Table of Contents
How much do accelerator programs cost?
Typical fees are between $25K to $50K in the US. These EIR programs are full immersion programs and last 6-12 months or 1-2 cohorts. During the program, the EIR is going through the entire process from start to finish and “learning on the job”.
Do accelerators work?
To summarize, accelerators can have a positive effect on the performance of the startups they work with, even compared with other key early-stage investors. By and large, accelerators seem to be a positive addition to startup ecosystems across the country and the world.
Are accelerators free?
Accelerators are businesses and they have a bottom line. Free accelerators are generally funded through grants and corporate funding, while accelerators that charge a fee are pure profit organisations.
How much does it cost to run an accelerator?
Accelerators also have a staff of 1-5 people (some even more, but the average is 1.8) to manage the program, support the startups and recruit, select and engage the local community and ecosystem of entrepreneurs. All this costs money. In the US, that’s usually upwards of $400K (that’s the low bar) and in other countries, more than $250K per year.
Do accelerators charge management fees for their programs?
While investors in the accelerator are willing to fund the startups (and take a \% stake in them), most are unwilling to pay a “management fee” for running the program. Having interviewed and talked to many accelerator programs, over the last year, I have a list of 9 different ways programs have tried to raise the operating costs of the accelerator.
What does it mean to improve your operating costs?
Improving your operating costs means putting yourself ahead of your competition. Small business owners should always be looking for ways to reduce their operating costs without sacrificing the quality of their offering or making the lives of their employees more difficult. So, what are the best ways to reduce operating costs?
How do startup accelerators raise funding?
Many accelerators also raise sponsorship from local legal, accounting and real estate firms who benefit from the startup community or wish to target entrepreneurs and startup talent with their products and services. Nearly 60\% of companies and 30\% of all operating budget funding is sponsor driven for the 15 accelerators I know.