startup needs.
Structure and direction can do wonders for early-stage startup founders, and well-run accelerators programs provide exactly that.
Some of the key reasons for a startup founder to look into joining such a program include:
In their early stages, startups can be overwhelming to run. Optimising the product-market fit, capital raising, building a team, and constantly iterating and improving the product are just a few examples on the never ending to do list of a founder.
Joining an accelerator gives direct access to early-stage capital, significantly reducing the time and effort required to raise funds independently. Moreover – even once the startup graduates from the accelerator program, it’s not uncommon for the accelerator to continue injecting capital each time the business is raising.
Joining such a program can help a founder stay focused on the big picture without getting lost in the many distractions that can arise during those early stages.
Getting a business off the ground can be quite a lonely process too, making the comradery from fellow cohort members an invaluable asset for any founder.
Joining a program and gaining access to investment is naturally going to be tempting for almost any start up, but there are other qualities that founders should be on the lookout for when considering whether an accelerator program is going to be beneficial for them.
A good accelerator program is hard to get into. They should be receiving lots of applicants, and have a fairly exclusive shortlist from which they ultimately choose their cohort.
If you’re finding it challenging to go through the application process, that’s probably a good sign, as it means the cohort and program will be of a high standard.
Founders should be on the lookout for a program that is appealing to a specific vertical of startups (for instance, fintech, agtech, healthtech, and so on), or to startups that are at a certain stage (for instance, pre-commercialisation, scale-up, and so on).
Joining a program with a focus on startups just like yours will ensure that the experience is as tailored and relevant as possible.
Before applying to join an accelerator program, take a look at their list of success stories. Programs with an impressive list of vibrant and thriving startups with track records of positive culture and agility are the ones that founders should be aiming to join.
These alumni are normally listed on the accelerator program website, and alumni companies will generally mention their accelerator program in the ‘about’ section of their own websites too.
The organisation that backs the accelerator program is another important quality that founders should be weary of.
If the startup is very research heavy, perhaps an appropriate backing would be a university with access to research facilities. If it’s a scaleup fintech, maybe a program run by a VC firm with large networks in various countries would be ideal.
Whatever the case is, the organisation that backs the program is the ultimate decision maker – so being aware of who they are and what they stand for is an important consideration point.
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Startups in Australia and New Zealand are fortunate enough to have access to a broad range of accelerator programs.
Here are a number examples of reputable and established programs across both regions.
Recently launched in New Zealand, Electrify Accelerator is the first such program aimed at women and non-binary founders to arrive there. Led by the Ministry of Awesome and backed by a collective of the country’s most prominent venture capital funds, it aims to take 10 successful applicants through a 12-week program to be delivered mostly online, with two in-person events hosted in Christchurch.
MAP is a Melbourne-based program that is backed by the University of Melbourne, which takes on cohorts with a major focus on social impact. MAP has supported many startups over the last decade, including Allume Energy, which creates unique renewable energy solutions, and Bindimaps, a software application that aims to make indoor spaces as accessible as possible to all people.
Based in New Zealand, Sprout focuses on startups operating in the agriculture sector with a high-growth mindset. Examples of startups that Sprout has supported include Cropsy, a solution that provides data on vineyard health, and ProTag, an animal welfare startup that aids farmers in monitoring their cows.
Remarkable is all about disability-tech. The program is based in Sydney and supports startups that are looking to create solutions that increase quality of life for those living with a disability. Some examples of Remarkble’s alumni include PolySpine, a startup that has created a head and spine support system that enables people with physical disability to partake in various recreational activities, and Xceptional, an organisation that helps those on the autism spectrum with their recruitment needs.
Based out of the University of Queensland (UQ), iLab specifically caters to early-stage startups founded by its current students, alumni and staff. Some of the program’s alumni include Endla, which was founded by a UQ graduate and designed to improve the lifetime value of oils and gas wells, and Bloom, a startup that helps people invest their money in profitable and impactful businesses.
Based in Perth, Plus Eight has been running its program for innovative WA-based startups of all kinds. Some of its success stories include uDrew, a building technology startup that enables anyone to create a customisable and interactive building plan, and Ads On Wheels, a business that turns private cars into advertising billboards.
Dovetail is based in New Zealand and is a longer-term (12-18 month long) startup accelerator that brings on and invests in early stage technology startups, and prides itself in partnering very closely with its portfolio companies. One of its portfolio companies is Marmalade, a service that enables businesses to have invoices paid off quickly for a low fee, and ChemCloud, a digital procurement solution for the chemical industry.
Skalata is a relatively new, Melbourne-based accelerator program, and since the pandemic, has been accepting cohorts with members from around Australia. Skalata looks to help founders create long-term business solutions, and therefore likes to target startups with established businesses. Choovie, an artificial intelligence driven movie ticket selling solution, and Emanate, a software solution to help independent music artists monetise their work, are both examples of some of the businesses Skalata has supported to date.
Focusing specifically on helping high-impact founders deploy low impact energy solutions, Energylab runs accelerator programs across the country. The takes on multiple cohorts a year, and only accepts businesses with strong climate mitigation strategies. Examples of its alumni include uPowr, an AI-driven solution for precise solar and battery installation quotations, and Evergen, a startup specialising in solutions for solar and battery power optimisation.
CivVic Labs is a pre-accelerator program which is run by the Victorian State Government that supports early-stage founders looking to solve public sector challenges. Some of its alumni include Envision Systems, which solves public transport traffic-flow issues, and Sky Ledge, a unique business intelligence startup.
As one of Australia and New Zealand’s longest running startup accelerators, StartMate is renowned for the high quality programs it has been running for over a decade. The program targets the most ambitious founders, and pools its investment funds from its mentor community – a unique approach that gives the program’s mentors even more reason to provide quality advice. A couple of StartMate’s notable alumni include Drawboard, a cutting edge PDF mark-up tool, and Josef, a legal automation startup with a range of unique software solutions designed for legal professionals.
If you’re a startup founder looking for structured support throughout the challenging early stages, as long as you know what to look out for, joining an accelerator program can help lay the foundations for a long-term, sustainable and successful business venture.