Several years ago accelerators were so rare in Europe (especially its eastern part), that forward-looking entrepreneurs (now commonly known as perspective startuppers) were ready to move their early-stage businesses to another country in order to try luck in being selected by accelerators and getting professional guidance within project development. Today Europe is claimed to be the world leader in the number of accelerators.
If you confuse accelerators with incubators from time to time, here is a short reminder of what the first ones are involved in:
Accelerators are professional organizations, or expert communities, offering fixed-period programs for startups and small companies that are provided with small investment and extensive mentorship for project growth and promotion. It is a sort of intense program where startups learn how to grow a business within weeks or a few months instead of a few years. In return, early-stage companies guarantee a small equity to the accelerator. The most famous accelerators are represented by Y Combinator, Techstars and Brandery.
According to the latest reports by Gust (fundraising management online platform) and Fundacity (fundraising network), 26 new accelerators were launched on the European continent in 2015. For the information, only 11 accelerators opened in the US and Canada within the same time period. Looks like all the mentors decided to move to the Old World, or it is somewhat trendy to be a mentor these days. So why is that?
Experts explain the ‘accelerator boom’ by the activated government initiative focused on encouraging startup development. Therefore, $900 million of the total annual spending from European Commission is directed to accelerators. Hereby, 27% of accelerators annually receive a certain share of public funds, and in some cases, this share is as high as 100%. Another 56% of European accelerators raise money from private sources.
Almost the same statistics is typical of North America. Does it mean European ecosystems are just a few steps away from the Silicon Valley? Not really. Currently, accelerators in the US and Canada are reported to have a bigger impact on business building. Just compare some info about investment deals led by accelerators in 2015:
- the US and Canada – $90.3 million in 2968 projects
- Europe – $41 million in 2574 projects.
On top of that, the number of truly successful startup exits after acceleration programs in Europe significantly falls behind the American ones: 33 against 193 (2015).
Anyway, they predict even more accelerators to emerge in Europe since European ministers are now totally devoted to startup culture and consider it a good job creation option. The question is how effective those accelerator programs will be in the long run and how professional those numerous mentors are. Or is it just another fashion trend?
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