Startup Accelerators: How to get in
Hi, I’m Kieran. I worked in startups for five years at On Deck and Wefunder. I contributed directly to the accelerator products ODX (by On Deck) and XX (by Wefunder) at both places. As Head of Admissions at On Deck, I reviewed 15,000+ applications, interviewed 1,500+ teams, and refined what I think makes for a successful application based on all the feedback loops I saw. In this piece, I’ll share my insights into how accelerator admissions work and how to get in.
Read this if:
- you’re interested in applying to a startup accelerator
- you aren’t sure what accelerators look for in a startup
How Startup Accelerators Win
Before diving into how startup accelerators evaluate applications, it’s important to understand how they win – i.e., how they make money.
Startup accelerators win by controlling for three variables:
- Did they pick winners
- The median quality of founders in the program
- Do the founders credit the accelerator with playing a significant part in their success and, as a result, recommend the program to their founder friends + participate in the program with their 2nd and 3rd startups
Did they pick winners
The performance of startups follows a power law curve. The idea is that a few startups will generate most of the returns in a portfolio. This is true for portfolios of startup accelerators, just like venture capital firms. The only difference is the math. Startup accelerators often invest at lower valuations than venture capital firms. As a result, they may profit from startups that reach $1 billion. In contrast, venture capital firms may need startups in their portfolio to hit higher thresholds like $5 billion or $10 billion to make money, depending on their entry price.
Over the long run, a startup accelerator’s brand is associated with its winners. When you think about Y Combinator (YC), you think about Airbnb, Stripe, DoorDash, and Coinbase. You don’t think about their 75th-percentile outcome.
The median quality of founders in the program
You have a better chance of picking winners with more investments, right? Yes, this is a logical conclusion, but startup accelerators need to control for the median quality of founders while trying to find a winner, a competing incentive in some respect.
Good founders will consider who else is joining the program as a significant factor in deciding whether to apply and accept their offer because they know much of the experience is determined by how good their peers are. Your peers will help you tactically and as friends, motivate you to move faster, and define what others think of the community. Suppose the median quality of founders is low. In that case, it may hurt even the best startups when they are trying to raise money. It will also hinder the startup accelerator’s ability to see and pick promising startups in the future because they’ll go elsewhere.
Most startup accelerators control the median quality of founders, especially when they don’t have any winners yet, by keeping cohorts very small and hand-picking in-network teams from the Partners’ relationships to join. In the graph above, you can see how YC kept their batch sizes very small until they had winners, which they then used to anchor their brand, allowing them to take more shots each cohort. If a startup accelerator increases the size of its cohorts without the quality to do so, it will fail, even if they have some winners or promising startups breaking out.
Do the founders credit the accelerator with playing a significant part in their success
It’s not enough to pick winners; you need the founders to like you. YC’s relationship with the Airbnb founders is an excellent example of this. To this day, Brian Chesky, Founder & CEO of Airbnb, still gives back to the program by sharing his story and learnings to new cohorts. Airbnb’s admiration of YC is so profound that other investors in the company, like Sequoia Capital, who invested from Seed to IPO, are jealous, in a friendly way, that Airbnb always mentions YC over them to the press when discussing investors. This endorsement from Airbnb of YC has helped YC sustain its success by getting the next wave of excellent entrepreneurs to pick them over other accelerators and early-stage venture capital firms.
What Accelerators Look for in a Startup
Now that you understand how startup accelerators win let’s talk about what they look for in startups during the admission process. The standard startup accelerator admission process is 2-3 steps. Typically, they will first have applicants fill out a written or video application. This helps them weed out the apparent non-fits. Then, they will invite the top candidates to one or several interviews. During the live interviews, the startup accelerator may pull in alums or people in their network with domain expertise to help them vet the startup. The format and medium of a step in the admission process dictate which questions they may ask, as sometimes a written question is better at telling them something than that same question if asked during a live interview and vice versa. The way I think about creating lightweight criteria for an admission process is to decide on what signals, or qualities, make for a strong applicant, then work backward to design questions that help the team pattern match for whether they stand out in that category. Because startup accelerators win by picking outliers, often, startups need to only really stand out in one category to be selected. For example, suppose a startup accelerator believes a technical team makes for a good accelerator bet. In that case, they may take a team of talented engineers with A+ backgrounds, even if they do not score well in other categories, over another team that rates as a B across the board. I provide this introduction to say a startup accelerator may index for one or many of the things below. This is not an exhaustive list of everything a startup accelerator may look for. Still, it should cover many main categories and give you a great baseline understanding for when you’re applying.
Clarity of thought
The more you’ve obsessed over a problem, the more clarity the founders should have around why their approach is the best solution to the problem and why they are the best team to execute it. You don’t need all the answers right away, but you should always be able to explain your rationale behind assumptions and how you plan to uncover the answers to question marks with your startup.
A startup accelerator may ask the following questions to understand your clarity of thought better:
- What’s your vision?
- Why are you working on this?
- What needs to be true for this to become a really big company?
- What assumptions are you making, and what key risks do you see with the business?
- What are the strengths and weaknesses of your team?
Ability to build
YC and other top startup accelerators notably screen out teams who can’t build the product internally. This is because startups need to move fast and iterate. If you are a software company and can’t build software, you will move slower than competitors because you have to wait for your web agency or contractor to push updates to the product. In the world of startups, where speed is one of your only advantages over incumbents and a necessary input to hit milestones with the limited runway you have, many accelerators only pick startups that can build their product internally.
A startup accelerator may ask the following questions to understand your ability to build better:
- What did you build?
- Why did you build this product?
- What insights led you to build this product?
- What timeline did you build this product on?
- What was the most challenging part about building this product?
Speed of progress
The best metaphor I heard of YC and YC Demo Day is that it’s like a laboratory. The scientists are the YC Partners, the startups are the mice, and the 3-month program is the maze. The YC Partners watch the startups to see who is going through the maze the quickest, and then they recommend those startups to their investor friends who scoop up the best startups in the cohort before and at YC Demo Day. Startup accelerators want teams that are moving fast but not to the point where they are cutting corners. They will look for this during the admission process and when evaluating you during the program.
A startup accelerator may ask the following questions to understand your speed of progress better:
- What’s the hardest project you’ve worked on, and can you explain the timeline?
- What do you hope to accomplish by the end of this accelerator program?
Experience
Startup accelerators index on your credentials – where you went to school, what companies you’ve worked for (+ if it was a high growth startup like Ramp or world-class company like Apple), what positions you’ve held (+ if it was a meaningful role and you were there during an inflection point or early) – and your slope – how fast do they think this person learns and believe you’ll become a formidable founder.
A startup accelerator may ask the following questions to understand your experience better:
- What’s the most impressive thing you accomplished in your past role?
- What would you do differently if you were in charge of the last startup you worked for?
- What responsibilities did you hold in that role?
- For repeat founders, what did you learn from your last startup?
References, Referrals, and Cosigns
I wrote a piece on the most valuable references for a startup founder. Like any other investor, a startup accelerator will care to some degree about what others in their and your networks think about you. While some founders may call them sheep for doing this, I also think, as a startup accelerator, it would be dumb not to listen to your network, who may have more information than you on a startup or founder than what you can get from a short application. For example, someone in your network may have worked with that founder for 2.5 years. Startup accelerators will factor this information into the equation in some capacity, but they should also understand that the person giving them the info has different incentives and a level of calibration than they do.
A startup accelerator may ask the following questions to understand your references better:
- Why did you pick this person as your reference?
- What do you think about your reference?
- Do you think your reference would work for you or invest in you?
Market
Big companies can only exist in big markets. It’s less important how big the market is today and more important how big it will become in 5-10 years. If a startup accelerator likes the team but not the market, they may take them under the agreement that the startup works on a new idea during the program. Or, they may ask them to apply again with a new idea to a future cohort.
A startup accelerator may ask the following questions to understand your market better:
- How big is your market today?
- How big is your market expected to grow in 10 years?
- What factors drive the growth of your market?
- What do you understand about your market that others don’t?
- What types of companies have historically won in your market?
Team dynamics
YC is famous for evaluating team dynamics during video and live interviews. Some red flags include if one founder is dominating the entire conversation, if the founders are talking over each other, and if a founder is answering a question that was directed or better suited for another founder. Many startup accelerators have followed suit and are looking closely at this. Team dynamics also show up in written application questions. For example, a wide equity split between cofounders may indicate how they feel about each other and how important they are to the business.
A startup accelerator may ask the following questions to understand your team dynamics better:
- Who does what at the company?
- What disagreements have you had as cofounders, and how did you solve them?
- How well do you know each other?
- Who makes the final decision?
Product and users
This Justin Kan tweet from a few years ago blew up, but he later went on to change his mind and said that making a good product is 99% of the battle. He found this out when building Atrium, where they had great distribution channels and big-name investors, but it distracted them from making a great product, and the startup failed. The product matters a lot, and you can often tell very early whether a team is capable of building a well-crafted product that meets their users’ needs.
A startup accelerator may ask the following questions to understand your product and users better:
- What is the product?
- How do people use your product?
- Are they using the product the way you initially expected?
- How do people find out about your product?
- How will you get lots of people to find out about your product?
- Who are the people using your product?
- Why are they using your product?
- Who are the people that love your product?
- Why do they love your product?
- Have they recommended the product to their friends?
- Who are the people that didn’t love your product?
- If they stopped using your product, why did they?
- What metrics are you tracking to measure your success?
- Why did you pick those metrics?
- What is the next iteration of the product?
- How long will it take to get to that next iteration?
Business model
There’s a larger number of good ideas than there are good businesses. That’s because for it to be a good business, you must make lots of money. While startups may make it into a startup accelerator without a fully refined business model, it’s good to have some ideas on how to make money when you show up to the interview.
A startup accelerator may ask the following questions to understand your business model better:
- How do you make money?
- How much do you plan on charging customers?
- How do you know they will pay that price?
- What are your unit economics?
- How much will it cost to get your product to market?
How to get in
Now that you know what accelerators look for in a startup, you can better prepare for the types of questions they may ask you during the application and interview process. With that being said, a well-designed admission process can’t be gamed. It doesn’t matter how well you prepare -- if your startup idea, approach, product, team, or market is flawed, that will come to light. The best thing you can do to increase your chances of getting into a startup accelerator is simply to focus on finding a path to building a billion-dollar startup and running as fast as you can down that path. Even if you hit a roadblock early, that will help you reach more clarity around whether you can get over that hurdle or need to change directions. The better your clarity around your startup, the easier it will be to get into one of the top startup accelerators. Good luck!
