Are Accelerators Going to Become Campus Players

While looking for the GWU entrepreneurship club today I came across a posting by LaunchboxDigital.com, a new DC based new venture accelerator. It turns out they are actually hosting an event with the GWU entrepreneurship club tonite. I can’t make it, but as I read the blog post, I began to wonder if applying to be in an accelerator is a better strategy than entering business plan contests. It looks like LaunchboxDigital is interested in getting access to students and the campus eco-system.

According to a recent report on accelerators from the Kauffman Foundation; this new model of funding and building firms is becoming more common.  Here is a piece from the report.

This so-called new “accelerator” model differs from previous early stage investors, such as incubators, which are oftentimes limited to real estate deals, with start-ups as tenants who pay for shared overhead. In contrast, the accelerator typically helps form companies as legal entities, interviews and hires the appropriate initial management team, and lends its own management expertise. In short, the accelerator becomes the “new company” throughout seed-stage development.

Like American Idol contestants who audition their skills before a panel of judges, new business start-ups compete for slots on the accelerator’s “team.”

Accelerators believe that by assembling groups of potential entrepreneurial superstars, they will hatch better ideas than if they fund a series of them in isolation,” said Christine Gulbranson, director of Advancing Innovations for the Kauffman Foundation. “Accelerators also appear to be concentrating on specific industries or sectors, such as technology and biotech, since it often takes a critical mass of people with similar educational and business backgrounds to come up with cutting-edge commercially successful advances.”

Though venture capitalists and even some angel investor groups have backed away from seed-stage financing, others are now showing interest in the accelerator model of picking and grooming the next wave of potentially high-growth start-ups.

One thought on “Are Accelerators Going to Become Campus Players

  1. papermasters

    We have seen this to be true of accelerators and many entrepreneurs don’t want to leave their chance at capital to a “American Idol” type shot. Our business plan writing is up 35% just over the past 3 months and I think it is because of the need for specialization in presentation.

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