Proximity has always impacted a founder’s ability to fundraise. Being personally engaged in the tech ecosystem allows founders to create connections and build trust with investors. The Global Accelerator Network reported that 17% of accelerators were partially or fully virtual in 2018. In 2020, 67% of accelerators went virtual due to Covid. Last year, 22% of accelerators met virtually or in person 2x per week.
Image: Global Accelerator Network
We refer to Cohen and Hochberg’s (2014) definition of accelerators. The research defines the idea of a startup accelerator as “a fixed-term, cohort-based program, including mentorship and educational components, that culminates in a public pitch event or demo day.” However, you can apply these general features to any founder support organization.
Today, most accelerators are still 100% virtual or hybrid. With increased virtual programming, founders find it easier to participate in accelerators no matter where they are located. They can find a better startup-accelerator fit by looking for programs that service their type of company and stage. The downside is that accelerators’ low daily attendance in physical spaces makes networking and connection-building challenging.
Let’s look at the stats from GAN-data from 2018, 2019, and 2020 infographics mapped to the mentors/investors within a 100M radius.
In 2018, 57% of startups joined an accelerator within 100 miles of where they lived. In 2019, there’s a slight increase, with 60% of startups located within 100 miles of accelerators. At the same time, 81% of mentors came within a 100M radius. In 2020, 59% of startups lived within a 100M radius. Today, about half of participants live outside 100 miles from the accelerator location than within.
The concern with virtualization is that founders cannot build the necessary relationships to drive business growth. The impact of virtualization shows up in extended fundraising timelines, limited numbers of new partnerships or sales channels, less business knowledge acquired, and a reduction in founder bonds formed within cohorts.
Startup Accelerator Virtualization: Ensuring Connection Creation
As an accelerator, it is essential to think about how the founder will create bonds (personal and professional) within the ecosystem. The more interactions your business has with the ecosystem, the “stickier” your interaction with them will be. Founders need to build and leverage human connections to achieve business success. As an accelerator, it is paramount to support founders in making these human and business connections. The lack of interaction particularly impacts founders with low investor and business networks.
Don’t get us wrong — we are not saying it’s impossible to connect virtually. There are many resources providing quality tips on how to build relationships online. Though helpful, what is not shared is that virtual-only relationships can take longer to become meaningful in a founder’s life. The most valuable asset to a founder is their time, and the elongated timeline to build relationships can strain their runway and even put them out of business.
For accelerators who are 100% virtual or hybrid, here are some recommendations to increase the founder’s opportunities to build connections and create bonds:
- Have program kickoff/ mentor matching and demo day as hybrid events IRL & Virtual
- For example, in 2022, TechStars Boston hosted a live demo day with virtual streaming.
- https://www.bostonglobe.com/2022/02/21/business/in-person-pitch-makes-comeback/
- For example, in 2022, TechStars Boston hosted a live demo day with virtual streaming.
- Have a mid-program IRL gathering
- Have boot camp in-person sessions
- For example, Agora is a sustainability accelerator focused on Latin America based in Nicaragua and Washington, D.C. They incorporate in-house “boot camp” style programming and virtual (e.g., online/phone) support.
- Create optional in-person touch-points throughout the program
- Have founders come together as often as possible through hybrid activities (IRL & Virtual), For example, weekly OKR check-ins, office or mentor hours, and working sessions.
- Work to support the founder’s ability to meet with founders, mentors, and investors at least twice throughout the program.
- Communicate with mentors and investors about the importance of relationship building and in-person connection.
- Implement best practice tools to ensure deeper connections through the virtual experience
- For example, leveraging structured and unstructured zoom calls to have informed conversations and inspire authentic dialogue and relationship building.
We recommend hybrid accelerator models to help founders develop stronger bonds and relationships with the local tech ecosystem and investor community as we navigate this new landscape. Proximity to the accelerator location firmly impacts the founder’s ability to fundraise. As an accelerator, think about enhancing relationships and tracking how you create network access for your founders to set them up to be successful post-program.
The Impact of Location on Founder Success and the Case for Hybrid Accelerators
Proximity has always impacted a founder’s ability to fundraise. Being personally engaged in the tech ecosystem allows founders to create connections and build trust with investors. The Global Accelerator Network reported that 17% of accelerators were partially or fully virtual in 2018. In 2020, 67% of accelerators went virtual due to Covid. Last year, 22% of accelerators met virtually or in person 2x per week.
Image: Global Accelerator Network
We refer to Cohen and Hochberg’s (2014) definition of accelerators. The research defines the idea of a startup accelerator as “a fixed-term, cohort-based program, including mentorship and educational components, that culminates in a public pitch event or demo day.” However, you can apply these general features to any founder support organization.
Today, most accelerators are still 100% virtual or hybrid. With increased virtual programming, founders find it easier to participate in accelerators no matter where they are located. They can find a better startup-accelerator fit by looking for programs that service their type of company and stage. The downside is that accelerators’ low daily attendance in physical spaces makes networking and connection-building challenging.
Let’s look at the stats from GAN-data from 2018, 2019, and 2020 infographics mapped to the mentors/investors within a 100M radius.
In 2018, 57% of startups joined an accelerator within 100 miles of where they lived. In 2019, there’s a slight increase, with 60% of startups located within 100 miles of accelerators. At the same time, 81% of mentors came within a 100M radius. In 2020, 59% of startups lived within a 100M radius. Today, about half of participants live outside 100 miles from the accelerator location than within.
The concern with virtualization is that founders cannot build the necessary relationships to drive business growth. The impact of virtualization shows up in extended fundraising timelines, limited numbers of new partnerships or sales channels, less business knowledge acquired, and a reduction in founder bonds formed within cohorts.
Startup Accelerator Virtualization: Ensuring Connection Creation
As an accelerator, it is essential to think about how the founder will create bonds (personal and professional) within the ecosystem. The more interactions your business has with the ecosystem, the “stickier” your interaction with them will be. Founders need to build and leverage human connections to achieve business success. As an accelerator, it is paramount to support founders in making these human and business connections. The lack of interaction particularly impacts founders with low investor and business networks.
Don’t get us wrong — we are not saying it’s impossible to connect virtually. There are many resources providing quality tips on how to build relationships online. Though helpful, what is not shared is that virtual-only relationships can take longer to become meaningful in a founder’s life. The most valuable asset to a founder is their time, and the elongated timeline to build relationships can strain their runway and even put them out of business.
For accelerators who are 100% virtual or hybrid, here are some recommendations to increase the founder’s opportunities to build connections and create bonds:
- Have program kickoff/ mentor matching and demo day as hybrid events IRL & Virtual
- For example, in 2022, TechStars Boston hosted a live demo day with virtual streaming.
- https://www.bostonglobe.com/2022/02/21/business/in-person-pitch-makes-comeback/
- For example, in 2022, TechStars Boston hosted a live demo day with virtual streaming.
- Have a mid-program IRL gathering
- Have boot camp in-person sessions
- For example, Agora is a sustainability accelerator focused on Latin America based in Nicaragua and Washington, D.C. They incorporate in-house “boot camp” style programming and virtual (e.g., online/phone) support.
- Create optional in-person touch-points throughout the program
- Have founders come together as often as possible through hybrid activities (IRL & Virtual), For example, weekly OKR check-ins, office or mentor hours, and working sessions.
- Work to support the founder’s ability to meet with founders, mentors, and investors at least twice throughout the program.
- Communicate with mentors and investors about the importance of relationship building and in-person connection.
- Implement best practice tools to ensure deeper connections through the virtual experience
- For example, leveraging structured and unstructured zoom calls to have informed conversations and inspire authentic dialogue and relationship building.
We recommend hybrid accelerator models to help founders develop stronger bonds and relationships with the local tech ecosystem and investor community as we navigate this new landscape. Proximity to the accelerator location firmly impacts the founder’s ability to fundraise. As an accelerator, think about enhancing relationships and tracking how you create network access for your founders to set them up to be successful post-program.