Why Bitcoin Accelerators Need To Remain Vigilant In Their Search For Projects

Regardless of which aspect of finance you are looking at, startup companies are facing so many uphill battles these days, it is becoming incredibly difficult to succeed.  Most of that failure can be attributed to a lack of guidance from so-called “startup accelerators”, or lack thereof.  But even these accelerators themselves are failing to do a low influx of proper investment-grade companies.

Startup Accelerators – A Business Model That Has To Change? 

Most people view startup accelerators as a way for new companies to receive funding and guidance.  And while there is some merit to that statement, no one stops and asks where that money is coming from.  Startup Accelerators are a form of investment, by attracting promising teams and companies, investing in them with time and money, and expecting to see a return.

However, with so many startup companies failing after an initial round of funding, there is no real chance of getting a return of investment for startup accelerators either. Attracting teams which not only show a lot of promise, but who can deliver on that promise, is not as easy as it may sound.

There is nothing wrong with the concept of business incubators – or accelerators as they are called these days – thanks to a strong foundation.  Providing invaluable educational value and a small bit of funding to budding entrepreneurs is a good way to get people excited about their ideas, and more importantly, the realization of those ideas.

It has to be said however, that the idea of business incubators have seen quite an evolution since the change of the millennium.  Rather than developing concepts from the ground up in-house, entrepreneurs and technologists can now enter the accelerator model as an environment of mentorship.  Once successful accelerator projects such as AirBnB and Dropbox started surfacing, it didn’t take long for similar facilities to pop up all over the world.

Unfortunately, this is also the root cause of the problem many accelerators are faced with to date.  Top-tier incubators will receive more applications than major universities, whereas the “rest” is deemed to be “Plan B”.  Additionally, most accelerators are made up of teams with little to no experience in the field, which creates a lot of financial problems as soon as government subsidies dry up.

Startups Need To Start Vetting Business Accelerators

Entrepreneurs who are part of a startup company have a lot of responsibilities when it comes to joining an accelerator program.  One of the top priorities on their list should be to vet the incubator itself, making sure arrangements are made properly and your needs will be suited.  Plus, it’s never a bad idea to contact your future mentors beforehand, as well as people who have “graduated” from the accelerator of your choice.

Whenever the opportunity to join an accelerator arises, entrepreneurs tend to forget the practical aspects of accepting this offer. The most important aspect of an accelerator program is the invaluable knowledge bestowed upon you, and not the amount of funding you are set to receive. Always ensure you know the full scope of details surrounding the deal you are signing up for, and compare it to other options that might be at your disposal.

Bitcoin Accelerators To Fall For The Same Trap?

Bitcoin is a booming business, and a lot of entrepreneurs have bright ideas which they want to bring to life.  As a result, Bitcoin accelerators have spawned all over the world, yet they are very selective about which startups can board the program.  But, that isn’t keeping bright entrepreneurs from pitching their new business ideas to the world.

That being said, Bitcoin startup accelerators will need to remain vigilant and not fall for the same trap plaguing regular business incubators. Even though most of the Bitcoin accelerators comprise of a well-trained and educated staff, not just everyone can run their own accelerator program.  So far, there are only a handful of them out there, but once Bitcoin gains mainstream traction, that number could increase exponentially.

Source: TechCrunch

Images courtesy of Shutterstock