17 January 2023
What is the relationship between Capital Pilot and the accelerator market?
Firstly, let me provide you with some context regarding accelerators in the UK.
Currently, there are approximately 200 accelerators, some small, and some large. Some are niche and category-specific, and some have a broader reach. The accelerator business is a relatively competitive space.
Whatever the accelerator profile, there is a need for differentiation in the market. That may come through sector specialisation - perhaps focusing on female and minority founders or supporting entrepreneurs from underrepresented backgrounds.
These specialist areas must demonstrate a high quality of service that will deliver relevance and impact.
Since Capital Pilot's inception, we have worked on the basis that accelerators provide a 'service home' to many startups - and that is interesting to us because we can help provide an optimal service for these startup cohorts.
The service we currently provide to accelerators splits into two:
We sell our rating and assessment service directly to the accelerator… ...they then pass on the service to their cohort members, so every business gets rated - this is important because it delivers consistency of approach. Identifying individual areas of strength and weakness in businesses AND within the cohort will be interesting to founders and accelerators. This data will enable accelerators to fix their weaknesses (if they have any!) at both a program and company level.
Adopt a channel approach… ...where accelerators recommend their startup cohort members to use our assessment and rating service - we would typically provide a discount to encourage participation. We would also provide extra support through webinars and workshops, amplifying what we offer as a service and helping enhance individual business outcomes.
What is the purpose of Capital Pilot's relationship with accelerators?
We need to reference my earlier point regarding 'differentiation' to help explain the purpose of a Capital Pilot and accelerator partnership.
All accelerators have a target or a benchmark - a KPI - based on what percentage of their cohort companies successfully fundraise. So, any service that can help them promote better access to funding is a huge benefit. Remember, Capital Pilot doesn't only help businesses prepare for funding; we can also provide them with a significant portion of their planned fundraise via the Boost Fund.
What service do you offer accelerators?
There are four different elements of the service:
Filtering We can provide a filtering service - a light touch version of our own rating. This service objectively assesses businesses applying to be part of an accelerator program. These are likely to be companies that have never fundraised before or companies that don't necessarily have a complete package of investor-ready materials: a pitch deck, financial model, etc. As a result, there is a small amount of quality data to assess. The filtering product works well for businesses at this point in their development as it can identify those likely to be successful - even at this early stage. We know our system is bias-free, so we can ensure the selection process is objective and create diversity within a cohort.
Full rating + Assessment Report The full rating and assessment report is designed to support the middle or end of an accelerator's program. It is a diagnostic of how a particular startup is performing - identifying the areas it needs to focus on to be in optimal shape for fundraising. The assessment report also provides investor matching - introducing relevant investors to relevant startups.
Access to Boost Fund If the startup scores a high enough rating, the business will immediately or subsequently (everybody's free to come back and be re-rated!) have access to the Boost Fund.
Education and information product We support the cohort through Capital Pilot-created and managed webinars, workshops and one-to-one business support.
And the future?
There is a trend that we are helping to define and drive.
Data-driven proof points for startups.
Rather than relying on an investor's subjective judgment, we provide data-driven insights that help identify business strengths and weaknesses via the rating. This ultimately flags investability - delivering the likelihood of fundraising success.
Within an accelerator program, there are many individuals and businesses that provide input and support. There is a genuine concern within the industry that some input from mentors, advisers and content providers may be of a low standard and not relevant to that individual business - it can be too generic.
Also, the correlation between the service support provided and the actual fundraising outcome is difficult to gauge.
In the same way, we see data-driven investment trending; we see the accelerator market following a similar path. Accelerators need to capture more and more data about their cohort members to enable them to improve their programs continuously and their services and ultimately deliver their business KPIs.
Are you fundraising soon?
Capital Pilot’s Investability Assessment and Rating should be the first port of call for founders preparing to raise funds. We provide objective feedback on your investor proposition, with clear suggestions on how to improve. In addition, we provide rated startups with lists of matching investors to help focus your campaign.
The Capital Pilot website has a wealth of resources on different aspects of fundraising, which can be found HERE. Everything you need to know about preparing to meet investors all in one place.