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Using corporate accelerators to build out an innovation portfolio and create an experimental, entrepreneurial culture

For help navigating this playbook, take a look at our Guide to Business Playbooks

Accelerators act as companies or programs which invest in and support startups to promote fast growth of the ventures. They generally connect startup founders to additional networks and resources such as mentoring, knowledge, office space and any other avenues which can help accelerate growth.

For corporations, the accelerator is a new structure, acting as a valuable innovation and business building tool that is agile and fast-paced, like an experimental playground within the framework of an organisation. Within this new structure, new rules can be established to create an environment where ideas can flourish and grow, protected from the organisational structure and processes.

Strategy behind the Play:

The core idea of a corporate accelerator is to allow corporate and startup teams to establish mutually beneficial relationships and flows of information.

“If a corporate wants to innovate with startups, they need to establish themselves as a good actor in the startup ecosystem.” -- Suelin Chen, Co-Founder & CEO at Cake

The return horizon for accelerators generally depends on how the program is geared towards economic benefit. One way of achieving economic benefit for the organisation through the accelerator is investing in startups, building them, and producing financial returns through exits. In this case, the organisation is acting as an early-stage venture fund. Another way of achieving economic benefit is to integrate innovative technologies or business models into the organisation.

Key Benefits:

  • Create a place to interact with innovation, bridging the world of corporates and startups to integrate an experimental, risk-ready, entrepreneurial culture
  • Drive economic benefit
  • Transform the core business with ideas that move the company towards being an exponential organisation.

Limitations & Risks:

  • Corporate accelerators, and internally run programs can be a resource drain on otherwise well-oiled corporations.

Initiating the Play:

Launching this play requires a relatively high initial capital outlay.

Key steps to initiate:

  • Secure time and continuous support from management and leadership.
  • Select the right people for the accelerator who have an understanding of the organisational structures and concerns, as well as the needs of a startup. This team will also need to consider the operational setup of the accelerator along with the accelerator’s building blocks and how these impact the organisation.
  • Assess what financial resources the accelerator requires and what size of businesses the accelerator would need to build to move the needle of the company.

Running the Play:

Accelerators are a moderately resource intensive play.

Key tactics:

  • The selection process defines the methods of scouting startups. The targeted startups can range from ventures with only a business plan and no prototype or market traction, through to startups with a validated business model.
  • The deal marks the beginning of the relationship between the accelerator and the startups. A deal is not necessarily financial, it can entail money for equity, resources for equity, or a no-strings-attached non-equity model.
  • The acceleration program focuses on building the venture and making it investor ready. Tangible support like office facilities and IT infrastructure are provided, giving the startups the opportunity to concentrate on development and growth. Regular reporting, milestone meetings, and mentorship opportunities help evaluate the development of the startup and identify areas for improvement.
  • The accelerator usually closes out with a demo day, to create funding opportunities or find avenues for further cooperation.

Play Variants:

Typical variations of this play include:

  • Corporate Venture Capital
  • Early-stage Venture Fund

Related Plays:

  • Incubator
  • Innovation Lab
  • Hackathons
  • Shark Tank
  • Open Innovation

Key Considerations:

  • Establishing an accelerator model requires a precise strategic direction and clearly defined goals. This will allow it to become economically viable and sustainable within an organisation’s structure.
  • The organisation should understand that the process requires time and continuous learning concerning what works best for the organisation as well as the startups.
  • Providing the accelerator team with enough autonomy and shielding it from organisationalpolitics and processes allows the accelerator to adopt the speed and agility of startups

The core idea of a corporate accelerator is to allow corporate and startup teams to establish mutually beneficial relationships and flows of information.

Play in Action:

Powered by Techstars, the Barclays Accelerator is a 13-week programme run by a full-time, dedicated Techstarsteam. This unique partnership brings two networks together into one accelerator program that offers entrepreneurs in the fintech space unprecedented access not only to a world leading bank, but also to Techstarsinternational mentor and investor relationships. Barclays Accelerator startups get £12.5k of funding in return for giving up 6 percent equity, though it is the value of the Techstars mentoring and business development support, and the programme’s ties to Barclays, that’s intended to be its biggest draw. The programme culminates with a Barclays Executive Demo Day and a Public Investor Demo Day.

Techstars’ Jon Bradford says “There are good commercial reasons for doing this, including being around smart people and innovation from the startup community, business development and possible M&A/future investment/partnerships. But it is important to emphasise that all of the above is at the startups’ option and never Barclays.”

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