What are accelerators?

Accelerators are organisations that provide various forms of both financial and non-financial support to early stage businesses, with the aim of helping to “accelerate” the business and improve its chances of attracting investment at a later stage.

What forms of support do accelerators supply?

Accelerators sometimes provide equity funding (i.e. funding for shares) or grant funding and, often more importantly, non-financial assistance to companies. The main types of non-financial assistance that an accelerator can provide include: (1) the provision of subsidised office space; (2) software or hardware for the development of technology or IP; (3) marketing and advertising services; (4) introductions to other investors and people who may help further grow the business; and (5) mentoring support.

How can an accelerator help your studio or business?

An accelerator can help a studio or other business that is at the early stage of its development and needs advice on its future plans and any or all of the forms of support outlined above. In recent years studios have benefited from accelerators such as Microsoft Ventures Accelerator and London and Elevator’s Global Domination Accelerator.

How does an accelerator work?

Most accelerators operate rounds of scheduled events and support activities that run for a fixed duration (typically around three months) and so applicants will need to apply for their services in these set windows. Studios interested in applying to an accelerator should note that the terms of any cash injections are usually non-negotiable. A studio chosen to participate by an accelerator will usually work onsite at the accelerator’s premises for the duration of the programme. This allows the entity to get the most benefit from the mentoring, support, introductions, lectures, and the other benefits the accelerator provides. Finally, normally the key factor in the selection process is down to the willingness of the founders to receive advice and adapt the business accordingly.

Considering a tech/ecommerce accelerator

There are few video game specific accelerators currently active in the United Kingdom, and any video game business that is successful in applying to a more general tech/ecommerce accelerator may find that any given advice or any introductions made may be too generic or too focussed on technology and ecommerce businesses for the video game business to derive sufficient benefit from it.

“Accelerators” and “Incubators”

Although the terms “accelerators” and “incubators” are often used interchangeably there are a few differences in how they operate and their aims. The main difference is that incubators are usually run as non-profits designed to help start-ups find their footing through shared space and costs to help boost the local economy. Accelerators are run for profit by taking an equity stake in each company they host. As well as this, accelerators are usually time limited programs, while incubators sometimes do not have any time limit on how long a company can continue to use the services.

Taking advice

As accelerators are generally profit-seeking businesses, care should be taken when reviewing and accepting a place on an accelerator to ensure that you are comfortable giving away the amount of equity the accelerator is asking for. It may be a good idea, depending on your budget, to seek legal advice to make sure you are protecting yourself properly.

Where can you find out more?

Feel free to contact Mark Phillips or Alan Moss if you need any further information on Accelerators.

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