We Keep Trying To Reinvent Startup Accelerators

We Keep Trying To Reinvent Startup Accelerators

In the IT sector, debating the worth of a startup accelerator and demo days has been going on for decades. The workshops offer to assist napkin-stage entrepreneurs with everything from finding co-founders to achieving product-market fit and raising that crucial first check. Startup accelerators, led by global programs like Y Combinator, Techstars, and 500 Global, have spawned billion-dollar firms like Coinbase and Stripe and have become synonymous with the promise of activation energy.

Entrepreneurs, on the other hand, ask the same questions every few months: Is valuable stock worth gaining access to a network? Is the program’s genuine worth merely a prestigious seal of approval? Are demo days no longer relevant? Is a fresh round of funding the greatest outcome for founders in an accelerator? Is YC’s batch size simply too large to make a difference in? We’re always trying to reinvent startup accelerators, which tells me that the institution is still important, even if it’s not ideal. After all, asking questions is the first step in changing the way things are done.

I wrote an article in January on how startup accelerators are overdue for a change in how they approach value-added services. Days later, Y Combinator announced that the check amount will be increased to $500,000, up from $125,000 before. With the Y Combinator Winter 2022 Demo Day coming up next week, we’ll witness the first cohort affected by these changes — and that YC has become more distant, multinational, and ambitious in its impact goals.

As you can see, we’re revamping the way we cover Demo Day this year to better represent what we believe is the most significant aspect of accelerators: a method to understand how a large cohort of entrepreneurs is thinking about the largest challenges in a certain subsector. Demo days, it appears, have moved away from the typical presentation and pitch to investors in favor of providing a glimpse of a startup’s development and personality in its early days.

More on that next week, but for now, we’ll chat about the outlier world of fintech, an Instacart discount, and a bitcoin nonprofit overlap in this newsletter. You may help me out by sharing this message to a friend, following me on Twitter, or subscribing to my personal blog, as usual.

Deal of the Week Ramp announced that it has raised another round of funding, this time at a valuation of $8.1 billion. Given that the firm achieved unicorn status less than a year ago, the impending decacorn valuation comes as no surprise. Jeez. Here’s why it’s crucial: Ramp, and fintech in general, appears to be an exception amid the market turmoil we’ve been covering for the past quarter. Is the financial services industry safe from a larger venture pullback or price correction? Alex and Mary Ann arrived on a critical point this week on Equity: it’s a fintech world, and we’re simply living in it.