How to Run a Virtual Accelerator with EverytaleOctober 29 | 11 min read
“My dear, here we must run as fast as we can, just to stay in place. And if you wish to go anywhere, you must run twice as fast as that.”
― Lewis Carroll, Alice in Wonderland
We’re running—day after day. Well, not everybody, of course, some are slowly walking with no reason to hurry. This is most likely a successful older person or a schoolboy skipping school without a care in the world. In other cases, we should hurry or we’ll miss out! And if we want to be on time, and even more so, to get to the finish line first, we need to make sure we have enough gas.
We’re studying. Constantly. Well not everyone, of course… some skip lessons. Oh, that schoolboy again! I have sinned the same. But I gradually realized that information is the most valuable tool in modern life. Useless, however, without another device – a network.
Moving away from philosophy and returning to the business side of things, we can say that the rapid growth of any startup, in most cases, is facilitated by the right environment. From testing ideas to launching. From testing your pilot to commercialization and scaling. You need professional developers, business development managers, marketers, accountants, lawyers, and more! On a global level, the biggest problem is that 99% of the startups, in most cases, do not have sufficient funds to meet all their needs. (To better understand the start-up world, I highly recommend two shows – ‘Silicon Valley’ and ‘Halt and Catch Fire’!)
The largest corporations Apple and Google started with two guys in a garage. Who would have thought? Imagine… sitting in your garage one day, and that “one crazy thought” in your head someday changes the world! These were young guys with an idea, no money to invest, time on their hands, and a dream. Once that dream took off, their lack of funding was compensated by enthusiasm and talent. But that wasn’t all. As ole’ Carroll said, “you need to run very quickly…” and so they did. Now they practically run the world.
The solution suggests itself – you need to “attract” funding and investors. This is where the startup falls into the “chicken or egg” trap – you will not attract investors until the startup starts to grow and show some promise, but the startup needs money to grow. So what do you do? How do you avoid this quandary? A startup accelerator could be your answer.
What are Startup Accelerators?
(Thoughts on the current state of Accelerators.)
“Accelerator” has been a popular word in recent years. Broadly speaking, accelerators help startups grow and gain success. They usually provide selected applicants with mentorship, feedback, and the chance to attract new investors. An accelerator also conducts a Demo Day at the end of the process to bring startups and investors together for a focused pitch. A virtual accelerator program can bolster your start-up trajectory no matter where you are!
A few years ago, founders were in awe of Y Combinator, Techstars, or 500 Start-ups (Alchemist, Skydeck, Starta, and everyone else – you’re cool too, so don’t be offended). Today the number of acceleration programs has grown significantly, and as usually happens, the quality has begun to decline. This has been amplified by several factors-
– A wave of a pandemic covered the world, and accelerators went online. This somewhat leveled the user experience. It is much more pleasant to go through acceleration in the Bay Area than in a small town in Europe or Asia, sitting at a computer.
– When there are not 3, but 3000 accelerators, there are not enough experts for everyone, and “theorists” come into play, who may not help much and might even harm the project. Through a virtual accelerator, however, you can be in constant communication with a mentor from your industry from anywhere in the world.
– The emerging venture capital studios began to take money from start-ups for passing acceleration, which fundamentally contradicts the essence of this action.
Fortunately, in 2020 we managed to get into the “right” online accelerator in New York, which was practically the only one conducting offline programs during the pandemic. Maybe because the founders were Russian!
You’re probably also asking what Everytale has to do with accelerators? Here’s the thing – Everytale is a platform that can host hybrid and online events of any size: conferences, festivals, workshops… and accelerators. We’ve worked with a couple of highly credible accelerators and put all our learnings into this blog post. Everytale’s higher purpose is to create a barrier-free culture of learning and growth. Our work here fits rights into that mission.
To make this blog post relevant, it’s been split into 2 sections–
- This next part is great if you’re a start-up looking for inspiration.
- The section after this has details on running a start-up accelerator.
Useful tips for startups
A quick note on the difference between accelerators and incubators
I’d like to point out that an accelerator is not quite the same as an incubator. Many entrepreneurs in the technology sector participate in virtual business incubators, which assist new businesses in getting up and running. It’s essentially the home of angel investors, venture capitalists, and a slew of other individuals who may help entrepreneurs. Accelerators typically want to pay close attention to each firm, but incubators assist with legal and business services and product-market fit transformation. Incubators usually are more laid-back than accelerators, with offices rather than mentoring programs.
What do start-ups get out of a virtual accelerator program?
The benefits of a virtual accelerator program can include a strong support system, access to technology, and business expertise. It may be the perfect option for your start-up company if (A) you don’t yet have any physical office space or (B) are not located in an area with too many other companies going through the same process.
A virtual accelerator program is usually open to any start-up, no matter what industry you are in. They are often more flexible than a physical accelerator program and may provide initial guidance on market research, business development, and marketing. They can be an effective option for companies that need to access specific technologies and those who don’t want to move to another location. A virtual accelerator program may be more effective for companies with fewer physical resources but still offering innovative products or services.
Why participate in a virtual accelerator program?
In my opinion, a virtual accelerator program is one of the best ways to get your start-up off the ground since you get to focus solely on your business during the acceleration months. This means that you will be able to deliver outstanding results in a relatively short period. Acceleration is one of the most challenging stages, but it is also one of the best opportunities.
The main problem with a virtual acceleration program is that it’s often quite difficult to apply for them since the competition goals are very high. That being said, don’t give up on your business idea and always look for opportunities even if they are hard to come by.
Of course, you will have difficult decisions to make and you must ensure that your business idea is highly unique. Keep in mind it’s not always easy to find someone who will understand the concept of your product or service, especially if it is unique. Summarizing this information for a potential investor can really help with getting your startup off the ground, especially if you don’t have enough time to research your idea in depth. Through a virtual accelerator, you’re exponentially increasing your chances of reaching the right investors. You might just find the right person that just “gets it” and is willing to give you a chance. This could finally be your big break!
Here are the top 11 reasons an accelerator program can propel you forward with the right mindset:
1- Leaving your comfort zone
Leaving your comfort zone is the best place to start! Moving to another country requires moral effort and allows you to entirely focus on the project, eliminating all the aggravating factors that reduce your efficiency. In the process of putting things in your suitcase, you can check whether you are burning enough with the project to leave your friends, parents, a dog for a while and move 1,000 to 10,000 miles. This is very sobering.
2- Flourishing in the right atmosphere
A large cluster of founders usually generates a large number of ideas. During some sessions, we pitch projects of other founders and hear how strangers present our project with their own approach to the product, which often helps to make incredible discoveries.
3- Coaching and mentorship from industry experts
This is probably the most valuable resource for any startup and involves intensive coaching. A mentor, or coach, is a professional with many years of successful experience in an industry similar to yours. They have most likely sold a number of startups and thoroughly understand the growth mechanism of any project. The mentor knows how to accelerate your growth, coaching you all the way, and at the same time costs you nothing!
Some mentors are good at sales; others give you unlimited useful advice or serve as a fun colleague – always ready to meet with you and discuss the idea over a beer! Someone needs your shoulder for support; someone needs to help adapt the product to its target audience; everyone needs something different. The main thing is that all the mentors are top professionals who are willing to share their experiences.
Although it may sound strange to some, I believe that accelerators often do not need huge financial investments to achieve great results. Mentors are the key to accelerating any project; they can achieve more than money.
I mentioned in the previous point that a mentor costs you nothing. That’s not entirely true. An accelerator usually takes a 2-7% stake in your startup in exchange for finding mentors, speakers, investors, and other advisors. Among other things, you are allocated a team of marketers, lawyers, accountants, which cover all your operational needs and this is priceless value! Most importantly, the right accelerator invests $ 50,000 – $ 150,000 in a startup in exchange for shares above. This shows that they are in the game with you and will fight for your bright future.
5- More Funding
Each acceleration program ends with a demo day, to which the right accelerators invite a huge number of investors. Y Combinator’s 200 projects typically have 2,000 investors. Plus, “passing” an accelerator raises your estimate, setting it to the standard bar for this accelerator ($ 10M for Y Combinator, which investors don’t really like … but they invest anyway).
Accelerators usually have a good relationship with the media and provide promotional articles for the most promising graduates. The task of the accelerator is to make its share in your startup cost as high as possible so it goes out of its way to make sure you succeed!
7- Meeting potential partners, customers, and investors
You can not successfully complete a virtual accelerator without having meetings and networking with partners, customers or investors. It’s impossible to predict how these people will react to your idea and in what location, so it makes sense to talk with as many potential customers and partners during the online acceleration.
8– Building a professional alumni network
The right startups unite all cohorts of their graduates into a single space. This allows them to jointly solve emerging problems and grow a startup faster
9- Getting early users and testing the product.
If you stay in your shell, there is no one to test your beta version and give feedback on the project. The virtual accelerator allows you to check how it works in practice with end consumers and consider all their comments.
10- Learning to negotiate.
Learning to negotiate is another excellent opportunity that you can get during acceleration. Many relationships with mentors for investment for the first time face a situation where they need to negotiate and agree on certain conditions to receive funding from them. Negotiations are always a good experience, but only if you have enough money to support your company. If you need partners, this is an essential life skill that you should learn from the beginning.
11- Having fun!
Yes, this is the main result of starting an accelerator program for many :). Although many believe that it’s all about working day and night to get a start-up going, I think it’s equally important to be surrounded by other fun people who will cheer you up when nervous breakdowns come. Having the right people around you is very important because everyone who starts a business needs support.
Useful tips for accelerators
What we’ve learned from the virtual accelerators hosted on Everytale?
Before the offline demo day at our Accelerator in New York, we invited eight graduate startups (the number was limited since this was the peak of the pandemic) to hold eight round tables on our platform. The objective was to attract more attention from potential clients and investors. And the results were great! We increased our user base, introduced the teams to potential partners, and tested all the platform systems. In the summer of 2021, in conditions of total pandemic isolation, they decided to hold the first online accelerator for young Moscow startups, inviting top international Russian-speaking investors and entrepreneurs to conduct a three-month program at Everytale.
What was Everytale’s role in these accelerators?
We fulfilled several roles in the implementation of these projects:
– Attracting an audience to the platform, which in the future can also use Everytale for other virtual event needs.
– In addition to participants, investors come to the platform with whom we have established partnerships. This is extremely useful to attract funding.
– Testing updates that are released every two weeks in “combat” conditions.
– Earning! But more on that later…
It makes complete sense to run a virtual accelerator. Here’s why.
I definitely recommend having a virtual component to your accelerator for three main reasons-
1) Virtual accelerators have more flexibility than their offline counterparts. You can be much more versatile with the programming.
2) Virtual accelerators open up the pool of mentors – and investors. Virtual accelerators have opened the door for all of us to engage world-class mentors from all over the globe. This could include those with incredible technical, business, and market knowledge as well as those with a command of the language of the groups’ startups.
3) Online accelerators are far more cost-effective. For accelerators still getting their footing, online programming may be a more cost-effective business and operational model.
With virtual platforms, like Everytale in the forefront, the ability to have a virtual accelerator is not going anywhere; we’re diving into this new potential to make it better than ever before as we work to establish a more inclusive entrepreneurial environment.
What are the steps to making your startup accelerator virtual?
- Selecting the best virtual event platform
Selecting the best platform is the first and most important step to making your startup accelerator virtual. Choosing the right platform is important, so the process is seamless and you aren’t left out to dry! EveryTale has developed an easy-to-use virtual event platform, which ensures maximal engagement in your accelerator.
- Managing content.
Gathering and managing the content you need to make your startup accelerator virtual is crucial. Instead of having bits and pieces of papers, files in folders that can get ruined or misplaced, along with remembering which person has what, getting all of your content online is the key to getting organized. Everytale is perfect for getting everything in one place!
- Maintaining continuity within the team.
Have you ever heard Abbott & Costello’s, Who’s On First, What’s on Second? Well, if you want everyone to step on the same foot at the same time and maintain continuity, it needs to be virtually. Why? Well, there are Time Zones, time schedules, my son has a baseball game, left it in my car, I need to order it, spilled my coffee on it….need we say more?
- Bonding with founders.
What better way than online, to bond with people all over the world? You can jump on a quick call to bond with founders anytime and anywhere using a virtual platform. No driving, deciding where to meet and who picks up the check! (I usually pick up the check by the way) Just jump on a call and let the bonding begin.
- Demo day preparations.
If you look at #1-4, you will see all of the reasons why “Demo Day” prep will be a breeze. I know for me, I like to be organized, so I am not doing the Abbott & Costello routine! Getting everything you need in one place on a virtual platform, will make your life so much easier.
What are the main challenges we faced when running virtual accelerators & how did we overcome them?
So, the initiator of an acceleration program faces two main problems – where to get high-quality projects and where to get high-quality speakers/mentors/trackers.
1- The Right Networks
Here the word “networking”, which is already boring to everyone, comes to our aid.
Firstly, our first business, Nextouch, is connected with the supply of electronics to the educational system of Russia. In this regard, for the last eight years we have been communicating one way or another, with all communities related to the educational process. In addition, we are located in a special economic zone, where only innovative projects are accepted, so we are surrounded by companies similar to us.
Secondly, for the last three years, we have been building an IT startup. The IT market in Russia is tiny in comparison to the US, so, roughly speaking, everyone knows each other. I’m talking about both the entrepreneurial and the early-stage venture capital community. Thus, we have access to more than a million Russian-speaking users and a wide range of potential speakers – successful entrepreneurs and business angels.
2- The Accelerator Themes/Topics
Next, a technical question should be resolved – how to form a project funnel and by what criteria to evaluate it. We must immediately determine the topic of the accelerator.
The most successful are accelerators with highly specialized competence which attract only startups from the relevant field. For example-
– Comcast Sports Tech – Accelerator for startups in the sports industry
– HAX – Accelerator for hardware startups
– IndieBio – Biotechnology accelerator
– R / GA – Accelerator for startups in the Internet of Things industry
– The Yield Lab – Agrotechnical accelerator
You get the idea.
In our case, we did not have a narrow competence, and the venture capital market was so small that it simply did not make sense to choose startups from a specific industry. We wouldn’t have recruited the required number of projects. Therefore, we divided the experts into several industries: FinTech, EduTech, FoodTech, IoT, E-comm, and Marketplaces.
Based on this division, projects immediately understand which experts they will get to, and how valuable the acceleration program will be for them specifically.
The experts in our accelerator were venture investors TMT Investments, SMG Ventures, Starta Ventures, Mindrock Capital, Altair Capital, LETA VC, Runa Capital, Kirovfund VC, S7 Ventures, and many others.
3- The Selection Process
The Applications were collected through a landing page connected to a CRM data collection system. Everything is standard here, so there shouldn’t be too many problems at this stage.
The competencies and contacts acquired during our work allowed us to develop an online accelerator program within two months and collect more than 1000 applications. Out of these, 400 projects were selected to the pre-accelerator, and 40 went to the acceleration program. So how do we filter the candidates?
The selection criteria were:
– The stage of the project. The teams were at various stages in their growth- those with the idea of creating a startup, those with a working prototype, and even those with significant sales in the local market. The approach to such startups is very different in the set of mentors and speaker competencies. A validated idea has a significantly higher chance of success.
– The team. No matter how good an idea is, it doesn’t cost anything until it comes to fruition. We want to be wrong, but sometimes it is clear from the founder that he will not be able to withstand the challenges that will throw him down. A strong team can pull off an average project, and a weak team can fail an excellent one.
– Market size. A venture capitalist will only invest in a project that has the prospect of growing 100 times in a short period of time. For this, the market size must exceed at least $ 1 billion. If the market is smaller, the investor is not interested in investing, because there will be no one to sell the project to.
– Unit economics. This is an indicator that characterizes the economic efficiency of the project. If you spend $10 to acquire a customer who brings you $9, then the growth in the number of users will not make you rich, but ruin your business. Unit economics should converge (be positive) for at least 5 years. At some point, you should start earning.
4- The tech challenges of running the accelerator virtually-
After the selection, the acceleration project itself begins. And here the problems of remote communication become clearly apparent. Participants do not arrive on time for speakers’ lectures, people often communicate on the go (or on the run) on mobile devices and in places with poor internet quality, and so on. On one hand, this demotivates the speakers, but on the other hand, it allows you to immediately cut off those companies that cannot adjust their schedule to the acceleration program, and do not value it enough to truly commit.
5- Keeping the engagement levels high
Gamification and retention of attention are the main tasks that need to be solved to maintain the effectiveness of the educational process. At Everytale, we focus on customer engagement around the clock and build collaboration tools to boost user engagement.
The accelerator activities on the platform are divided into:
– Lectures by international entrepreneurs and investors. They cover the issues of determining the target audience and market size, presentation art, calculating basic metrics, correct legal design, and sales automation. Communication takes place in the mode of dialogue or round table.
– 1 on 1 work with project mentors. This is held several times a week with every startup. During these meetings, goals for the week or month are set and the progress of startups is tracked by focusing on specific metrics.
– Pitch sessions. They are attended by 5-6 venture investors, who listen to 5-6 pitches for 3-5 minutes and conduct a series of Q&A in order to gradually improve the quality of the presentation in 3 months.
6- Timing is almost everything
The timing of the online program is critical, participants must be prepared to receive information and must not be busy. For example, taking their child to kindergarten or stuck in traffic. In our case, lectures were held at 8 p.m. on Tuesdays and Thursdays, 1 on 1 sessions were planned depending on the workload of mentors, and pitch sessions were on weekends at 12 PM.
The accelerators last 3 months and end with an online demo day, to which dozens of venture investors are invited to determine the winners of the accelerator and invest in their favorite projects.
7- Measuring success
Success is calculated by the number of future unicorns who graduate from the accelerator. In our case, progress can be seen only in a year. We’ve already had two companies who’ve received an estimate of over $20 million. Plus a number of startups have received grants for training in the United States or $20k for pilot launches of their projects in large corporations.
An exciting result of the program was that large partners came to us who requested assistance in conducting similar acceleration programs under their brand on our platform. As a result, at the beginning of 2022, Everytale will run 3 accelerators simultaneously in Russia and the United States. And our main goal is precisely to build a professional community on Everytale, to accelerate the growth of participating startups.
What about the money?
I promised to touch upon the financial side of the acceleration program. The economic efficiency of an acceleration program directly depends on the costs of its implementation and takes into account funding sources.
Y Combinator gives each participant of the acceleration program $125k for 7% in the project and earns on the sale of shares after the growth of the startup. In addition to the cost of buying a share, the main cost items of an online accelerator are the costs of mentors/experts.
Unlike an offline accelerator, there are no infrastructure costs (rental of premises). We have minimized the cost of mentoring since successful entrepreneurs see it as their duty to pass on knowledge to the younger generation. Our costs consisted of the salaries of specialists who managed and reported statistics on the growth of startups or resolved technical issues during the program. We also bore the costs of the cloud infrastructure to provide online learning.
For the implementation of the project, we attracted a fund interested in the growth of regional startups. They covered the costs of participation. During the program, we assembled a professional acceleration team and unexpectedly found a niche in conducting acceleration programs for corporate customers with 10,000+ employees and clients. Such programs allow unlocking the potential of line employees, increasing customer loyalty and brand awareness among the audience.
Why do we do what we do?
Accelerator programs provide immense value for start-ups. They’re an opportunity to grow and learn from other like-minded entrepreneurs, as well as access mentors and advisors who’ve gone through the process themselves. The variables that make up successful accelerator program experiences differ for each organization running them. It is important to find one that matches your company or niche best before applying.
The main goal of the Everytale Accelerator program is to create a supportive community for young entrepreneurs. We have carried out the first acceleration program and are launching the next one. Hopefully, our community will grow to thousands of entrepreneurs in the next couple of years.
Silicon Valley is not a point on the map. It is an ecosystem that helps startups to open up and grow at a high rate. Starting from Russia, we are trying to create a suburb of the Valley in an online format!