MoMoLo: Accelerators and Finance

mobilemondaylondon.gifLast night I was at Mobile Monday London where the topic was Accelerators and Finance. John Spindler, CEO of Capital Enterprise gave a presentation on available finance and accelerators in the UK and Jessica Stacey from NESTA gave some insights into NESTA’s research into accelerators. John then chaired a panel consisting of Jessica, Simon Cook of DFJ Esprit, Brian Taylor from PixelPin, Diane Perlman of Microsoft Ventures, Simon Devonshire from Wayra (Telefonica) and John Bradford of Techstars London. Here are some aspects I found noteworthy…
  • One of the main benefits of accelerators is gaining contacts
  • While money might be the initial attraction, the amounts (typically £75k) tend to be too small to take the company through the accelerator and additional funding is usually required
  • It was mentioned that accelerated companies can gain as much from their peers as they do from the more formal accelerator activities
  • Many startups actually spin out of startups and/or end up investing in further startups
  • Between 5% and 9% of of the TSB applicants get funding
  • Only a small proportion, estimated to be 1% of 1% of UK SMEs go through the VC route
  • For the Techstars accelerator, about 10 or 11 companies get picked out of every round of about 1500 applicants
  • When picking, the team tends to be more important than the individual or idea
  • An accelerator usually accelerates something that already exists and it’s rare that it’s just an idea on paper unless it comes from someone who has previously had ideas that have proven to be successful
With so few companies actually taking the accelerator route, there was a question as to what non-accelerated companies could take/gain from the accelerator ecosystem.  Diane Perlman said that Microsoft extends some of the networking aspects of Microsoft Ventures to BizSpark members thus widening the benefit. John Bradford explained that similar techniques, used by accelerators, can be applied to any startup. For example, if you need advice find the three cleverest people you know and seek their advice while taking them out for coffee. Ask them to recommend three other clever people and repeat the process several times. When you get to about 27 people you will find patterns in their response that you should find useful.