Startup accelerators and corporate accelerator programs are organizations designed to help founding teams refine and build their product by identifying product-market fit and accessing networks of mentors and fundraising. These intense, mostly fixed-duration programs are designed to give founders the lift they need to increase their odds of developing a scalable business while also preparing them to raise seed funding.
Beyond advice and money, many accelerators offer office space, feedback and consulting, help to hire talent, and connections to specific people who can provide specialized feedback. Many popular products we use today wouldn’t be available if it weren’t for the help of a startup accelerator, such as Dropbox, Airbnb, Stripe, Twitch, and Coinbase, among others.
Strategic advisor and entrepreneur Ian Hathaway explains it well: “The accelerator experience is a process of intense, rapid, and immersive education aimed at accelerating the life cycle of young innovative companies, compressing years’ worth of learning-by-doing into just a few months.”
Although often used interchangeably, startup incubators and accelerators are not the same. The former mentors and helps entrepreneurs flesh out their business ideas before having their first minimum viable product (MVP). Most incubators provide co-working space and are usually equity-free, funded by not-for-profit institutions, including governments, universities, etc.
On the other hand, accelerators are usually competitive cohort-based programs with a set duration, focusing on helping vetted startups with MVPs scale while preparing them to raise another round. Most accelerators typically offer nonnegotiable investment terms of $20,000 -$150,000 for an equity share percentage of 4%-7%.
If you are immersed in your entrepreneurship journey and think applying to an accelerator is right for your startup, you’ll need to find the one that best meets your needs and industry; This article introduces you to the top startup accelerators in the USA.
Best Startup Accelerators in the United States
1. Y Combinator (YC)
Y Combinator (YC) was one of the first and most well-known startup accelerators, primarily due to its success and the high-profile companies that have graduated from its program. Based in Silicon Valley, Y Combinator funds two new cohorts of startups every year, investing $125,000 for 7% of each company. Some big-name startups to come out of Y Combinator include Airbnb, Dropbox, Stripe, and Reddit.
According to their website, the goal of this accelerator is to “help startups really take off.” This is accomplished by helping companies have a better product with more users and more options for raising capital. During these three months, participants work with mentors and industry experts on tackling small problems (like the company’s name) and big problems (like how to take over a market). At the end of the program, the startups present their business at Demo Day to an audience of venture capital firms and a select group of angel investors.
To apply, you must have at least 10% equity in the startup to be considered a founder, and only founders may attend. Y Combinator accepts applications until the batch starts in the summer, but they may not get back to you in time if you apply late. Although most companies admitted are for-profit businesses, YC also works with a small number of nonprofit startups every year.
Once accepted to the program, you’ll complete a 3-day “startup bootcamp” and have group office hours where you and five to eight other early-stage companies will work with Y Combinator partners. There will also be private speakers throughout the three-month batch to talk about their entrepreneurial journeys. After graduating from the program, alumni companies will have access to Bookface- a platform of founders and Y Combinator alumni who can answer your questions or make an introduction. Going through this program will open doors to the Y Combinator alumni network, one of the most powerful in the startup world.
Y Combinator is best for:
- High-growth startups
- Tech startups/products
- Seed-stage startups
TechStars is a seed accelerator founded in Boulder, Colorado, that has helped more than 1,600 companies with a total value of $8 billion. Notable investments include SendGrid, Outreach, SalesLoft, and ClassPass. TechStars has expanded to other geographies, including Boston, New York, Seattle and Berlin, Paris, and Oslo in Europe.
TechStars operates about 50 individual virtual, in-person and hybrid accelerators worldwide in multiple industries and vertices, including fintech, healthcare, blockchain, cybersecurity, etc. For example, the Sports Accelerator program in Indianapolis works with early-stage startups in the sports tech sector.
Like Y Combinator, TechStars acquires the right to 6% of the company’s stock for $120,000. In exchange, founders go through an intense 12-week accelerator program that includes hands-on mentorship from TechStars mentors and the opportunity to present during demo day. Completing the program also provides companies access to the TechStars global network for life and over $1 million in perks, including software discounts, cloud space credits, and top-tier professional services.
You’ll first need to find a TechStars accelerator right for your startup to begin the application process. As with other accelerators, TechStars is highly competitive, accepting 1-2% of companies that apply. Participating in the accelerator might mean moving to a different location for the duration of the program.
TechStars is best for:
- Tech startups/products
- High-growth startups
- First-time entrepreneurs
- Startups that want access to a global world-renowned network
AngelPad is a seed-stage accelerator that operates in New York and San Francisco. It’s been ranked “Top U.S Accelerator” by MIT’s Seed Accelerator Benchmark every year since 2015. Founded in 2010, it has launched more than 150 companies, including Buffer and Postmates. Like other accelerators, Angel Pad invests $120,000 in each company and provides them access to more than $300,000 in cloud credits.
Unlike other accelerators that have started to scale up, expand globally and work with more companies, AngelPad stays focused, working intensely with a small group. AngelPad runs programs every six months, each for 15 new startups selected from thousands of applications. So far, AngelPad has helped more than 150 companies raise more than $2 billion in various verticals: SaaS, marketplaces, API, advertising, healthtech, AI/machine learning, data, etc.
Applying to AngelPad involves a written application and a custom video. As with other top accelerators, the acceptance rate is less than 1%. However, if you get accepted into the program, they help with everything, from product development to finding product-market fit and defining a target market to getting first validation. The husband and wife team at AngelPad also helps you prepare to meet investors and raise funding.
AngelPad is best for:
- High growth startups
- Tech startups/products
- Startups looking for personalized high-touch mentoring.
4. Plug and Play
Based out of Silicon Valley, California, Plug and Play connects blue-chip corporations with the brightest and most promising startups. Throughout the years, they have invested in 2,539 startups, and their portfolio companies have raised a total of $9 billion. They achieve such levels by leveraging their partnerships with 500 major corporate partners and 300 VCs. Unlike other accelerators, Plug and Play also has an in-house VC team that participates in seed and Series A rounds with other top investors.
Its alumni and portfolio companies include Dropbox, PayPal, and Lending Club.
What’s unique about Plug and Play is that it’s “stage agnostic.” Whereas other accelerators want to work with early-stage startups (often so early they don’t have a product yet), Plug and Play will accept and invest in pre-seed to Series C and beyond. But like other accelerators, they offer different programs for different industries and sectors, such as real estate, construction, cybersecurity, insurance, and even fashion. As with other accelerators, the Plug and Play program includes access to world-class mentors, their alumni ecosystem, free office space, plus the unique benefit of getting introduced to over 500 of the world’s largest corporations to help startups land pilots and grow faster.
Another significant difference between Plug and Play and other accelerators is their business model: They don’t take a fixed amount of equity in exchange for cash. As its website explains: “Stop giving equity to accelerators. We do not ask participating startups to give up any ownership. We would much rather invest in your next round of funding fairly.”
Plug and Play is suitable for:
- Companies who don’t want to give up equity
- Any stage of fundraising (Seed to Series C)
- Companies looking for corporate partners
5. 500 Startups
500 Startups is one of the most prolific early-stage investors globally, operating four major and 13 micro funds. PitchBook’s 2019 Annual Global League Tables found it to be the most active VC firm in terms of exits and deal counts. It has invested in more than 2,400 startups all over the world. Significant investments include Udemy, Canva, and Credit Karma.
500 Startups operates a group of different seed accelerators and founder programs. The San Francisco Accelerator’s flagship program lasts four months and focuses on helping early-stage startups scale. As part of the program, 500 Startups invests $150,000 in each company for 6% equity. Other accelerators focus on specific industries, investment stages, geographies, and even specific problems (e.g., the Kobe Accelerator focused on tackling challenges related to COVID-19.)
Unlike other startup accelerators, 500 Startups does not operate in batches. They accept applications on a rolling basis, tailoring each program to the needs of the founder. If you join this accelerator, you gain access to a thriving startup community, tailored advice and mentorship, hands-on support, a curriculum full of valuable information, and a network of 1,000+ founders and mentors.
Other top accelerators in the USA include:
Alchemist Accelerator: A 6-month program focused on accelerating early-stage startups that sell to enterprises. Alchemist offers $25,000 in funding for 5% of a company. These terms are negotiable.
Dreamit Ventures: Specializes in accelerating companies with revenue in the healthtech and securetech industries. They are known for their two-week “Customer Sprints,” where companies meet with potential enterprise clients, get feedback, and enhance their industry networks.
MassChallenge: Hosts multiple accelerator programs across the world. Mass Challenge does not take any equity and is “committed to advancing new technologies that will have a wide impact across multiple areas.”
As you can see, each startup accelerator is different. None of them claim to serve every type of founder. If you are considering applying to an accelerator program, you want to make sure the benefit and value they provide aligns with your vision. Before appying, it is worth researching who the mentors are and talking to other founders that have gone through the program.