Is National Public Support for Accelerators on the Rise?

The rapid proliferation of accelerators world-wide has raised questions about whether this model is viable and sustainable. Though many accelerators have been founded and funded by private investors, accelerators are now getting a public boost on both sides of the Atlantic. The European Commission and the U.S. Small Business Administration are both becoming involved in the accelerator phenomenon, perhaps representing an expanded role for national (and quasi-national) public support for accelerators.

The European Commission recently announced the launch of Startup Europe's Accelerator Assembly. The Accelerator Assembly is an offshoot of the Startup Europe initiative, which works to encourage Internet entrepreneurs to start and grow business in Europe.

The Accelerator Assembly will be organized and led by seven accelerators, including TechStars, and consists of a network of 20 accelerator programs across the European Union in 10 countries. The United Kingdom is the most represented, with seven accelerators participating in the program. Eastern Europe is also well-represented, however, with participants in Lithuania, Bulgaria, the Czech Republic and two in Estonia.

This network will operate as a forum to exchange best practices and collaborate across the accelerator programs. Research on startup and accelerator growth will also take place. In addition, the European Commission will provide workshops for accelerator use and growth and development.

In the United States, the Small Business Administration, partnering with the Global Accelerator Network, is hosting a national Accelerator Demo Day on July 19 at the 1776 Accelerator in Washington, DC. This demo day will allow accelerators to pitch their methodology to foundations and other investors.

Demo Day, in addition to the SBA's $25 million program over five years to support accelerators, which would leverage $125 million in additional funding, may signal a new top-down involvement in accelerator creation, development and connections.

Finally, the Toronto, Canada-based MaRS Discovery District released Seeding Success, a summary of the largest accelerators in Canada. The report, conducted through a survey and interviews across the accelerators, describes the accelerator programs as:

• Having no more than three cohorts a year, with 3 to 10 startup teams in each cohort;
• Provide Can$20,000-Can$50,000 in exchange for 5 to 10 percent equity;
• Typically funded through scholarships, donations or investments by a stakeholder, which could be a university or government agency; and,
• Partnered with service firms and technology companies who provide discounted services and products to the startup companies.

However, despite these general similarities within this group (and between Canadian and American accelerators), there are structural differences within the accelerator population in methodology, program, and mentoring and advising.