Corporate Accelerator - Post Program
Alumni and Investments
Overview: Post-program is the time to take stock and tweak the corporate accelerator process. Accelerators are a unique business proposition. Their role is to increase the rate and quality of learning over a short period, but they also exponentially expand the reach of a corporation for the long term.
Accelerator require long-term management. They improve over time, and their popularity depends on the quality of the selected applicants and mentors. The graduates from an accelerator join an alumni network, which broadens the accelerator and the corporation’s connections. Each new startup member through the program is a future alumnus who is often willing to re-invest time and money in the organization.
The infographic below shows how such networks play out in real life for Y Combinator.
The best accelerators provide outreach events and regular interactions for their alumni. For example, Thomas Kohler of the Harvard Business Review notes that a demo day for alumni before the real public pitch can garner constructive feedback and engage the accelerator community.
Still, post-program, entrepreneurs expect and appreciate support. For example, according the Aspen Institute report Bridging the "Pioneer Gap," accelerators offer public relations opportunities, connections with investors, board participation, recruitment support, regional meetings, online funding and promotion opportunities, even office space. This is particularly true if these types of support were implied when the startup was selected.
As with any project, there needs to be a review, and founder and mentor feedback is the bread and butter of any program that wants to achieve continuous improvement. In the case of Y Combinator, a survey is sent out to graduate companies requesting anonymous feedback. The information received is crucial to improving the results of subsequent projects.
Of course, the networking aspect of the accelerator program never ends, and it’s up to the corporation to increase and leverage their involvement with promising firms. According to Kohler's case study, there are five main ways a corporation can do that.
Support a pilot project. This is a faster, cheaper way to develop innovative solutions or products, explore market opportunities through startups, or solve business challenges than trying to do so internally. The working relationship is already established, and there are fewer risks for the core business.
Become a startup customer. The corporation is an obvious early customer for the startup. At the same time, interaction with multiple startups in its accelerator gives a corporation access to different solutions to their business challenges. There are mutual benefits if the startup wins the company as a high-profile customer and the corporation finds a solution to its pain points, including product/market fit and scaling.
Become a distribution partner. A startup that can offer its products through its corporate accelerator sponsor can avoid the cost and effort of building out its own distribution network. Such channel partnerships can be mutually beneficial if they also solve a problem or create a new market for the corporation.
Invest in a startup. Just as the startup benefits from the corporate accelerator’s distribution network, the corporation that invests in its startups does so with lower capital requirements. They may see quicker ROI and access to new markets and capabilities.
Acquire a startup. Acquiring a startup can solve specific business problems and allow entry to new markets, according to a paper published by the Journal of Management. There is no scouting for the right acquisition target. This arrangement is also an appealing exit strategy for the startup.
Up next in corporate accelerators, Accelerator Governance - Where Metrics Matter