A friend asks: “what percentage of U.S. startups that raise a Series A do not go through an incubator or accelerator?” That’s a great question that I haven’t thought about before. So, I dug into the data to find out.
The Rise of Global Startup Investors
Recently, Brad Feld and I have been working hard on The Startup Community Way, a book on how to harness the complexity in the entrepreneurial age. It’s a follow-up to Brad’s, 2012 classic: Startup Communities. We completed a chapter that documents the growth of startup activity globally over the last decade—from startup deals to investors to startup programs—but recently decided to scrap it from the book. But, we wanted to put those data points to use, so I’ll publish some of them here.
(Note: if you want a comprehensive look at trends of venture deals, see Rise of the Global Startup City: The New Map of Entrepreneurship and Venture Capital, a report I published last September with my friend and colleague Richard Florida. It covers a decade of venture capital deals across more than 300 global metropolitan areas that span 60 countries.)
Here, I’ll document the rise of three types of investor groups: venture capital firms (from Seed through later-stage VC), corporate venture capital groups, and a third group for accelerators and incubators. These groups have been pre-populated by PitchBook, my source in this analysis.
What Startup Accelerators Really Do
Accelerators are playing an increasing role in startup communities throughout the United States and beyond. Early evidence demonstrates the significant potential of accelerators to improve startups’ outcomes, and for these benefits to spill over into the broader startup community. However, the measurable impact accelerators have on performance varies widely among programs — not all accelerators are created equally. Quality matters.
Accelerating Growth: Startup Accelerator Programs in the United States
Startup accelerators support early-stage, innovation-driven companies through education, mentorship, and financing, in a fixed-period, cohort-based setting. This process of intense, rapid, and immersive education aims to accelerate the lifecycle of high-potential companies and the experiential learning of their founders. Accelerators are playing an increasing role in startup communities throughout the United States, but are commonly misunderstood or mistakenly lumped-in with other early-stage supporting institutions. Early evidence demonstrates the significant potential of accelerators to improve startups’ outcomes, and for these benefits to spill over into the broader startup community and local economy. However, the measurable impact accelerators have on performance varies widely among programs. To that end, an accelerator pioneer offers some best practices.