Are Accelerators Just Paid Introductions in Disguise?
It was not so much a debate as a “frank exchange”.
I was exchanging emails with the founder of one of the larger startup pitch conferences. He had asked me if I would promote his event with some of the DreamIt startups who are currently fundraising. His events are pay-to-pitch and it’s fair to say that, as a general rule, I’m not a fan of that model.
I (politely, I hope) explained my reservations. I’ve dealt with the issue in more depth here but the gist is that getting in front of key decision makers is a core competence for successful entrepreneurs. If you can’t get a warm intro to early stage investors who, by and large, are some of the most networked people on earth, how will you get in front of potential customers, distribution partners, etc.? Paying for access to investors often signals a lack of this core competence, and, more generally, an attitude that something so fundamental to their business should be outsourced.
When I was done explaining, he responded with this deceptively simple question:
“How is presenting at our program different then presenting at your demo day? Those companies pay you with equity. Couldn’t you make the point that if they need your services then they are [equally lacking]?”
Respectfully, I disagree. There is a world of difference between participating in an intense 3 month program where you master key skills vs. simply writing a check.
Putting aside the heavy filtering that is a result of the intense competition for admission into the top accelerators – having seen the numbers first hand, I can confirm that it is statistically easier to get into Harvard than it is to get into DreamIt – that in itself virtually guarantees a better pool of demo day startups than pay-to-pitch presenters, anyone who has been through a top accelerator will attest to how much they have learnt. In particular, the alumni who graduate from top accelerators leave the program fully capable of networking to investors, clients, partners, etc. Startups who use bankers or other intermediaries leave with some business cards. It’s the difference between mastering a skill and renting it, between going to med school or just going to the doctor.
But then again, I might be biased. 🙂
What do you think?