Why online accelerators are disruptive!

There is a lot going on in the world of startup funding. The traditional early stage investment model is being shaken up by a combination of equity and non-equity crowdfunding, Y-combinator type accelerators and matching engines such as Angel.co. An online accelerator combines elements of each of these models to provide end-to-end support throughout the startup lifecycle. It is highly disruptive for a number of positive reasons;

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It extends the eco-system – the strength of clusters such as Silicon Valley is the proximity of all the resources needed to grow a startup in one place. In the old model investors would not invest in companies more than an hour’s drive away. This led to small tightly-knit communities where the rolodex was king, shortly thereafter replaced by Excel and visual basic formatting. The internet is opening this up by connecting startups with investors, team members and mentors online. This will create a global startup market.

It democratises the startup world – Silicon Valley has been very effective at creating a massive funnel of startups over a very long period. It is basically a numbers game. The more startups entering the funnel at the top end, the more successes that dropout of the bottom. However, it has always been a winner takes all mentality and other clusters have been unable to replicate the sheer volume of startup activity. Funding platforms are democratic by nature. They are open to large numbers of founders and attract large numbers of investors.

It cannibalises existing business models – The model recognises that startups don’t have money. Dreamstake, one of the major UK players in this arena is a free platform, offering free startup seminars, free demo and pitching days. The platform even provides a skill swap function which allows founders to access resources without hiring or wage costs, all of which potential startups can make use of to do a lot of the legwork for free!

Founders now have a range of options when launching their tech startup.  However, very few of these options can provide free hands-on support from inception to exit in the way that the Dreamstake and other online accelerators do.

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