ACCELERATE YOUR SPACE START-UP: WHAT YOU SHOULD KNOW BEFORE APPLYING FOR AN ACCELERATOR
Launching a start-up is just one first step; accelerating growth and expanding is a challenging, full-scale journey.
Today, facing what looks like the precipice of a recession and a difficult path forward for start-ups and large corporations alike, funding opportunities will become harder to reach. Along with venture capital, loans, small business grants, financial partnerships, and other sources of funding for an innovative business, accelerator programmes are among the top choices for boosting one’s start-up. Accelerator programmes have become a core step for many successful start-up journeys and will continue to play a pivotal role for many more. According to a Harvard University study on over 2000 ventures from 43 accelerator programmes, start-up accelerator programmes allow participating companies to grow significantly faster than those that do not pursue an accelerator programmes.
An accelerator generally consists of a 3-to-6-month programme in which start-ups receive mentorship and access to exclusive networks, which they eventually use to secure additional funding from prominent investors at the end of their tenure with the accelerator, usually at a Demo Day presentation. Demo Day is the last culminating day of an accelerator programme where start-up founders pitch their business to a room full of investors in an effort to secure investment. This process has stood the test of time and has lifted countless start-ups off the ground.
In the past, accelerator programmes have taken a more generalist approach by accepting companies from all industries. However, recently, the trend is to have more targeted, industry-based accelerator programmes for a more tailored experience, in turn providing participating start-ups with better outcomes.
Currently, a $469 billion global space economy continues to grow in size, investment and employment. Since 2014, the European space economy has recorded continuous and significant growth, going from €50 million to €500 million, corresponding to a 45% increase in just six years (2014-2020). The EU Member States have recognised space as a profitable sector during recent years, crucial to building a more resilient and sustainable post-pandemic society and economy. They also increased their investment in this sector with a record €502 million invested in European space start-ups in 2020, despite the COVID-19 crisis. Private space investment in Europe has seen a compound annual growth rate of close to 60% since 2014. Moreover, European space start-ups have raised a total of €1.9 billion to date, pushing the European ecosystem to the forefront of the “NewSpace Revolution.” To keep the value chain sustainable and on track to healthy growth, start-ups and SMEs must leverage the global space industry network to participate, innovate, collaborate, and distribute their products and services, and accelerator programs are contributing to reaching these goals.
Simon Schwall, founder of OKO Crop Assurance, a start-up focused on creating low-cost crop insurance for smallholder farms by simplifying and automatizing claim management through use of Earth Observation technologies and weather forecasting, has had plenty of experience with accelerator programmes. He is a PARSEC Accelerator finalist and has been a participant in many other acceleration programmes (Techstars, Google for Start-ups Accelerator, Microsoft for Start-ups and others). PARSEC is a business accelerator supporting the creation of new Earth Observation (EO) based products and services that concluded its activity in December 2021. The accelerator targeted SMEs, start-ups, entrepreneurs, and researchers looking to make an impact on the emerging food, energy, and environment sectors using Earth Observation technology.
“An accelerator program, first and foremost, helps a founder get an external holistic view of their start-up through mentorship,” says Schwall. Founders often get stuck in business-as-usual matters, which means they can risk overlooking obstacles in their long-term strategic plans because they are caught up in the details of the day-to-day. Participating in an accelerator programme allows one to take a step back and look at the bigger picture.
“Depending on the programme, you can access benefits such as an office space, cloud credit and free access to other products and services, but most importantly, access to a large network of mentors, investors, and future business clients,” continues Schwall. Additionally, some accelerator programmes offer funds to develop your start-up or build new projects.
“Before jumping into the wild waters of an accelerator, a space start-up should conduct a self-analysis on the time and human capacity available to apply and join the programme because once accepted, you should plan to follow the mentoring sessions and activities offered,” says Schwall. His piece of advice is not to apply for an accelerator programme that is not relevant to your start-up just for the sake of it. There are an increasing number of acceleration programmes targeting space start-ups, so seek to join a suitable one. Ideally, the programme’s activities or targets should be something you would have done anyway. Entering a programme by cutting corners or shifting from your core business to fit in will not bring the expected value.
“The application process for an acceleration programme is mostly straightforward,” states Schwall. “The exact criteria and admin documents can vary from programme to programme, but it typically consists of a business proposal and pitch,” continues Schwall. “If the accelerator programme targets space start-ups and is relevant to your business, the chances of getting accepted might be high. The local European programmes are more accessible than the highly competitive, world-famous programs such as Y Combinator and Techstars,” concludes Schwall.
Is an accelerator the right choice for your business? Check out these opportunities for space start-ups:
Techstars is a global investment business that provides access to capital, one-on-one mentorship, a worldwide network, and customised programming for early-stage entrepreneurs.
Kickstart connects student-founded start-ups to a broader ecosystem. It offers a vast network of highly experienced professionals, tailored support for various areas from MVP testing to pitching to investors, and perks worth over £15,000 for no equity or fee.
Google for Start-ups Accelerator serves top growth-stage start-ups with tailored technical, product and leadership training from Google experts. The programme consists of three months of equity-free support, design, marketing, leadership training and Google product credits for your tech stack.
Microsoft for Start-ups is a global programme dedicated to helping start-ups scale their companies. The program supports qualifying start-ups to connect founders with the tech they need to thrive along with access to a package of perks, including a minimum of $25,000 of free Azure credits, GitHub Enterprise license, Microsoft 365 licenses and an extensive network of tech experts. The program connects tech start-ups with some of the most giant corporations, all of whom have specific problem statements they are looking to solve.
Fit 4 Start is the leading programme for launching and accelerating start-ups in Luxembourg. Fit 4 Start provides entrepreneurs with intense coaching, attractive pre-seed funding and access to critical networks.
EIC Accelerator supports individual SMEs, particularly start-ups and spinout companies, to develop and scale up game-changing innovations. The EIC Accelerator provides substantial financial support with: grant funding (non-dilutive) of up to €2.5 million for innovation development costs, investments (direct equity investments) of up to €15 million managed by the EIC Fund for scale-up and other relevant costs. Companies working on technologies of strategic European interest can apply for EIC investments of more than €15 million. In addition, EIC selected companies receive coaching, mentoring, access to investors and corporates, and many other opportunities as part of the EIC community.