The worldwide startup ecosystem
On my post from the 14th of September I wrote about what it means in general to participate in a startup ecosystem driven by an accelerator. With this post I want to go into the specifics of each participant group, starting with one of the most important groups: the entrepreneur itself. Within a startup ecosystem one can distinguish basically between two types of entrepreneurs. The entrepreneur running the accelerator program locally, as well as the entrepreneurs participating within the program. This post is focusing on the entrepreneur running the program, his objectives and the influence on participating teams:
Firstly, they are often experience and ideally have founded several businesses whereby they have been able to establish various ties across different industries. This is very significant; hence the accelerator is only running on slim resources and is heavily dependent on involved partners, as program manager once stated:
“Of course compared to many other companies and projects it is actually extremely slim on resources this whole venture. So you really require one strong anchor in each city.”
By having strong ties towards a corporate as well as within the investment scene the running entrepreneur will be able to obtain resources for running the accelerator on the one hand as well as establishing connections between the accelerated startups and potential capital providers on the other hand. Furthermore, due to their wide spread network they have better access to information and can use these more elaborately. Secondly, by being an experienced entrepreneur they can better relate to the problems and challenges, which the participating teams come across:
“They can understand what makes a successful entrepreneur, understand the pains that they go through. If they haven’t done it, it is really hard to understand from an outside perspective how an entrepreneur should build a company.”
The aspect of role model creation and corresponding support captures a significant role within this process as it provides credibility and understand the problems from an outside perspective is often difficult. By running a program with no entrepreneurial background a lack of credibility will harm the process of collaboration between the managing director and the entrepreneurs.
However, the question remains. Why do experienced entrepreneurs do this?! Firstly, they are driven by giving back to the entrepreneurial community, very similarly to mentors. An interviews investor recognized this behavior and said:
“They get to give back to the ecosystem, which has come to them. So they have been entrepreneurs themselves and they want to give back to the ecosystem.”
Running entrepreneurs are not only necessarily driven by potential profits. Experienced entrepreneurs often recognized the value of an ecosystem themselves and know opportunities, which are being created – especially for young teams – through giving back without asking anything in return increase the odds of success. Consequently, one can identify a sharing mentality among entrepreneurs. However, some of them also do act as angel investors as a program manager indicated to startup-experience.com:
“A lot of them are also angel investors.”
The accelerator provides a great opportunity to receive early access to startups to invest in – in other words the running entrepreneurs are taking advantage of the accelerator’s deal-flow capabilities. Hence, managing entrepreneurs can take over the role of an investor as well. As the statement implies they belong to the group of angel investors, which shows that they do not step back from their mentoring and advising role although they are financially involved. Rather one could identify that it will strengthen the bond as the teams and the running entrepreneur are more closely tied together through the investment made.
To receive a more practical understanding of who these persons are take a look of the management board of the Startupbootcamp program and Rockstart Accelerator program and you will recognize their diverse background disembogueing in a role being challenging but supportive to your startup.