Over the past decade, the inner workings of startup accelerators has become a familiar affair. However, despite the boom in startup investments over the past couple of years, much has changed about the way launch pads for startups look for, feel and show value today. The earliest investors are rethinking risk, dilution and the decision-making process behind follow-on investment. Even a major accelerator such as YCombinator has rethought terms of investing into their portfolio companies. Previously, YC invested in every seed and series A round for its portfolio companies, but May 2020 onwards, concerns expressed by limited partners have amended their terms to invest on a case-by-case basis going forward. Given the change to risk appetites of investors and how failing to be chosen for follow on investment signals risk to the market, founders looking to go down the accelerator path must be even more prepared to stand out from the crowd – both before and after being selected as a viable candidate by accelerator programmes. Often, a knowledge of what accelerator programmes are looking for in their candidates for investments and follow-on investment can be the make-or-break factor which helps founders secure that much needed funding round to boost valuations and reputation in the competitive startup ecosystem.
