As an accelerator operator or program manager you work hard to make sure that your startups are all “investor-ready.” Until now, that meant helping them craft their investor narrative, build their pitch deck, organize their data room and prepare for demo day. But times have changed.
There are now more accelerators operating around the world. The size of each graduating class has grown exponentially. And, in these post-COVID times, geographic boundaries have nearly vanished and venture capital has begun to decouple from geography.
That means founders are considering accelerator programs outside of their communities and choosing programs tailored to the specific problem they are solving, market they are addressing and customer base they are acquiring, rather than generic, nationally-recognized programs.
Now, more than ever, investor-readiness is the natural byproduct of customers and revenue (not pitch decks and data rooms).
Traction Speak Louder Than Words
Founders are graduating from accelerator programs unprepared to go to market. That makes it nearly impossible for them to acquire the kind of revenue that attracts investors, especially in nascent startup ecosystems.
In working with accelerators all around the world, we have first-hand experience with the rising challenge that programs are facing to attract top startups and secure funding, not only for their founders but also for the accelerator program itself.
Nowadays, the most successful accelerator programs:
- Have structure and a curriculum that hold their founders accountable and help deliver real revenue results;
- Allocate at least 25% of weekly program time to helping their founders do the actual work of go to market; and
- Enable their founders to effectively communicate a specific, bottoms-up go-to-market plan and progress (not just a general, top-down total addressable market number).
Help Is Due Diligence
We work with accelerator programs around the world to help their founders become investor-ready through customer and revenue traction. That’s how we identify, qualify and earn investment opportunities.
Here are three things that you can do to help your founders become truly investor-ready:
1. Allocate more time to the actual work of finding product-market fit.
When evaluating a startup, one of the first things we look at is the founders’ calendars to see the number of hours they’re putting into revenue every day. Pitch decks boast of big revenue goals, but founders are not putting in the time required to achieve them.
Include a regular cadence of concentrated revenue generation time into your accelerator program. Hold your founders accountable by getting them to recognize where their time is going in relation to their revenue goals and runway needs.
Founders should be prepared to spend 25% of their total time in any given week on the development and execution of their go-to-market strategy.
2. Use a go-to-market framework and curriculum.
Your founders may have attended a product developer bootcamp or earned a computer science degree, but there are no market development bootcamps or sales degrees. And there’s also no GitHub of sales or Ruby on Rails of customer development.
Your founders likely show up on Day 1 with no early-stage sales training or experience. Hosting mentor lectures is an excellent way for your founders to get excited about developing their go-to-market strategy. But, hearing the story of how someone else did it does not enable them to do it themselves.
Product and markets may be unique, but the path to finding product-market fit is not unique. Help your founders to follow a framework and curriculum that not only teaches them how to go to market, but gives them the playbook to execute each step along the way.
That’s exactly why we built MXP Online. Why reinvent the wheel?
3. Start their go-to-market journey off by helping them identify their Ideal Customer Profile (ICP).
In our experience, the clearest indicator as to whether a startup will be successful in getting to market and finding product market fit boils down to how well they know their ICP.
We’ve worked with entrepreneurs from hundreds of accelerators around the world including some of the top, name-brand accelerators in the world, and the overwhelming majority of accelerator graduates still don’t have a clue about who their ICP is.
This is critical. If a founder does not know who their ICP is, then the likelihood that any go-to-market strategy will work drops dramatically.
Move beyond customer development theory exercises like the Business Model Canvas and persona exercises. While these resources can be valuable at the ideation stage, when it comes to actually acquiring revenue, founders need a more granular and tangible sense of the specific characteristics that define their best, initial customers.
Feel free to share our ICP Starter Kit with your founders. It has everything they need to take this foundational go-to-market step.
Focusing your founders on customer and revenue, and enabling them to do the actual work of going to market, is a competitive advantage that will help you attract the best founders, graduate investment-ready startups and attract public and private accelerator funding.