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If you’re an entrepreneur in this bear market who wants to build a business at venture scale with an accelerator program, go for it – I’m a co-founder of the accelerator program and I have some advice.
Now, there is nothing wrong with creating a lifestyle business. They can make millions of dollars in revenue and be wholly owned by an individual, but lifestyle businesses typically can’t become multi-billion dollar companies and scale quickly (although there are always exceptions).
So, for those looking to start a venture-scale business, there are a couple of steps to creating your successful startup.
Related: I spent 10 weeks in LinkedIn’s Creator Accelerator program. Here are 10 things I learned.
If you want to build a business at venture scale, you need to target an industry that has the potential to support rapid growth and large markets. Really understand the players, the market opportunity and the market space you want to build.
Ask yourself if you have the skill set
And if not, can you bring it through your team?
The right skill sets really build a company. If you’re strong on the technical side, bring in a co-founder who’s strong on the business side to help you build, scale, and share the emotional burden of building a business. I guarantee it will be a spiritual journey (including long nights of the soul).
Create one field cover already prototype
Business plans are outdated. Any investor asking for a business plan does not understand how successful early stage businesses are started and built.
All you need is a presentation, clarity on what you’re doing, and ideally a first prototype to show inventors. Think deeply about your business and be prepared to model both success and failure scenarios.
Get ready for fundraising
Once you finally decide to start building that company, whether it’s in biotech, the future of food, Web3, or something else, you need to make sure that as you’re building, you’re ready to fundraise.
Founders should raise SAFE notes. With SAFEs, founders can focus on building the company and not be distracted by legal negotiations.
Some old-school investors don’t like SAFEs because they like controls that include convertible notes or a price equity round, and they’ll push the founders to do a price round and find a lead investor. However, SAFEs are much better because founders remove the need to find a lead investor (who has enough conviction to give you a big first check) and give you time to build real conviction and a real business because investors see compared to just the concept initially presented.
Related: The pet food industry is rotten. It’s time for entrepreneurs to step up.
Choose an accelerator
But it’s not that simple. Having co-founded IndieBio, one of the top biotech accelerators, and having backed many founders who have gone through Ycombinator, Big Idea Ventures, TechStars and others, I can say that there are a lot of really important things to look for in an accelerator program . .
It’s especially important that the people running these accelerator programs and supporting these companies have experience building and scaling the kinds of companies you want to build.
Most importantly, you need an accelerator that is willing to invest. There are many zero-investment, no-cost, or low-cost accelerator programs that are, frankly, a waste of an entrepreneur’s time. Go with accelerators willing to put their money where their mouth is and invest in you and your idea!
For accelerator programs, it’s much more important that they have the right investor, entrepreneur, and technical networks than if you’re there in person or have to do demo days. Programming is generally not that important and in some cases can be a negative if they take up a lot of time or are taught by people who have never built startups. Entrepreneurs should be able to learn by talking and getting advice from people who have done what they want to do.
Related: The Future of Food: How Biotechnology Will Save Us All
What are the risks?
Technology and entrepreneurship always have cycles of hype and crashes. We’ve seen it time and time again; the Gartner hype cycle. Everyone gets excited about technology with euphoric levels of funding, founders and startups, but then comes the inevitable crash.
These are the risks of technology. Through these cycles of hype and shock, great companies rise from the rubble, perhaps a requirement of technology cycles. The dot com industry is a perfect example of this. From the ruins of the fall of the dot-com industry emerged Amazon.
We also saw this with automobiles, an old product of the animal industry with the horse and cart, which was replaced by a product of the technological industry: cars. At its peak, there were about 300 car companies worldwide. Then there was a massive collapse of the auto companies and everyone lost faith in them. But eventually, General Motors and Ford emerged as the dominant leaders in the space. This hype cycle was necessary to create these giant companies and the market eventually figured it out.
If you decide not to go the accelerator route, you still have options. There are other large early-stage angels and pre-seed investors. Companies destined to succeed are led by mission-driven founders who share my belief in the power of entrepreneurship to uplift humanity and our world.
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