It is probably clear that Pre-accelerators differentiate themselves from Accelerators based on the stage of development of companies that they accept in their portfolios. Pre-accelerators are more suitable for startups in their early stages, while Accelerators would be of more help to companies who have established their teams, have built their MVPs and have an established values proposition. But you do not have a complete idea yet? Or you are looking for a group of likeminded individuals to help you find a solution to that nasty problem? Then go for a Pre-accelerator!
Pre-accelerators can provide help to startup founders with the following:
- Proven startup methodologies of how to launch their project cheap and quickly;
- Opportunities to meet teammates who will cover their skill gaps;
- Industry Experts and Entrepreneurs as mentors;
- Guidance on how to create your MVP (minimum viable product) and find your product-market-fit;
- Close collaborations with ecosystem partners who share their know-how, insights or event support with resources;
- Pitching trainings;
- Financial awards for the best performing startups;
- Introduction to investors.
Accelerators support startup founders with the following:
- Initial funding (in Bulgaria it revolves around $30k);
- Contacts of ecosystem partners – potential clients or mentors;
- Mentors with know-how in specific areas;
- Introduction to next round investors.
- Average duration period: 3-12 months;
- Pre-accelerators are equity free or take up to 4%;
- Focused on team formation and product-market-fit;
- Average duration period: 3-9 months;
- Accelerators take equity (between 8-15% for initial investment in Bulgaria);
- Focused on traction and business model validation.
It is essential for first-time startup founders to understand the difference between the two types of organization. Only this way they will be able to take aware decisions on how to move forward with the company development, where to apply and what programs to join. In general, pre-accelerators usually target idea stage startups and potential teams, while accelerators target startups with a developed MVP, who have gained some knowledge, experience, insight, and feedback from the market.
Clue: Startups that have been in pre-accelerators have a higher chance of being better valuated when applying to accelerators. The latter are usually backed by the pre-accelerator and have already achieved some key milestones, such as having a team, a MVP, a product-market-fit, a full pitch deck, etc. All this means their startup might get a better deal in terms of the price for equity exchange the accelerator might offer.