Startups: The Ecosystem and How They're Funded · Part 10 of 19
Accelerators
A fixed-length program that trades a small equity stake for a running start.
An accelerator is a fixed-length program, typically a few months, that takes a batch of early startups through structured mentorship, curriculum, and investor introductions, usually ending in a public pitch event called demo day. In exchange for a small amount of capital and the program itself, the accelerator takes a modest equity stake in each company.
What an accelerator provides
- Capital: a modest check, usually enough to cover a few months of a small team's expenses rather than a full seed round.
- Mentoring: structured access to experienced founders, operators, and investors, often on a scheduled cadence during the program.
- Investor access: the batch culminates in front of a room of investors who show up to see that program's companies.
- Founder network: a cohort of peers going through the same stage at the same time, plus a wider alumni network from every previous batch.
- Technical resources: cloud credits, software discounts, and infrastructure partnerships negotiated on the batch's behalf.
- Credibility: having gone through a well-known program is itself a signal that shortens future fundraising conversations, particularly with investors who trust that program's selection process.
- Demo day: a public event where every company in the batch pitches to a room of investors, compressing months of individual outreach into one afternoon.
A few well-known programs
These programs all accept companies across a wide range of industries, whatever focus their reputation suggests.
| Program | Known for |
|---|---|
| Y Combinator | One of the earliest and most widely recognized accelerators, running large batches across software and technology |
| Techstars | A large network of programs run in partnership with cities, universities, and corporations around the world |
| 500 Global | A global, international footprint with a strong emphasis on markets outside the United States |
| Antler | Working with founders pre-idea or pre-team, sometimes helping people find a co-founder before a company even exists |
| SOSV | Deep-tech and hardware-leaning programs, including biology and climate-focused tracks |
| HAX | Hardware and physical-world technology, historically under the SOSV umbrella |
| Alchemist | Enterprise, business-to-business startups |
| Plug and Play | Corporate partnerships, connecting startups directly with large companies as customers or investors |
| Creative Destruction Lab | A university-affiliated, mentor-driven model with a strong presence in Canada and a science- and AI-heavy company mix |
Choosing among these comes down to which program's network, focus, and location line up with the company applying. A hardware startup gets more out of a program built around physical products than one built around enterprise software sales, regardless of which name is more recognizable.