Business accelerators shooting up across Europe
But success rate for applicants can be as low as 1%
The number of business accelerators across Europe has increased rapidly – but less than 10% of those who apply to them are successful.
These are the principal conclusions of a new study from the National Endowment of Science, Technology and the Arts (NESTA), aiming to map out the global network of business accelerators – which provide funding, mentoring and Dragons’ Den-style pitching exposure for promising new businesses.
The NESTA team, led by seasoned internet entrepreneur Paul Miller, found that, just four years after the establishment of Europe’s first business accelerator, there are now more than 10 such bodies serving the continent’s start-ups.
Furthermore, the report claims that more than 150 fledgling companies have received financial and strategic support from Europe’s accelerator programmes.
Yet the authors also note that “demand for accelerator programmes outstrips supply considerably”. Indeed Seedcamp, the original European accelerator, receives more than 2,000 a year.
Seedcamp takes on just 1% of its applicants, and the competition is just as fierce elsewhere; at present no accelerator in Britain or Ireland takes on more than 9% of its applicants.
The report also highlights the fact that the accelerator judges generally overlook applications from one-man companies, and they often favour companies which are simply after a quick, lucrative exit over businesses which have genuine global ambitions.
The report highlights a number of prevailing trends within the accelerator space – including increasing volumes of private investment, and the changing role of accelerators, “from helping companies survive their formative years (decreasing downside risk) to adding value to companies (increasing upside advantage)”.
However, the authors steer clear of making a definitive forecast about the next generation of accelerators, concluding:
“We make no prediction about the future success of individual programmes because we believe that the business model for running an accelerator programme is yet to be proven.
“There is certainly no one correct way of running a programme, and there will continue to be a great deal of innovation in this area over the coming decade.”