The word “accelerator” has become so ubiquitous in the tech sector over the past year that I was taken aback recently when a friend asked “what’s one of those?”
I explained the basic premise, saying: “It’s somewhere young technology companies go to grow and develop.”
“Like a school for the next Facebook?” they asked, to which I replied, “Kind of.”
Writing in Innovations, a journal published by MIT, Professor Susan Cohen of North Carolina University gives a slightly more detailed definition. She defines an accelerator as a fixed-term, cohort-based programme, that includes mentorship and educational components and culminates in a public pitch event or demo day.
In exchange, start-ups are often required to give up a chunk of their business, typically eight to 12 percent, but not always.
Tech City UK CEO Gerard Grech told Techworld that accelerators are crucial in helping promising UK digital entrepreneurs grow their potential. He says they provide affordable work space, mentorship opportunities, the chance to collaborate and in some cases the early-stage funding that makes a concept reality.
Tech City UK, tasked by government with growing the UK technology sector, was unsure how many "accelerators" there are in the UK but it did say London is home to over 70 co-working spaces and "some" highly successful accelerators.
“The recent openings of Tech Stars, The Bakery and Microsoft Ventures Accelerator have enriched the community, while specialised accelerators like Level39 nurture the next wave of fintech innovation," claims Grech.
50 ACCELERATORS IN LONDON ALONE
Eric van Der Kleij, the British entrepreneur who leads the Level39 fintech accelerator programme for Canary Wharf Group, believes there are now around 50 accelerators in the capital.
To the average onlooker, it would appear as if every man and his dog is setting up an accelerator.
Large corporates like Barclays, the BBC, John Lewis, Tesco and Virgin say they are looking for new start-ups to partner with and learn from. For example, BBC Worldwide is working closely with CrowdEmotion through the BBC Labs accelerator to see how it can take advantage of the start-up's audience monitoring technology.
Then there are pure accelerators like Startupbootcamp and Wayra hoping the small chunks of equity they hold will one day turn into tens or even hundreds of millions of pounds.
All of the aforementioned accelerators are based in London and there are only a handful outside of the capital.
OUTSIDE THE CAPITAL?
Keen to portray that other UK cities are competing with London, Grech says: "As regional tech clusters continue to thrive, successful accelerators are growing up alongside them. From ignite100 in Newcastle and Oxygen Accelerator in Birmingham, to Dotforge in Sheffield and Idea Alive in Manchester, entrepreneurs can increasingly now get access to the benefits of accelerators across the UK.”
Other UK accelerators are looking to piggyback off the success of the companies spinning out of Britain's academic powerhouses. For example, ideaSpace is an accelerator looking to nurture start-ups coming out of the University of Cambridge, while SETsquared is an accelerator aiming to support similar companies emerging from the universities of Bath, Bristol, Exeter, Surrey and Southampton.
Competition for places in all of these accelerators appears to be fierce, with many saying they receive hundreds of applications for each of their programmes even though they typically only accept 10 companies per cohort.
But how good are these accelerator programmes and is it really worth sacrificing a chunk of a business just to be a part of one?