Are Startup Accelerators Worth It? | Sidebean

0:00This episode is brought to you by Subaru. You know that place your mind always wanders to? The lake, the mountains, the homes of the people you love most. The completely redesigned 2026 Subaru Outback is built to help you get there. With legendary capability, standard symmetrical all-wheel drive and the confidence to go further. The 2026 Subaru Outback. Love never looked so good. Visit Subaru.com slash outback to learn more. You've been searching for the right foundation since forever. But now finally, you can find your match with Sephora. With so many options from the best brands, you can pick the shade, coverage, and finish that's just right for you. And don't worry, it's easy to find your match with help from our expert beauty advisors and shape matching tools. Plus free samples to take home and try. Visit Sephora in-store and online to find your match. Flowing ad bunched on metrics that look great. Till the CFO sees them, that's bullspend.

1:01And marketers are calling it out in dashboard confessions. I remember telling my boss, it'll be good for the brand when leads were slow. Yeah, it wasn't. Cut the bullspend. LinkedIn lets you target by company, job title, and more. Advertise on LinkedIn. Spend $250 on your first campaign and get a $250 credit go to LinkedIn.com slash campaign term secutions apply. This video was not sponsored by Startup Chili or Dream Adventures or 500 Startups. Now directly at least, but all three of them invested in Slidebean and helped us get our company to where it is today. My co-founders and I all went through these programs as we started the company. We ended up living in Santiago, Chile, the New York City, and finally in the Bay Area, aka Silicon Valley. In this video, we are going to look into what Startup Accelerators are, choosing a program that is worth it for you or deciding if you should skip them altogether. And finally, how to get in. This is Startup Accelerators.

2:03So the first thing that accelerators will appreciate is that you don't get them confused with the concept of an incubator. An incubator like Erlix is a mostly outdated model where companies can benefit from the program for a significant amount of time. You just admitted to starting a competing incubator. I've caught you in a web of your own lives, haven't I? I don't think so. Wait, have you? Incubators can still be seen in academia where students or graduates get access to office space and mentoring. An accelerator, on the other hand, is usually a three or four month program that looks sexually to accelerate companies. Most accelerators provide some capital so that the Startups can invest more freely and take a percentage cut on the company either as equity or as future equity in the form of a safe or convertible note. Go watch our video on convertible notes. The infrastructure of an accelerator is typically one or more physical offices where companies can work for the duration of the program. Though programs like Y-Combinator don't offer a physical space so it's more of a remote kind of program. Managing partners and or entrepreneurs in residence which work directly with the founders

3:06by meeting with them every week aside from their managerial tasks. Then a network of mentors, some closer than others. The closest ones are regularly in the office space and can assist companies with specific topics such as ad management or pitch and design practice and analytics. The rest of the mentors are available for occasional one hour calls and a first come for a serve basis but you shouldn't count on being able to speak to them very often. Finally, a network of investors. So there is by no means a guarantee that you will receive funding by getting into an accelerator but you can get intros to most of them through the accelerator stuff which does open a lot of doors compared to trying cold emails. Choosing a program. This set we've been through startup chili, dream adventures and five-front startups. The latter two according to this diagram by seedrankings.com fit into the silver and gold categories. We'll get back to this in a second. Start up chili doesn't show up in the chart because the model is a little different so let's start with them. Start up chili provides companies with a grant funded by the government of chili to promote entrepreneurship in the country.

4:07Chili seeks to become a startup hub in South America so the government allocates about $35,000 for each company for founders to get their ideas of the ground. Over 200 companies are accepted each year which means that this is a government investing about $8 million a year building this startup hub and they've done it for a good amount of years now. We are part of batch 8 of startup chili from November 2013 to June 2014, a six month program. Actually relocated the team to chili which is a requirement to participate. Most companies coming into the program are early or idea stage so if you don't have any traction yet this might be possible for you to get in. The program is more of an incubator where you get free office space for six months, some access to mentors and investors but you are mostly on your own. Each company makes the most out of it in their own way but it's essential that you come in with your objectives and your expected milestones very clear. Now you don't have to give any equity in exchange for the grant but you're expected to get involved with the local community by organizing meetups and events which is a very fair deal if you ask me.

5:08I would likely be able to find other government grants like this one in nations that are just getting started with their tech ecosystems. I don't know any specific ones but feel free to share any you know in the comments. Let's move to Dream It. So Dream It is classified as silver in this chart. Haven't been through the program. I can speak first hand about what they do which I expect will be comparable to other programs in this silver category. Now Dream It used to invest $25,000 in exchange for 6% of common company stock. So they used to target early stage pre revenue companies and focus on their pitch techs, the story and the product launches. This is when we went through it. They have since evolved and doubled down in some specific industries where they have the connections to make a difference for the starters. And those are urban tech, health tech and secure tech. Companies are no longer required to relocate. Instead the program is remote and they go on a customer sprint about halfway through the program and then an investor sprint towards the end. The industries Dream It serves require a network to be able to find the right person inside

6:08a large company enterprise to become interested in this new innovative product that the starters might be building. So their investment and equity requirements vary from company to company but they have focused their model on coming in at the same terms as they investors they help you find. So to be able to get in front of customers by week seven companies need to have a live product by the time they come into the program. Dream It is a much more structured program than starter Chile. Also of course more selective. They only take about ten companies from each industry every year. Now when Slidebean went through Dream It I used most of my professional time to meet with their investor network. Most of my time went to getting meetings and pitching investors. Well that experience served me well for what Slidebean has become today and then I can pass it on to you. It didn't get as any funding during the program. We got out of Dream It with about $1,500 in monthly recurring revenue which was of course not enough traction to prove that this presentation product was going in the right direction. Which brings me to 500 starters. We had our doubts about applying but ended up going for it. At the beginning of October 2014 we were three weeks away from running out of cash when

7:12we got a call from 500 inviting us to the interview. It wasn't a question and whether or not we needed another accelerator. 500 starters as $100,000 investment was really the only cash that we had access to. The deal back then was $100,000 investment out of which $25. This episode is brought to you by Subaru. You know that place your mind always wanders to? The lake, the mountains, the homes of the people you love most. The completely redesigned 2026 Subaru Outback is built to help you get there. With legendary capability, standards and metrical all-wheel drive and the confidence to go further. The 2026 Subaru Outback. Love never looked so good. Visit Subaru.com slash out back to learn more. You've been searching for the right foundation since forever. But now finally, you can find your match with Sephora. With so many options from the best brands, you can pick the shade, coverage and finish that's just right for you. And don't worry, it's easy to find your match with help from our expert beauty advisors and shape matching tools. Plus free samples to take home and try.

8:14Visit Sephora in-store and online to find your match. Or your ad campaign's lighting up the dashboard. But not the pipeline. That's bullspend. And marketers are calling it out in dashboard confessions. My boss asked for results, so I opened my dashboard for the only positive sounding metric I had. Impressions. Cut the bullspend. See revenue? Not just reach. LinkedIn delivers the highest return on ad spend of major ad networks. Advertise on LinkedIn. Spend $250 on your first campaign and get a $25 credit go to LinkedIn.com slash campaign turn secretions apply. $1,000 were paid back for the actual accelerator program. So they have a safe type of document that guarantees them 7% of company stock using the same preferred stock terms as the next qualifying round of financing. I believe these terms have changed lately, but their original investment is probably closer to $150,000 these days. 500 startups ended up being the last push we needed to get the company of the ground.

9:14Their growth focused program consists of two weekly meetings with an entrepreneur in residents. The IRs are successful entrepreneurs or early employees of successful companies who have first-hand experience in companies at exactly this stage. There's also a weekly meeting with the growth council. That's not their name, but that's what they are, a team of four or five growth hackers that help you crack your head about growth tactics for your business. 500 startups expects their companies to come in with a few thousand dollars in revenue and to scale that exponentially during the program. A hockey stick chart is an expectation. Now our friends from head out, a company from India, came into the program with $30,000 or so in monthly revenue and got out with close to $100,000. That's just three months of incredible growth. On the other hand, their philosophy revolves around giving opportunities to unlikely entrepreneurs so that's foreign founders or women-led teams. There is no non-profit altruistic reasoning behind it. I think on the contrary, they believe that they can get more for their buck by investing

10:16in companies that might be overlooked by other firms and VCs. But it serves you well if you are in that group. Now, raising funding after the program ends is, once again, not a guarantee. 500 startups gets you good press and credibility, but in the end, it's up to you and your metrics. Now, looking at this chart, I have never been through a platinum-level program. But my perception for, say, 500 startups versus Y-combinator is that Y-combinator provides a much stronger brand name. It's a great degree to that. Access to a stronger network of investors. And then, since Y-combinator has accelerated so many successful companies, you are inevitably pre-filtered as you start getting into these meetings. By the number of applicants and acceptance rates, it is harder to get into Y-combinator and we're 500 startups than getting into Harvard. I rarely get to brag about that. Choosing the program that is right for you relates exactly to getting in. On a failed YouTube show we launched a couple years ago called Startups and Spirits, we asked Elizabeth in a former managing partner why we got in.

11:16So here's that video. Do you remember why we got in? Because we were so early, we were so lost. I do remember, so you guys were pretty early, but I think you had a decent number of users, but you were charging a certain amount and it wasn't from a revenue standpoint a whole lot. But one of the things that we are looking for in the application process, does the company understand who their target customer is and what could be the unit economics around this? What is it now and what do we think it could be? So it's not so much that we are looking for a hard and fast number and this is why it's so hard to say, oh, if you hit X, then you're in because that's certainly not the case. It really depends a lot on the vertical, but in your case for slide being, there's presentation software out there already. We already understand there's a market for it. We understand how much people are willing to pay for this and other companies and do we think that this is a great product, I can potentially disrupt that.

12:16And you had the user base to show that actually people really loved your product and that was more or less what we were looking for there. And the question is, for us, could we help this company if they came into the badge, could we help them say optimize their revenue? Like maybe it's just as simple as pricing changes or maybe it's as simple as what the value proposition is or what not. And actually, I think that proved out to be true. You guys have exploded since then and we had a couple of thoughts and then you guys ran with it. But that's the kind of thing we're looking for where we think if we have some little insight that we think we can help with and the team can just run with it, then that's like the magical situation. Oh, thanks. Thanks for accepting this, actually. He made the whole difference. We would be out of business if we hadn't been into 200. So that's your answer from the source. It's about finding the program that is right for your stage, knowing your numbers, knowing your unit economics, having some proof that the product is needed and very importantly, being able to tell that story for which you will need a pitch deck.

13:20We help companies with their pitch deck either with our self service and design platform. You can sign up for free using the link in the description or by getting involved in the writing and designing, which is done by me. Even though we have a team of 25 plus people, I like to get involved with these stories and help, I've been through it and raised capital and so on. So some more info on that on this URL. Now, let's move into the questions for this week. All right, so first question from Paul Thomasin. What is the rule of thumb traction ARR, and you're going to revenue, that a bootstrap SaaS company needs to have a fighting chance of doing a seed round of $1 million for 10% of the company. How important is for the ability compared to ARR? Thanks for the great content. You're very welcome. So you have to translate this to valuation, right? If you want to raise $1 million and give away 10% of your company, then that translates to a company valuation of around $10 million. What makes a company worth $10 million, right? In the traditional sense, that would mean that you're generating somewhere close to that amount of revenue.

14:21But in the start of the world, you might not need that much revenue. But what you do need is, I want to say at least $1 or $1.5 million for annual run rate SaaS company and prove that you're still growing, right? So that you not only got to $1 million, $1 million and a half dollars of ARR, but that you're continuing to grow at say $2.5 or $250 or $300 percent annually. I'm not making this up. There are a couple of logs. This episode is brought to you by Subaru. You know that place your mind always wanders to? The lake, the mountains, the homes of the people you love most. The completely redesigned 2026 Subaru Outback is built to help you get there. With legendary capability, standards and metrical all-wheel drive and the confidence to go further. The 2026 Subaru Outback. Love never looked so good. Visit Subaru.com slash Outback to learn more. You've been searching for the right foundation since forever.

15:22But now finally, you can find your match with Sephora. There's so many options from the best brands. You can pick the shade, coverage and finish that's just right for you. And don't worry, it's easy to find your match. With help from our expert beauty advisors and shape matching tools, plus free samples to take home and try. Visit Sephora in-store and online to find your match. Are your ad campaigns lighting up the dashboard? But not the pipeline. That's bullspin. The marketers are calling it out in dashboard confessions. My boss asks for results, so I open my dashboard for the only positive sounding metric I add. Impressions. Cut the bullspin. See revenue? Not just reach. LinkedIn delivers the highest return on ad spend of major ad networks. Advertise on LinkedIn. Spend $250 on your first campaign and get a $25 credit. Go to LinkedIn.com slash campaign. Turn sick editions apply. I commonly regularly read on how these valuations are working.

16:23I'm going to link them in the description and they're going to show up here. The team's going to have them. But yeah, I guess that those are bullpour figures. Next question from Duncan. How did you manage to keep track of your teams since they are not only one place? I wanted to figure out how viable it is to leave my team in Europe and maybe apply it for start of chilly for instance. That's a great question. I was not a big fan of remote teams up until recently. Mainly because I think that there is a replaceable value of collaborating inside the office. But in the last few months and years, I've softened up and I've seen how if you have the right team, if you have the right kind of people that are able to work remotely, then that might even work better. They're not wasting time in traffic. They're not wasting time getting to the office. They're happy because they can work chill at home. Not everybody works in that way. Some people need some more direct micro management supervision. That's not the way we work.

17:24We have the advantage of hiring people that are very proactive and very self-sufficient. It was easy to port them into a work from home environment or work from a completely separate location. It's just about hiring the right people to work in that sense. Not about worrying about how to manage them. You're not going to have time to manage them. On the other side of the world, on a different time zone. The last question by Jake Rageman, would you recommend taking an expensive growth hacking course to find a better product market fit? I would not recommend it. I mean, maybe. I think that growth hacking is something that you have to learn by doing. It's stuff. A lot of the stuff I know today about growth hacking is based on trial and error. Having the company, the product, and the budget to run experiments in which some experiments worked and some experiments didn't is what ended up making me a better growth hacker and a better marketer. I think that that's inevitable for everybody. You have to experience things for yourself and then see if this campaign and you once

18:28ran for X company applies to this other company. You remember a little bit of the unit economics of that campaign. The course might be useful. I can't really say yes or no. If it's expensive, I would say no. All of the stuff that I know about growth hacking I learned online for free, reading blogs and again, trial and error sort of thing. I think that you'd get much more value out of an internship with a great growth hacker than just paying for it. That's just my take. That's all we have questions for today. So remember, if you have more questions, shoot them in the comments and we'll try to answer them. We answer about three every week. We have the startup t-shirt thing. So if you want me to wear your startup company t-shirt on one of these videos, check the link in the description. Send us one of your t-shirt over. One of your t-shirts over. We'll send one back from Slidebean as a nice exchange. But then I'll wear it and talk about your company in the next video. We have some lined up already. All right. That's all for today. See you next week.

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