As I have written about previously, incubators are a great way to help you set up and decrease the cost of funding your business, as well as learn the ropes of running a new business. In today’s blog post, I want to touch on what is these days being referred to as the “new incubators”… Accelerators.
Basically, accelerators are business strategists who help start-ups by coaching them for a limited time frame, for which they are compensated with equity or deferred payments plus equity. Their value is in the advice they can provide from years of experience, their wealth of connections and other proven resources.
Depending upon levels of experience and what their track record has been, Accelerators’ fees vary greatly. Generally the going rate will be $100-$300 per hour, taking into consideration the equity offering agreed upon.
The advantage of utilizing an Accelerator is that it can compress the timeline between start-up and profitability. However, this comes with the price of sharing ownership in the company and possibly profits and voting rights.
Super Angels –
Earlier I discussed Angel Investors as a business funding option. Super Angels, in contrast, are groups of serial investors who participate in smaller, early-stage, individual Venture Capital funds of $20-50 million compared to traditional VC funds of $2-14 billion. These Super Angels tend to target technology and internet- based companies who have shorter ROIs.
Some Super Angels features include:
- Creation of a professionally-managed investment fund
- Serial investing (investing in numerous startup companies)
- Investing at a seed round in startup companies
- Funding rounds in the range of $50,000 to several million dollars
- Taking an active role in portfolio companies
- Raising money from general partners and other principals, without passive investors
- Participation of fund principals who are experienced entrepreneurs
Accelerator and Super Angel examples…
Rethink Inc. is a personal, powerful business development firm specializing in CEO Mastery Mentoring, functional and foundational business development, and business funding education and preparation. All of these are elements necessary to create, protect, operate, and fund a profitable business model.
Fees: Rethink Inc. offers early stage entrepreneurs (earning under 250K in annual revenue) a discounted hourly rate of $175 or a monthly retainer. In addition, Rethink Inc. will allow half the rate to be deferred up to 3 years for 1-3% equity.
Super Angel Companies
K9 Ventures 500 Startups
August Capital Partners Felicis Ventures
Floodgate Founders Collective
Founders Co-op Greylock Partners
Harrison Metal IA Ventures
Lerer Media Ventures Lowercase Capital
Social Leverage SofTech VC
SV Angel The Founder Fund
Later this week, I’ll give you some tips regarding Angel and Crowd Funding, as well as several ways for finding the Funders who may be just the right fit for funding your business.