2. 2 | Ahmed Mahmoud Saad
1. Contents
Accelerator concept......................................................................................................................................4
1. Introduction ..........................................................................................................................................4
2. Accelerator concept structure ..............................................................................................................4
Accelerator concept structure......................................................................................................................5
1. Key Partners..........................................................................................................................................5
1.1. Startups.........................................................................................................................................5
1.2. Investors........................................................................................................................................5
1.3. Mentors.........................................................................................................................................5
1.4. Accelerator....................................................................................................................................5
2. Key Activities.........................................................................................................................................6
2.1. Awareness.....................................................................................................................................6
2.2. Application....................................................................................................................................6
2.3. Program.........................................................................................................................................6
2.4. Demo Day......................................................................................................................................6
2.5. Post Demo Day..............................................................................................................................6
3. Key Resources .......................................................................................................................................7
3.1. Human resources..........................................................................................................................7
3.2. Physical Resources........................................................................................................................7
3.3. Budget plan...................................................................................................................................7
4. Value Proposition..................................................................................................................................8
4.1. For Startups...................................................................................................................................8
4.2. For investors..................................................................................................................................8
4.3. For Accelerator..............................................................................................................................8
4.4. For Mentors ..................................................................................................................................8
4.5. For Society.....................................................................................................................................8
5. Customer Relationships ........................................................................................................................9
5.1. Before Program Starts...................................................................................................................9
5.2. During The Program......................................................................................................................9
6. Customer Segments..............................................................................................................................9
6.1. Business angels .............................................................................................................................9
6.2. VCs (venture capital).....................................................................................................................9
3. 3 | Ahmed Mahmoud Saad
6.3. Research universities ....................................................................................................................9
6.4. Governmental organizations ........................................................................................................9
6.5. Corporate with invest programs...................................................................................................9
6.6. Companies with Small teams........................................................................................................9
6.7. Teams with an Idea.......................................................................................................................9
7. Channels..............................................................................................................................................10
7.1. Events and Business Communities..............................................................................................10
7.2. Business Specific Publications.....................................................................................................10
7.3. Social Media................................................................................................................................10
7.4. Web Ads......................................................................................................................................10
8. Revenue Streams................................................................................................................................10
8.1. Accelerator revenue....................................................................................................................10
4. 4 Accelerator concept | Ahmed Mahmoud Saad
Accelerator concept
1. Introduction
In 2005 the seed accelerator was born in Silicon Valley, the home of many serial
entrepreneurs in the software industry. Seed accelerators allow for startups, investors and
entrepreneurs to connect with each other and have become a way of shaping startups into
scalable and viable businesses.
2. Accelerator concept structure
There will be 8 elements that well explain the accelerator concept, each element has
number of subject and will be explained one by one
Figure 1, The Accelerator concept structure
Key
Partners
Customer
Relationship
s
Revenue
Streams
Channels
Key
Activities
Key
Resources
Value
Proposition
Customer
Segments
5. 5 Accelerator concept structure | Ahmed Mahmoud Saad
Accelerator concept structure
1. Key Partners
1.1. Startups
The program is meant to aid the startups in developing their business concept and connect
them to investors in order to secure additional funding once the program is over.
1.2. Investors
As previously stated, the main incentive for startups to take part in an accelerator program is
the connection to a network of investors and mentors. In order to provide startups with this
service, the accelerator must entice investors to be an active part of the network. Obviously,
accelerators need to attract investors to their network in order to provide the desired value to
the startups. Conversely, investors have an interest in presumptive future investment objects. In
this way the investors become a natural part of the network and thus a stakeholder to the
accelerator.
1.3. Mentors.
The third actor in the accelerating concept is the mentor. As a natural part of the education that
enhances the human capital within the startups and because of their entrepreneurial expertise,
they are the primary value-adders of the accelerator program.
1.4. Accelerator
Accelerator helps startups define and build their initial products, identify promising customer
segments, and secure resources, including capital, shelter and mentors.
6. 6 Key Activities | Ahmed Mahmoud Saad
2. Key Activities
2.1. Awareness
The awareness phase refers to the time when a startup teams becomes aware of the
existence of an accelerator. Maybe the most efficient way to become better known is
to recruit acknowledged and experienced mentors that can attract more
entrepreneurs.
2.2. Application
The application process usually consists of filling out an online application as the
first step. If an application is deemed interesting by the accelerator the applicants
will be called upon for an interview. Many of the programs have a very high
application rate, the most well known accept less than 1% of the applicants. It is
therefore important that the selection is made by a qualified and experienced jury
that can assess the applicants and their potential Program
2.3. Program
-During this phase, the startups focus on developing their products, continuously
supported by mentors.
-Many accelerators, such as TechStars, Springboard and Startup Sauna require their
teams to live in the city where the program is held. This enables more active
participation and increases the teams’ opportunities to interact with each other.
-Moreover, some accelerators think that the startups should work at the designated
office spaces, in order to benefit as much as possible from peer support.
2.4. Demo Day
-The program usually ends with a Demo Day, which gives the startups an
opportunity to meet with investors.
-Each team gets a set time frame of up to ten minutes to pitch their product.
-This day is very important for the startup and maybe equally valuable to the
investors. It is a great opportunity to listen to many product pitches and the startups
that are pitching are in a way approved as worthy of investment.
2.5. Post Demo Day
The startup has now finished the program and has to manage on its own. The
amount of engagement of the accelerator in a certain startup after the program is
over depends mostly on how much equity is retained.
7. 7 | Ahmed Mahmoud Saad
The Accelerator Cycle
3. Key Resources
There will be some questions will have to be answered in order to make the business
model work effectively:-
What Key Resources do our Value Propositions require? Our distribution channels?
Customer relationships? Revenue streams?
3.1. Human resources
Marketing team
-Responsible for marketing the program
Business development team
-Acquiring new key partner needs a business team to contact, meet, closing deals and
develop the current key partner network.
Operational team
-To Manage and coordinate the communication between key partner.
3.2. Physical Resources
Such as a building with offices to host start up teams and a place to held events, and it may
be owned by the company or provided by sponsors.
3.3. Budget plan
Awareness Application Post Demo
Day
Demo DayProgram
Social Media
Events &
Communities
Web Based
Focus on Teams
Focus on
Mentoring
Build the
Project
Pitch the
Product
Connect with
investors
Startups on its
Own
Take Part in
Alumni Network
8. 8 Value Proposition | Ahmed Mahmoud Saad
4. Value Proposition
A Value Proposition creates value for a Customer Segment through a distinct mix of
elements catering to that segment’s needs.
4.1. For Startups
There are two advantages of joining an accelerator that are important. First, the fact that
the program can offer connections to future capital is of significant importance.
Second, the access to the mentor network makes it possible for the team members in the
startup to increase their human capital.
4.2. For investors
The product and business model of the startup becomes more refined. After completing the
program the startups are presented as more attractive investment objects than they would
have been without participating in the program.
- The conclusion is that maybe the single most important part of the accelerator’s
operations is to provide attractive investment opportunities to investors.
4.3. For Accelerator
In return of services provided to startups, accelerators offer, they take equity in the
company.
4.4. For Mentors
-Mentors often participate in the program without compensation, sometimes for a symbolic
compensation.
-The main incentive for mentors to participate is not monetary incentive but rather
altruistic approach.
4.5. For Society
In a larger context, societies and governments benefit from a flourishing and viable
innovation system, where companies can grow and jobs be created. It is also desirable to
foster a positive environment for entrepreneurs and innovators supporting new ideas,
which can contribute to technology development and the rise of future startups.
9. 9 Customer Relationships | Ahmed Mahmoud Saad
5. Customer Relationships
-The Customer Relationships subject describes the types of relationships a company establishes with
specific customer Segments
- A Company should clarify the type of relationship it wants to establish with each Customer Segment.
Relationships can range from personal to automate.
5.1. Before Program Starts
Customer acquisition work need to be done by Business Developing team.
5.2. During The Program
Operation team will be the responsible for managing the day to day communications.
6. Customer Segments
The Customer Segments subject defines the different groups of people or organizations an
enterprise aims to reach and serve
6.1. Business angels
Individuals who provides capital for a business start-up, usually in exchange of convertible
debt or ownership equity.
6.2. VCs (venture capital)
Wealthy investors, investment banks and other financial institutions that pool such
investments or partnerships.
6.3. Research universities
6.4. Governmental organizations
6.5. Corporate with invest programs
6.6. Companies with Small teams
6.7. Teams with an Idea
10. 10 Channels | Ahmed Mahmoud Saad
7. Channels
The Channels subject describes how a company communicates with and reaches its
Customer Segments to deliver a Value Proposition Communication; sales Channels
comprise a company's interface with customers.
Channels are customer touch points that play an important role in the customer
experience.
Channels consist of several functions, including:
7.1. Events and Business Communities
7.2. Business Specific Publications
7.3. Social Media
7.4. Web Ads
8. Revenue Streams
8.1. Accelerator revenue
If the startup success in draw an investor attention after demo day, there will be an
agreement to give the accelerator between 2% and 10% as equity from the company,
depends on services provided by the accelerator.
11. 11 Revenue Streams | Ahmed Mahmoud Saad
References:-
-Accelerating Success: A Study of Seed Accelerators and Their Defining Characteristics.
Bachelor Thesis in Industrial Engineering and Management
CHALMERS UNIVERSITY OF TECHNOLOGY
Gothenburg, Sweden 2012
Bachelor Thesis TEKX04-12-10
-Case studies from Y compainator, EUROPEAN ACCELERATORS, The German Silicon Valley Accelerator.
-Business Model Generation, a Handbook for Visionaries, Game Changers, and Challengers, Written by
Alexander Osterwalder and Yves Pigneur(2011)
