Explaining the Rise of Accelerators/Incubators

For my senior thesis at Claremont McKenna College, I wrote about Angel Groups, who started investing in the space that VCs abandoned as they started investing in larger deals.

Over time, many angels learned the risk of investing in companies that were still pre-seed. The solution, which has recently caught on like wildfire, was the incubator/accelerator model, not only providing funding, but also providing mentorship. By pooling the money from groups of investors to start the accelerator and by bringing on a large group of mentors, they’re successfully hedging the risk of investing in pre-seed startups while also increasing the success rate of those companies.

In short, the recent growth in numbers of incubators/accelerators is only partially due to the growing startup economy, but it also signifies a fundamental shift in the way pre-seed investments are made.

Entrepreneur [Inspiration + Perspiration] + Accelerators/Incubators [Money + Mentorship + Community] = Success?

Leave a Reply

Your email address will not be published. Required fields are marked *