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FAQ says that they charge $6,000 per founder and $3,000 per non-founder to participate in the accelerator program. Do most accelerators charge you to participa

by clbrook 14y ago

FAQ says that they charge $6,000 per founder and $3,000 per non-founder to participate in the accelerator program. Do most accelerators charge you to participate in them, while at the same time investing ~$50,000 for 5% equity?

rdl 14y ago
Y Combinator doesn't charge you anything, but gives less cash for roughly the same equity. I don't know about Tech Stars. I think Founder Institute charges and doesn't invest, but I don't know their terms, and they're not really an accelerator. It's normal for VCs in Series A to bill you for their legal expenses. Maybe that's a similar kind of thing to giving money and then charging back for expenses. It's obvious that accelerators have per-participant expenses; it's up to them and their LPs whether they should cover it by recouping from portfolio vs. overhead. I don't think this term would influence my decision to participate or not. If an accelerator isn't a clear yes (massively increasingly your odds of success, raising your investment valuation, etc., far beyond what it costs), it's a no. For Y Combinator, I'd say it's a clear yes. For a lot of the other accelerators, it's a no. I've heard good things about 500 Startups from other people I know who have participated.
- clbrook 14y ago
  Thanks for all of the information. Now that I understand why these are the terms it makes more sense.
cloudwalking 14y ago
As the FAQ says, they charge for office space, food, resources, guest speakers, etc. To a certain extent it helps companies understand the value of their cash. Rent and benefits are costs that (almost) all businesses bear. $50,000 is a lot of money and some founders burn through it too quickly. Mentally, it's a lot different than YC's $15,000.
- friendstock 14y ago
  They provide a prime office location (top floor of the tallest building in downtown Mountain View) and regular catered meals (several meals a week) as part of the multi-month accelerator program. When we took part in the accelerator, we were initially surprised by this charge, but found it to be a minimal charge relative to all that 500S provides.
deleted 14y ago
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by clbrook 14y ago

rdl 14y ago

Y Combinator doesn't charge you anything, but gives less cash for roughly the same equity. I don't know about Tech Stars. I think Founder Institute charges and doesn't invest, but I don't know their terms, and they're not really an accelerator. It's normal for VCs in Series A to bill you for their legal expenses. Maybe that's a similar kind of thing to giving money and then charging back for expenses. It's obvious that accelerators have per-participant expenses; it's up to them and their LPs whether they should cover it by recouping from portfolio vs. overhead. I don't think this term would influence my decision to participate or not. If an accelerator isn't a clear yes (massively increasingly your odds of success, raising your investment valuation, etc., far beyond what it costs), it's a no. For Y Combinator, I'd say it's a clear yes. For a lot of the other accelerators, it's a no. I've heard good things about 500 Startups from other people I know who have participated.

clbrook 14y ago
Thanks for all of the information. Now that I understand why these are the terms it makes more sense.

cloudwalking 14y ago

As the FAQ says, they charge for office space, food, resources, guest speakers, etc. To a certain extent it helps companies understand the value of their cash. Rent and benefits are costs that (almost) all businesses bear. $50,000 is a lot of money and some founders burn through it too quickly. Mentally, it's a lot different than YC's $15,000.

friendstock 14y ago
They provide a prime office location (top floor of the tallest building in downtown Mountain View) and regular catered meals (several meals a week) as part of the multi-month accelerator program. When we took part in the accelerator, we were initially surprised by this charge, but found it to be a minimal charge relative to all that 500S provides.

deleted 14y ago

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