Fintech accelerators have become an integral part of a startup’s lifespan, despite some of the recent, not-so optimistic sentiments.
From giants like Techstars and Barclays, to small, community-based programs, accelerators or incubators now cover all the imaginable fintech sectors, promising to give your brand-new company a jump-start.
But almost none of those programs guarantee that you’ll exit as the next Venmo, or that you’ll even secure any funding at all. What startups usually end up with is not material, so it’s up to them to make the best out of it.
So what does the accelerator afterlife look like, and how should startups navigate through? Here are three things to know.
1. You never really graduate a program (if you chose right).
Yes, technically there is an end to every accelerator program. But, according to Shelli Vernet, project manager at INV Fintech, this pub’s sister accelerator, startups “never really graduate” an accelerator program.
“Most of the accelerators have an alumni network, and mentors and advisers are always open to maintaining a relationship with them too, the relationship is never over,” she said. Of course, startups should do their part in keeping that connection alive, she added. “Once the program is done, you will be working on your startup, so update your accelerator, tell them ‘we did this and that.’ It keeps startups in the back of my mind, and when someone comes to me with a problem, I’ll know who exactly has the solution.”
The trick here is to figure out which accelerator nurtures “postgraduate” relationships. “A lot of the programs are pushing their regimen and process of connecting to their set of mentors, which may not be the best use of a startup’s time,” said Vasilios Roussos, managing director at DCU Fintech Innovation Center. “We are more ‘unstructured’ in that sense, which allows startups to benefit from a wide array of potential connections. We will also help connect them [startups] to potential POC customers, when it’s the right time for them.”
Asking the alumni network of a given accelerator for a feedback is another simple way to research for the most suited program, Vernet added.
2. A newsletter can go a long way.
Say you have successfully befriended the mentors of an accelerator, what’s next?
“The other [connection-type] person you have to keep tabs on — the one that’s at your customer,” Roussos said. “It can be someone at a financial institution, where you have met someone internally, but weren’t able to close a deal at that time. That’s a potential customer, and you should keep building that relationship.”
One of the ways startups do that is through a regular newsletter. “Many of our startups send out a monthly newsletter, with updates and new products. It’s a great way to let them know what’s going on with the startup; banks get to know those companies over time, or even review them as a potential partners,” he added.
Many of those “champions” that startups meet throughout the program turn out to be their first investors, according to Vernet: “When they take advice from those mentors, and let them help build the best product that startup can, a lot of the time those mentors will end up investing in that company too.”
3. Keep networking your soul out.
This one may seem obvious, but is very often understated, Vernet said.
“Networking is really the only way you’ll get anywhere in this industry,” she added. “Lets just say they didn’t secure a funding round, or investor interest while at INV Fintech, we are still connecting them to anyone that we know that can help them get closer to their goal.” And the “goal” doesn’t necessarily have to mean getting a seed round. “It’s still important for startups to look for other accelerators, other programs, because, frankly, this is where you meet the best people, who will share your pain and give you advice.”
Roussos agreed, adding that different accelerators are suited for various stages of a company’s development. “We’ve had several of our companies that have gone through other accelerator programs, like Techstars or Y Combinator, he said. “What we try to help them with is the early customer traction, but other accelerators might target things like funding, or POC. Many of those programs complement one another.”
Boston-based DCU Fintech Innovation Center was officially established in Sept. 2016 by the Digital Federal Credit Union, the largest credit union in New England. The center is still accepting inquires for its current startup class.
Launched in 2015, INV Fintech is a global accelerator that seeks startups that target any and all facets of the fintech ecosystem. The accelerator received more than 120 applications for its current class, and has completed the selection of candidates (to be announced soon).4 - Readers Like This Post