“Startups must understand how to create a business that is sustainable,” believes Nainesh Kapadia, Founder at ScaleMinds a customized accelerator programme.
He adds that sustainability ensures that a business doesn’t burn out too fast and automatically achieves scalability. His opinion is seconded by Akshit Gupta, Founder at FundTonic an angel network.
Gupta explains, “Accelerators must focus on helping startups become self-sustainable and help them understand their customers much better rather than purely focusing on funding.” Part of this sustainability process may include financial planning and deciding whether becoming an LLC is the best fit for your startup. With this in mind, you may wish to read this LLC setup Guide by Association for Strategic Planning.
The duo talk to us about the evolution of startup accelerators, revealing how new businesses can derive the most value from accelerator platforms.
As A Startup Founder, How Do You Choose The Right Accelerator?
Nainesh Kapadia- First off, you need to find the right accelerator who is willing to take the risk with you. For instance, ScaleMinds actually invests in the businesses and hence has a vested interest in the success of the business.
Secondly, check what value proposition you receive. Is there a business development opportunity coming along with the basic knowledge of business that comes in?
Third would be to ask yourself, if they the right accelerators for the sector of business you are in. Are they the right kind of mentors who can guide you all the way? Look for life experiences, money and infrastructure. All three are vital.
Many Accelerator Platforms Offer Limited Aid To Start-Ups As A Business Boost. What Do You Believe Startups Need From Accelerators As Opposed To What They Are Offered Today?
Akshit Gupta- When we started our accelerator platform, we observed that more than 90% of accelerators only provide aid in terms of infrastructure. This includes WiFi, a working space and basic mentoring sessions that are quite standardized. But every startup is very unique and requires a lot of customized attention. For business tax planning, many of the startups are very inexperienced and so a startup lawyer would be recommendable.
Hence, in our accelerator program, we decided to take real risk. If the startup has to fail, it has to really hurt us rather than just losing out on rental income from the co-working space. We decided to invest 10 to 30 lakhs in each startup and our intervention really comes with business strategies.
Some startups we invested in have managed to scale up 10x and 20x in terms of their revenue and users within 2 to 3 months of our intervention.
Nainesh Kapadia- Indeed, more hands on deck with guidance in the real world is crucial. We need to connect startups to mentors who have been there, and done the hard work.
How Do You Propose The Problem Of Overlap Of Accelerators And Incubators Can Be Solved?
Akshit Gupta- With incubators and accelerators, the definition is very subjective. In our view we’ve clearly dissected what they stand for. An incubator should typically deal with startups at an idea stage-when you want to get to the product stage.
An accelerator must come in later, when you at least have a prototype or minimum viable product ready. They then help you with market strategies and really accelerate your business, moving stagnant waters.
When Working With An Accelerator, Startups Are Somewhat Restricted When It Comes To Making Managerial Decisions. How Is A Startup Founder To Deal With This Or Change This?
Akshit Gupta- The prevalent perception is that accelerators step in and take control. However, these are not the accelerators to work with. We as accelerators are very clear that we don’t want to run the show. We are enablers.
But we want smart and open minded entrepreneurs with a very strong mindset to manuouvre changes in the business through tough times. We will just guide them and give them direction. We have neither the bandwidth nor the intention to run businesses.
What Challenges Do You See Start-Ups Facing Apart From Lack Of Funding?
Nainesh Kapadia- Well, typically three. One- with the kind of business model they’re working on, they must ascertain scalability and feasibility. Then there is stepping into a very competitive segment too early. Second, there is a lack of planning and vision itself. Third is the teamwork. The team should be in sync with each other. These are the major challenges.
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