A letter to startups: 5 reasons why getting denied by your accelerator is actually NBD
Picture this: you’ve completed the next wave of 1,000-word applications for your startup, sent off your pitch deck to an accelerator, and anxiously await their response. Three weeks later, after a brief 15-minute interview, you’ve been rejected. The accelerator cordially writes, “your startup has a lot of potential, but especially in this market (namely, the COVID-19 Pandemic), we’re looking for more traction.”. Now what?
Picture this: you’ve completed the next wave of 1,000-word applications for your startup, sent off your pitch deck to an accelerator, and anxiously await their response. Three weeks later, after a brief 15-minute interview, you’ve been rejected. The accelerator cordially writes, “your startup has a lot of potential, but especially in this market (namely, the COVID-19 Pandemic), we’re looking for more traction.”.
Well, you could scratch your entrepreneurial goals completely, and build a more compelling, investor-friendly startup in healthcare (there’ll always be a need for that, right?). While that isn’t a terrible backup plan, we’re here to assure you that you don’t have to put away your current venture on hold.
Without further ado, here are 5 reasons why getting denied by your accelerator is no big deal, and how Pixoul can help if this happens to you.
1. Accelerators might not be the best fit
Before we go into this topic, let’s break down how exactly an accelerator works so that we’re all on the same page. Accelerators offer various educational and resource-based programs in exchange for standard equity or debt deal (SAFE’s, etc). While some don’t supply capital in addition to their program offerings, $20k - $150k is normal. And that’s the first mistake startups make—they focus on the capital and they forget the myriad of programming opportunities an accelerator affords. If you’re merely looking for funding, pursue an angel investor, not an accelerator.
Either way, equity investing doesn’t fit every startup and every business model. Either way, one thing any investment needs is a great story. At Pixoul, we pride ourselves on crafting compelling stories that resonate with every audience—from C-suite executives, to investors, to your most loyal customers. That’s why Pixoul takes a different approach—we can actually help guide you through the investment process, help keep your cap table clean, and get your MVP off the ground—all while helping you maintain your equity and your sanity.. We pair startups with our best teams, because we know today’s startup client, is tomorrow’s multi-million dollar client. We treat you like the brand we know you’ll be one day. Not because we want to secure a contract, but because we know it’s the right thing to do. By investing time and talent, and occasionally even an investment of our own, Pixoul takes a more practical approach to ensuring the success of startups.
2. Opportunity to explore other ptions
Entrepreneurs are often keenly aware of the pain they experience during accelerator or investor rejection. Is there something wrong with the business model or product? What did the investors see that you did not? How could you possibly be rejected compared to others whose ideas seem so unlikely to succeed? For most people who experience these situations, they’ll admit that rejection is painful at the moment, but worked out for the better in the long run. Now that you know that one particular accelerator isn’t for you, you’re free to explore plenty of other options!
If you’re drawing blanks, here are a couple of ideas to try:
a) Apply to other accelerators. The Y-Combinators of the world run fantastic programs, but they aren’t the be-all, end-all of startup funding. Plenty of successful startups have been denied by their ranks. If nothing else, take it as an opportunity to prove them wrong.
b) Raise funds with alternative means. Crowdfunding, debt funding, and (our personal favorite) revenue sharing, are all potential options. Equity capital is only the tip of the iceberg! Fill out a contact form so that we can see if you’re a good fit for one of our many investment partners.
3. You’ve got your time back
We know—after an unfortunate incident, saying something like, “Well, at least you have more time now,” is as about as insensitive as it gets.
But hear us out.
Your time as a professional is one of the most valuable assets you have, and you don’t want the countless hours you’ve already spent on your startup gambled away by a well-intentioned but ill-performing accelerator (not to say that this is all accelerators, but it applies to a few). And while your business may not be generating exponential revenue (yet), use your rejection to reflect on your startup, solidify its strengths and mission, and ask for feedback from trusted advisors and colleagues. Not only will you refine your business proposition during this time, but you’ll also increase your chances of being accepted by the next accelerator you apply for.
4. You don’t need an accelerator to have a demo day
If you’ve done your research on accelerator programs, you’re likely aware of demo day, an event where startups make their pitch to a group of eager investors. While this is a great opportunity, the truth is that most successful startups are not making their first pitch to investors on demo day. Rather, entrepreneurs should have taken the time to meet with and introduce their business concept to investors early. Come demo day, investors aren’t hearing a pitch for the first time but rather measuring the growth that’s been made along the way.
Amid the COVID-19 pandemic, investors are becoming more accustomed to online pitches thanks to communication tools like Zoom. If you’re able to secure meetings early and often, early pitches can still be made. But don’t expect demo day-esque success on your first pitch. Think of it as an introduction, and continue sharing progress for the months to come.
5. There are still many opportunities to make great connections
Perhaps you’re one of those entrepreneurs who’s applied for an accelerator for the chance to make valuable connections. If that’s still your goal but you don’t have your accelerator, don’t despair! There are lots of ways to make industry connections that’ll help get your startup the credibility it deserves. To start, self-marketing is an inexpensive alternative, often only requiring a bit of time and courage to establish connections on LinkedIn or a similar website.
In the tech world, everyone’s interested in expanding their network, so a friendly, “Let’s connect over lunch,” can do wonders—even if that lunch has to be remote. When you’re ready, contact us, and we’ll connect you with the some of the most forward thinking design talent around. Whether you’re looking to redesign a product, or redesign your pitch deck, we’re here so you can put your best foot forward with both customers and investors.