With unemployment remaining a very real concern for British workers, many are taking the matter into their own hands by launching a business which, if successful, will guarantee them a steady income for years into the future. However, with banks remaining unwilling to lend, being unable to acquire the funds to turn plans into action often manages to put the break on many promising ventures.
This is, in part, why business accelerator programmes have seen a huge rise in demand in recent years. Accelerators, in essence, provide the funding and mentoring to help entrepreneurs get their businesses off the ground at the very beginning in exchange for equity, culminating in a “demo day” where business owners then pitch to investors as a means of securing ongoing financial support.
Yet accelerators do not simply provide financial and business support – they also give entrepreneurs a platform on which to meet other business owners, allowing them to exchange ideas and visions which could prove to be invaluable when searching for avenues to take their business further after laying down the basic foundations. This is an opportunity rarely granted to those who must work full time in order to build the finances for their start up launch.
While accelerators are often scorned by traditional business analysts, who believe that entrepreneurs will be sheltered from the cut throat world of marketing through getting a “hand out” from the outset, the aim of the programme is not to simply churn out ventures doomed to failure. In fact, the opposite is true – the combination of funding and mentoring teaches successful applicants the skills required for success; one of which is careful capital management.
CEO of Birmingham-based Oxygen Accelerator, Simon Jenner, explains; “The aim is to get start-ups revenue generating, because that gives them options.
“You can either stay revenue generating and grow organically or you are much more likely to attract investment at that point.”
Accelerators have become particularly popular in the technology sector, largely thanks to the success of firms such as Apple which grew from the ground up and inspired a wave of entrepreneurs to put their ideas forward to investors. However, another factor has been advancements in the field of technology, meaning that those looking to develop apps now have a wealth of platforms and users to cater for.
In this field in particular, accelerators are highly useful as apps can be relatively inexpensive to create and thus pose an attractive prospect for investors. Furthermore, the speed at which development can occur suits the accelerator programme perfectly, according to Mr Jenner.
He says; “If I was manufacturing a widget, it isn’t possible to accelerate it in 13 weeks.
“Prototyping, getting mocks made up, getting it through the manufacturing process and all the approvals you need all takes time.”
Do you think that the UK technology sector in particular would benefit from a greater number of accelerator programmes, or would this flood the market and thus lessen the chances of survival for individual entrepreneurs?
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