What is an accelerator and how could it help your business grow?

What is an accelerator and how could it help your business grow?

business accelerator programmeBusiness accelerators invest £33 million into UK start-ups every year, with more than half a million start-ups launched yearly since 2015[1]. The Business Finance Guide caught up with Russell Copley, Managing Director of Greenborough and founder of Lincolnshire accelerator programme, ‘10 by 10’.

We found out about the role accelerators play for UK businesses, including how they typically work and how they could benefit businesses seeking growth, regardless of sector or maturity.

What are accelerators?

A business accelerator is a fixed-term programme that provides start-ups and SMEs access to mentorship, investors and resources to help them become stable, established and profitable businesses.

Accelerators typically focus on early-stage businesses, building their business ideas through intense training and mentoring before helping them to pitch for investment. They often invest a specific amount of capital in return for a predetermined percentage of equity to cover the cost of the programme they’re running.

 

Ask the expert: Setting up a business support programme

Russell Copley - owner of acceleratorStarting the business from scratch in 2003, which Russell describes as ‘one of the scariest yet best things I’ve ever done’, Greenborough is home to a range of business growth and project management services, designed for start-ups to larger public service clients.

The business uses public funding, like The European Regional Development Fund, to provide management skills and support to SMEs to help them become more investment ready.

Whilst offering businesses support with pitching for equity funding, Russell has worked with Angels Den, Europe’s largest network of business angels, to refer those companies for equity funding.

He has also spent the last four years working with development programmes such as Oxford Innovation on their pitching competitions and running coaching workshops for growth hubs.

“It was at one of these competitions that we saw the opportunity to set up a different type of accelerator programme in Lincolnshire, without the constraints of public funding.”

What does it cost to join an accelerator programme? 

The cost of joining an accelerator programme varies enormously. The accelerator will look for remuneration in the form of in time, equity or money. But it’s not just about cost. Because accelerators vary significantly, the key is to find out what each programme offers and determine which will give your business the best opportunities and value for money.

 

A structured fast-track accelerator programme

Greenborough offers one of many accelerator programmes in the country that helps companies improve their business strategy and become more fundable. Their 10 by 10 programme is entirely privately funded and focuses on Lincolnshire businesses.

This structured fast-track course offers 10 businesses a half-day workshop every week for 10 weeks around a range of key themes, tailored to the businesses’ individual circumstances.

Some key elements of the programme include:accelerator programme winner

    • Open to a range of companies from those yet to start trading to ones that have been around for 15 years
    • Simple application process
    • Tailored approach
    • One-to-one generic and specialist mentors
    • Support from facilitators and trainers
    • Combination of masterclasses, workshops and interviews
    • Range of topics covered (resources, finances, collaboration, business modules)
    • Structured approach to ensure any lessons learned will be implemented in the future

 

The role of peer-to-peer learning

accelerator programmeA crucial part of the 10 by 10 programme is peer supported learning, where businesses are given the opportunity to network and form self-help groups. Peer-to-peer learning is a two-way process where, in this case, businesses learn from each other by sharing knowledge, ideas and experience as well as evaluating their own approach.

Using this method, companies in the 10 by 10 programme can bounce ideas around, learn from similar stage businesses and implement these learnings in the future – helping them become more established, self-sufficient businesses.

“The focus on a business is at the heart of everything we do. From formal feedback we’ve received after each workshop, the peer-to-peer support has continuously come out on top. This is why we believe collecting frequent feedback is so important as it allows us to measure the value and use it to form a constantly evolving approach”

 

Setting yourself apart

The 10 by 10 programme takes a bespoke approach, where businesses are put through a careful mentor matching process. Mentors can contextualise and personalise each session to the specific audience, making it more valuable to individuals than traditional training methods.

“We choose businesses from a variety of different sectors at all levels of maturity but ensure they all have one thing in common: The ambition to grow, the passion to grow and the ability to grow. This business mind set is absolutely vital in order to succeed in the programme.”

Accelerators vs Incubators 

We quizzed Russell on his definitions on accelerators and incubators and how to differentiate between them:

Incubators

The original definition of an incubator is a physical building that offered anything from zero to discounted entry fees (license fees, rent, service charge) for a limited period (typically three years). During this time, the Incubator would progress very young businesses to the point where they could stand on their own two feet professionally, personally and financially.

Good incubators tend to operate at 85% occupancy rates, so always have some space for the immediate ‘I need space now’ business. They also have a graduation policy to try and move people through the programme in two to three years’ time.

Accelerators

Accelerators are typically less property based and more focused on process and fast-tracking businesses to reach their potential. Unlike many accelerators, Greenborough’s 10 by 10 programme is not focused on the specific sector, region or age of business.

For example, we’ve taken businesses from pre-start to 10 plus years of training. 10 by 10 aims to enhance the ambition and ability of these businesses and give them some better tools to grow.

Put simply, accelerators can help businesses accelerate their growth, but it’s less about the day-to-day nurturing and more around speed.

Look out for our upcoming feature which will compare accelerators and incubators and offer useful links to help you find the right support for your business.

 

Russell’s top tip for businesses looking for help to grow their business

business growth

“Talk to people who run the programmes and those who are on or have been on them because a lot of it is about ‘if it feels right, it is right and if it feels wrong, it is wrong’.

“A business won’t get as much out of a programme or environment as they could do if they don’t feel entirely comfortable. Businesses going through one of these programmes have to put a lot of effort in and bare their soul in order to succeed. If they don’t feel comfortable, or agree with the approaches of the programme, they won’t put maximum effort in. Simple.”

 

Looking for advice on how to grow your business? Visit the ‘invest in advice’ section here

Need help finding an accelerator or incubator in your local area? Read our ‘What are growth hubs?’ article

 

[1] Market Inspector 14 November 2018 https://www.market-inspector.co.uk/blog/2018/06/business-accelerators-for-startups-uk

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