500 startup Application: How to get accepted

June 30, 2017

We’ve been through 3 different accelerators with my companies: Startup Chile, in South America; DreamIt Ventures in New York and 500 Startups in good old Silicon Valley. These 3 programs happen to be suited for 3 different stages in the growth of a startup, and the success of our accelerator application was based precisely on timing those stages correctly.

A startup accelerator might be the boost that your startup needs to get to the next level. ‘Get to the next level’ has different meanings for different companies, and since accelerators have become somewhat popular in the past few years, it’s important that you consider if your startup can really leverage the resources they provide, to make it worth your time and that chunk of your company.

Idea Stage Programs

Top US Accelerators according to Techcrunch. 500 Startups missed the cut since they make investments outside of their accelerator program.

There’s only so much you can do before you get some investment in your hands (don't quit your day job yet!). Still, there are plenty of (almost) free experiments that you can run to validate the potential of your idea, and to give you a head start against other applicants.

Create a LaunchRock page to collect leads, and show you have hundreds of interested users. Start reaching out to them on a weekly basis with quality content.
Make a Demo Video (don’t pay over $500 for one, your product will change significantly and it will render it useless).
Create a Squarespace website with a fake Sign Up button (we did this).
Create a Facebook Fan Page and a Blog and get people to start following you.
Hustle some revenue! Try to get users by selling your platform as a working tool, even if you need to do everything manually under the hood (This means $$, and it will be freaking awesome to prove you can actually make money).

In both of the companies that I’ve founded we’ve been able to hustle some money our way before even looking for any investments. On my first startup we did a Kickstarter Campaign and on Slidebean we supported the team by doing development and marketing consulting, this paid our bills (we are not 20 anymore and we have families to feed) and gave us about 40% free time to work on Slidebean.

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The rise of Latin American incubators

Start-up Chile is an example of an idea stage accelerator/incubator, with a similar model to Wayra, Startup Brazil, NXTP Labs in Argentina and Startup Mexico. As you can see, most of these programs are Latin America-based and many of them are also hosted by the government; the advantage: equity-free investments.

While their investments are conditioned to bureaucratic bookkeeping and carefully monitored expenses, they can provide you with the capital that you need to get things moving (and hey, it won’t cost you a chunk of your company). Furthermore, the experience of living abroad is great, and it will connect you with a lot of people similar to you.

The programs themselves are not that ‘accelerated’, they feel more like college rather than a business accelerator. Mentors are limited and only few of them will have real startup experience, and while the programs will connect you to some local investors, most of them only put money on companies that will remain in those countries.

The application process for these programs is pretty much a huge questionnaire that will take a couple days to fill out, in many cases this is the only filter that they’ll have (no calls or interviews). Secret tip, since so many people apply, applications are filtered by screeners from companies like YouNoodle, so it’s utterly important that you make your business extremely easy to understand because the first filter will be made by someone that is not tech-savvy.

The team information will probably be even more relevant than your business info. Remember, they are looking to bring awesome teams to spread the startup culture, so make sure that you highlight your team as much as your product (which is likely not developed at this point).

Post-launch programs in the US and Europe

This is the category where accelerators like DreamIt Ventures, ERA and Startup Wise Guys fit in. With exceptions, they usually accept companies with a launched product or MVP and looking to acquire their first customers. Since they are funded by private capital, they will take between 5% and 10% of your company in exchange for the acceleration period and about $20K cash.

You want to be careful about which accelerator you choose. Some of them don’t really have a good mentor network and don’t provide enough value to be worth your stock. Make sure you check their portfolios to find at least a few big success stories. You will also find that $20K will only give you runway for the months you’ll be in the program; so make sure you plan ahead. Many companies are forced to shut down post-accelerator because they run out of money. I’ve been there.

“You want to be careful about which accelerator you choose. Make sure you check their portfolios to find at least a few big success stories.

I can speak very well about the added value that DreamIt provides. It’s a great startup experience if you’re a first time founder, they have access to literally hundreds of investors in the East Coast and they will provide close mentoring on improving your MVP and acquiring your first customers. (Growth stage companies might not get that much value of programs like these, because what you need is growth hacking, which will not be made available to you here).

Getting a spot on these programs is harder, because the cash investment decision is made by the managers themselves. Recommendations go a long way, and it’s a great place to start if you can get one. On the applications you’ll be competing with other companies with launched products; so again, showing good signs of revenue will make you stand out. A few months ago we hosted a webinar where Andrew Ackerman, the Managing Partner of DreamIt Ventures, goes into how to talk to investors and answers a lot of questions.

Team continues to be a relevant variable, so make sure that your team culture is visible on your application. The most important variable, however, is proof of concept; users, sign-ups, a crowdfunding campaign and even Techcrunch-like press will definitely help, (here’s how we got our TC article).

Growth-stage accelerators, top of the pyramid

Image contains people on the 500 startup application — Batchmates @ 500 Startups.

This category is reserved for programs like YCombinator, Techstars and our very own 500 Startups. With Slidebean, we made it to the interview round at Techstars (but were still too early) and got accepted to batch 11 of the Silicon Valley 500 Startups class.

Getting into one of these is HARD, you’ll bet competing with startups that have $500K+ revenue run rates, some angel or at least F&F funding and that very likely went through another earlier stage accelerator before they applied.

This application will be about metrics. How fast are you growing? How are you acquiring customers? What is your CPA and LTV? What is the size of the market and how to you plan to reach it? Unless you have Reddit-type virality, you will NEED to have revenue numbers to get through the first screen.

For Slidebean, we had about $2K MRR by the time we filled the 500 Startups application, which actually was irrelevant compared to some of our batch mates. Nevertheless, we had a warm intro from a startup on the previous batch and that ABSOLUTELY made a difference. A recommendation by previous Alumni will almost certainly get you an interview and this is a HUGE head start, since about 50% of interviewed companies actually get a spot.

Edit: we recently did an interview with Elizabeth Yin, one of the partners that interviewed us when we first applied. This is here answer when I asked why we got in:

For programs like these, make sure you make the trip to have a face to face interview. Skype is an option but they certainly pay less attention to those teams. If you don't make the trip it could mean that a) you don't really care or b) your company doesn't have $500 to pay for your trip. Either way, it sends a bad signal.

Interviews are usually 15 minutes long, so demos are required and hopefully some decent slides on growth. We can help with that!

They do care about your passion and your team, but revenue and traction will be much more relevant. Make sure that you understand your growth tactics and do not bullshit them, they know more than you and can tell.

Other Tips

Getting to know the Managing Partners prior to applying is also very useful. If you stalk them enough you might come across some startup events that they will attend. Make sure you introduce yourself and stay in touch about once a month. They are actively looking for companies for their batches and it’s your first chance to make an impression. (Absolutely DO NOT target Dave McClure or anyone in that level. It’s really hard to get a hold of him, he gets pitched all day every day and will likely forget you).

Also, don’t waste your shot with an accelerator by applying too early. If you’re not there yet, better wait and find a program that better matches your stage. Repeat applicants don’t get as much attention unless they show a pivot or stupid amounts of growth.

I’m happy to help with any questions, feel free to tweet me at @cayajose if you need some help figuring this out, or shoot me an email to caya@slidebean.com; I read and respond to everything.

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