Accelerator
A fixed-term program that provides startups with mentorship, funding, and resources in exchange for equity.
Definition
An accelerator is a competitive program (typically 3-4 months) that invests a small amount of capital (often $125K-$500K) in exchange for equity (typically 5-7%) and provides mentorship, workspace, and a demo day to pitch investors. Y Combinator, Techstars, and 500 Global are well-known examples. Accelerators focus on rapidly scaling early-stage companies.
Why it matters
If your company went through a top accelerator, it typically signals strong early validation and investor interest. Accelerator alumni often raise larger rounds at higher valuations, which is good for your equity.
Example
A startup joins Y Combinator, receiving $500K for 7% equity. Over 3 months it refines its product and pitch. On Demo Day it raises a $4M seed round at a $20M post-money valuation.