1/13/2015

Ahmed Mahmoud Saad

ACCELERATOR CONCEPT

2 | Ahmed Mahmoud Saad

1. Contents Accelerator concept ...................................................................................................................................... 4

1. Introduction .......................................................................................................................................... 4

2. Accelerator concept structure .............................................................................................................. 4

Accelerator concept structure ...................................................................................................................... 5

1. Key Partners .......................................................................................................................................... 5

1.1. Startups ......................................................................................................................................... 5

1.2. Investors ........................................................................................................................................ 5

1.3. Mentors. ........................................................................................................................................ 5

1.4. Accelerator .................................................................................................................................... 5

2. Key Activities ......................................................................................................................................... 6

2.1. Awareness ..................................................................................................................................... 6

2.2. Application .................................................................................................................................... 6

2.3. Program ......................................................................................................................................... 6

2.4. Demo Day ...................................................................................................................................... 6

2.5. Post Demo Day .............................................................................................................................. 6

3. Key Resources ....................................................................................................................................... 7

3.1. Human resources .......................................................................................................................... 7

3.2. Physical Resources ........................................................................................................................ 7

3.3. Budget plan ................................................................................................................................... 7

4. Value Proposition .................................................................................................................................. 8

4.1. For Startups ................................................................................................................................... 8

4.2. For investors.................................................................................................................................. 8

4.3. For Accelerator .............................................................................................................................. 8

4.4. For Mentors .................................................................................................................................. 8

4.5. For Society ..................................................................................................................................... 8

5. Customer Relationships ........................................................................................................................ 9

5.1. Before Program Starts ................................................................................................................... 9

5.2. During The Program ...................................................................................................................... 9

6. Customer Segments .............................................................................................................................. 9

6.1. Business angels ............................................................................................................................. 9

6.2. VCs (venture capital) ..................................................................................................................... 9

3 | Ahmed Mahmoud Saad

6.3. Research universities .................................................................................................................... 9

6.4. Governmental organizations ........................................................................................................ 9

6.5. Corporate with invest programs ................................................................................................... 9

6.6. Companies with Small teams ........................................................................................................ 9

6.7. Teams with an Idea ....................................................................................................................... 9

7. Channels .............................................................................................................................................. 10

7.1. Events and Business Communities.............................................................................................. 10

7.2. Business Specific Publications..................................................................................................... 10

7.3. Social Media ................................................................................................................................ 10

7.4. Web Ads ...................................................................................................................................... 10

8. Revenue Streams ................................................................................................................................ 10

8.1. Accelerator revenue .................................................................................................................... 10

4 Accelerator concept | Ahmed Mahmoud Saad

Accelerator concept

1. Introduction

In 2005 the seed accelerator was born in Silicon Valley, the home of many serial

entrepreneurs in the software industry. Seed accelerators allow for startups, investors and

entrepreneurs to connect with each other and have become a way of shaping startups into

scalable and viable businesses.

2. Accelerator concept structure There will be 8 elements that well explain the accelerator concept, each element has

number of subject and will be explained one by one

Figure 1, The Accelerator concept structure

Key

Partners

Customer

Relationship

s

Revenue

Streams

Channels

Key

Activities

Key

Resources

Value

Proposition

Customer

Segments

5 Accelerator concept structure | Ahmed Mahmoud Saad

Accelerator concept structure

1. Key Partners

1.1. Startups

The program is meant to aid the startups in developing their business concept and connect

them to investors in order to secure additional funding once the program is over.

1.2. Investors

As previously stated, the main incentive for startups to take part in an accelerator program is

the connection to a network of investors and mentors. In order to provide startups with this

service, the accelerator must entice investors to be an active part of the network. Obviously,

accelerators need to attract investors to their network in order to provide the desired value to

the startups. Conversely, investors have an interest in presumptive future investment objects. In

this way the investors become a natural part of the network and thus a stakeholder to the

accelerator.

1.3. Mentors.

The third actor in the accelerating concept is the mentor. As a natural part of the education that

enhances the human capital within the startups and because of their entrepreneurial expertise,

they are the primary value-adders of the accelerator program.

1.4. Accelerator

Accelerator helps startups define and build their initial products, identify promising customer

segments, and secure resources, including capital, shelter and mentors.

6 Key Activities | Ahmed Mahmoud Saad

2. Key Activities

2.1. Awareness

The awareness phase refers to the time when a startup teams becomes aware of the

existence of an accelerator. Maybe the most efficient way to become better known is

to recruit acknowledged and experienced mentors that can attract more

entrepreneurs.

2.2. Application

The application process usually consists of filling out an online application as the

first step. If an application is deemed interesting by the accelerator the applicants

will be called upon for an interview. Many of the programs have a very high

application rate, the most well known accept less than 1% of the applicants. It is

therefore important that the selection is made by a qualified and experienced jury

that can assess the applicants and their potential Program

2.3. Program

-During this phase, the startups focus on developing their products, continuously

supported by mentors.

-Many accelerators, such as TechStars, Springboard and Startup Sauna require their

teams to live in the city where the program is held. This enables more active

participation and increases the teams’ opportunities to interact with each other.

-Moreover, some accelerators think that the startups should work at the designated

office spaces, in order to benefit as much as possible from peer support.

2.4. Demo Day

-The program usually ends with a Demo Day, which gives the startups an

opportunity to meet with investors.

-Each team gets a set time frame of up to ten minutes to pitch their product.

-This day is very important for the startup and maybe equally valuable to the

investors. It is a great opportunity to listen to many product pitches and the startups

that are pitching are in a way approved as worthy of investment.

2.5. Post Demo Day

The startup has now finished the program and has to manage on its own. The

amount of engagement of the accelerator in a certain startup after the program is

over depends mostly on how much equity is retained.

7 | Ahmed Mahmoud Saad

The Accelerator Cycle

3. Key Resources There will be some questions will have to be answered in order to make the business

model work effectively:-

What Key Resources do our Value Propositions require? Our distribution channels?

Customer relationships? Revenue streams?

3.1. Human resources

Marketing team

-Responsible for marketing the program

Business development team

-Acquiring new key partner needs a business team to contact, meet, closing deals and

develop the current key partner network.

Operational team

-To Manage and coordinate the communication between key partner.

3.2. Physical Resources

Such as a building with offices to host start up teams and a place to held events, and it may

be owned by the company or provided by sponsors.

3.3. Budget plan

Awareness Application

Post Demo Day

Demo Day

Program

Social Media

Events &

Communities

Web Based

Focus on Teams

Focus on

Mentoring

Build the

Project

Pitch the

Product

Connect with

investors

Startups on its

Own

Take Part in

Alumni Network

8 Value Proposition | Ahmed Mahmoud Saad

4. Value Proposition A Value Proposition creates value for a Customer Segment through a distinct mix of

elements catering to that segment’s needs.

4.1. For Startups

There are two advantages of joining an accelerator that are important. First, the fact that

the program can offer connections to future capital is of significant importance.

Second, the access to the mentor network makes it possible for the team members in the

startup to increase their human capital.

4.2. For investors

The product and business model of the startup becomes more refined. After completing the

program the startups are presented as more attractive investment objects than they would

have been without participating in the program.

- The conclusion is that maybe the single most important part of the accelerator’s

operations is to provide attractive investment opportunities to investors.

4.3. For Accelerator

In return of services provided to startups, accelerators offer, they take equity in the

company.

4.4. For Mentors

-Mentors often participate in the program without compensation, sometimes for a symbolic

compensation.

-The main incentive for mentors to participate is not monetary incentive but rather

altruistic approach.

4.5. For Society

In a larger context, societies and governments benefit from a flourishing and viable

innovation system, where companies can grow and jobs be created. It is also desirable to

foster a positive environment for entrepreneurs and innovators supporting new ideas,

which can contribute to technology development and the rise of future startups.

9 Customer Relationships | Ahmed Mahmoud Saad

5. Customer Relationships -The Customer Relationships subject describes the types of relationships a company establishes with

specific customer Segments

- A Company should clarify the type of relationship it wants to establish with each Customer Segment.

Relationships can range from personal to automate.

5.1. Before Program Starts

Customer acquisition work need to be done by Business Developing team.

5.2. During The Program

Operation team will be the responsible for managing the day to day communications.

6. Customer Segments The Customer Segments subject defines the different groups of people or organizations an

enterprise aims to reach and serve

6.1. Business angels

Individuals who provides capital for a business start-up, usually in exchange of convertible

debt or ownership equity.

6.2. VCs (venture capital)

Wealthy investors, investment banks and other financial institutions that pool such

investments or partnerships.

6.3. Research universities

6.4. Governmental organizations

6.5. Corporate with invest programs

6.6. Companies with Small teams

6.7. Teams with an Idea

10 Channels | Ahmed Mahmoud Saad

7. Channels The Channels subject describes how a company communicates with and reaches its

Customer Segments to deliver a Value Proposition Communication; sales Channels

comprise a company's interface with customers.

Channels are customer touch points that play an important role in the customer

experience.

Channels consist of several functions, including:

7.1. Events and Business Communities

7.2. Business Specific Publications

7.3. Social Media

7.4. Web Ads

8. Revenue Streams

8.1. Accelerator revenue

If the startup success in draw an investor attention after demo day, there will be an

agreement to give the accelerator between 2% and 10% as equity from the company,

depends on services provided by the accelerator.

11 Revenue Streams | Ahmed Mahmoud Saad

References:-

-Accelerating Success: A Study of Seed Accelerators and Their Defining Characteristics. Bachelor Thesis in Industrial Engineering and Management

CHALMERS UNIVERSITY OF TECHNOLOGY

Gothenburg, Sweden 2012

Bachelor Thesis TEKX04-12-10

-Case studies from Y compainator, EUROPEAN ACCELERATORS, The German Silicon Valley Accelerator. -Business Model Generation, a Handbook for Visionaries, Game Changers, and Challengers, Written by Alexander Osterwalder and Yves Pigneur(2011)