Tristen Langley says start-up accelerators are faster paced and broader reaching than their incubator predecessors.
Photo: Tamara Dean
As the sun sets across the Palo Alto Hills in Silicon Valley, you would think that life is as peaceful as the quaint orchards and rolling farmlands nearby. Looks can be deceiving. The rumbling throughout the valley isn’t the San Andreas fault murmuring, it’s the tremors of acceleration taking place. Start-up acceleration has been part of the technology landscape in Silicon Valley for as long as entrepreneurs have been in residence and ideas have been incubated inside funds and research teams. However, this era of acceleration has taken a different tune. It is faster paced, broader reaching and more successful than its incubator predecessors. Part of that success is founded on the technology available to get a product to market faster and the absolute growth in angels and mentors involved.
Y Combinator, the original start-up accelerator, was conceived in 2005 and became the blueprint seed fund for more than 500 start-up launches. Accelerators offer a blend of valuable advice and seed funding (typically around $20,000 for 6-7 per cent equity) and a critical path to a community of experienced entrepreneurs, angel investors and venture capital funds. Other accelerator programs include Alchemist, Founder Institute, Seedcamp, 500Startups and TechStars.
Closer to home, the movement in Australia has built to an impressive wave. Startmate, PushStart, Pollenizer, AngelCube, BlueChilli and Ignition Labs/ATP and thriving workspaces such as Fishburners and iLab have cultivated a new generation of aspiring start-up founders. Specialised accelerator Right Pedal, founded by Steve Baxter, focuses on gaming, leveraging the community of game developer successes in Queensland.To whet your appetite before taking the plunge, you might opt for Pollenizer’s Brown Bag Design in Sydney on June 26. If you want to take the leap to the US, TechStars Austin is open for application, final deadline June 30.
After graduating from these programs with a working product and initial customer traction, options going forward include garnering angel funding or simply selling more. The pool of venture capital is slim in Australia. Self-funded and angel-funded paths to profitability and the rumbling of cash flow and a dividend or an acquisition offer may well serve accelerated graduates best. A couple of examples of accelerator-direct-to-exit include Wufoo acquired by SurveyMonkey straight from Y Combinator, and Grabble acquired by WalMark straight from StartMate. These are few and far between, however, and while the preponderance of accelerated companies may fail, failing fast serves as the ultimate platform from which to learn, rapidly hone skills, and get the entrepreneurial bug.
It’s the best way to bring ideas to fruition with nimble resources and the ticking of time.
Tristen Langley is a venture partner with Southern Cross Venture Partners and a director with Amalfi Capital. You will find her in Sydney, Shanghai and Silicon Valley.