By Candice M Hughes, PhD, MBA
Women-led Startups are Successful: Good Luck Finding One
Only 3-5% of startups are led by women. I’m leading one of these few firms at the crossroads of education, health and technology. Even though the number of women-led startups is tiny, they tend to be highly successful when they have access to resources. A Kaufman report described in Bloomberg BusinessWeek found that “...women-led high tech start-ups are “...more capital-efficient, achieve 35% higher return on investment, and – when venture-backed — generate 12% higher revenue than male-owned tech companies...”
Accelerators: Turning Up the Growth in Startups
How can these brave outliers in the startup world be nurtured, giving them a greater chance to achieve the growth they are capable of? Accelerators are increasingly the path to growth for both men and women-led startups. Over 200 accelerators exist in the United States, with the number growing substantially over the past few years. More recently, accelerators have cropped up with a mission to boost women-led startups. I recently graduated as a member of the first class at a new accelerator, The Refinery, in Connecticut that aims to take women-led startups to the next level of growth.
What is Being in an Accelerator Like?
I’m not going to sugar-coat it. The experience of going through a startup accelerator is both invigorating and exhausting at the same time. Just running a startup on its own is a challenge. Imaging doing that on steroids. Not only are you managing product development, marketing, accounting and all the other responsibilities to keep your firm running. But you are also spending hours on weekly assignments, giving up half a day or more to weekly classes plus setting up and being present at mentoring sessions. Being part of an accelerator is not for those who enjoy sleep or are addicted to Breaking Bad or other broadcast obsessions.
Value Offered: Networks and Funding
Even given the challenge of maintaining focus on your business while ramping up growth, I strongly encourage founders to consider joining an accelerator. Accelerator value propositions focus on the two most critical aspects for startup success: networking with highly intelligent and skilled mentors plus access to and networking with potential investors.
Besides mentors, accelerators offer peer relationships with other entrepreneurs in the cohort. When you’re working around the clock, having a group of smart, savvy founders to turn to for advice or support is incredibly valuable and hard to find outside of an accelerator.
The classes and learning are also useful to achieve a high level of polish and fluency with all the functional areas necessary for successful founders. If you are an experienced founder, you may find that you already know some or most of the class material. However, even the most experienced founder will value relationships with an A-list of contacts. Having a warm introduction to a key influencer often means the difference between being invited to have a one-on-one conversation versus getting the brush off.
One factor to assess when joining an accelerator is whether or not they take an equity stake (usually 6%-10%) in your firm and may offer a modest amount of cash in exchange ($20,000). Some accelerators charge a modest fee instead of taking an equity stake. As a founder, you will need to decide whether joining a particular accelerator is worth the cost and/or dilution risk.
Why Do We Need Accelerators Focused on Women?
As women, we are in even greater need of an accelerator’s benefits because we generally start our ventures with less funding than men do and have less access to investor networks. This makes accelerators that have a focus on women-led firms such as Astia, Springboard, The Refinery and others, highly valuable as a means to encourage women to launch new firms, to create role models, and to provide a place where we feel we belong, a place that is part of our “tribe”.
Regardless of which accelerator a founder joins having experienced mentors and even investors assist with pitch deck creation plus having the accelerator founders assemble a room full of investors for you to pitch to as your “capstone” for the program is an invaluable experience, especially for women founders who have a tendency to be more hesitant and less confident in pitching.
It Takes a Village to Grow a Startup
While people’s first instinct with startups is associate them with super cool tech or wads of money and press clippings, those things followed years of hard, largely unpaid work by a team of people (no single person can do all the work to bring a product to market and sell it) and good management choices. Money and fame are just the surface gloss and distract from the sweat and pain that it took to get there. If you dig into any startup’s history, you will find relationships were critical to success; critical to finding co-founders, funding, staff and more. Women are naturally skilled at building relationships. With an accelerator, women founders can build the right relationships to put their startup on the path to high growth.
Candice M Hughes, PhD, MBA, is a serial entrepreneur who founded AdapTac Games, an award-winning startup, which is developing a training tool for teens with attention deficit hyperactivity disorder (ADHD). @candicemhughes
