David Beisel
It’s early into the launch of our 100% virtual NextView Everyday Economy accelerator, but indications point to early success. First, we were pleasantly overwhelmed with submissions over the past few weeks since we opened up applications. The NextView team enjoyed reviewing the literally hundreds and hundreds(!) of teams’ online pitch decks and recorded videos, as well as loved the dozens of second-round video conversations which we had with Founders working on quite compelling startups. This initial wave of applicants resulted in the selection of six initial Accelerator participants – female & male founders at startups hailing from the Bay Area to Miami to Alabama to Boston, ranging from b2b SaaS offerings to consumer services… all transforming people’s everyday lives. Many of these Founders we wouldn’t have had an opportunity to connect with if we hadn’t launched this program. We’re excited that we’re currently kicking things off and will have more to publicly announce in the future.
However, in our conversations over the past few weeks with both Founder applicants and others in the ecosystem (like co-investors), it became apparent that some of the assumptions about what an accelerator is and how ours is different wasn’t fully appreciated from our original Accelerator blog post. As we’ve shared, we intentionally wanted to flip the traditional Accelerator model on its head and offer a unique offering for entrepreneurs at the earliest of stages. So in this blog post, we wanted to expand upon three aspects that aren’t typical to the usual Accelerator model.
The NextView Accelerator Doesn’t Operate in Strict Cohorts.
Most accelerators operate in class cohort “batches.” The need for this arrangement is partially for the synchronized culmination of the program towards a Demo Day (see next point) and the coordination of an operational machine designed to scale with more & more companies with each class. When the point of the program is a Demo Day show at the end, all of the participating companies need to be in lock-step. More importantly, as the accelerator is coordinating rounds of “mentor” meetings, cookie-cutter educational programming, social events, etc. all designed to scale, it requires a logistical effort with a rigid timeline.
The NextView Accelerator is different in that the experience is a bespoke hands-on effort with the senior leadership of the NextView partnership. Yes, there is opportunity to connect with other participants, both current and past, through online formats like a shared Slack group, virtual Zoom meetings, and “Lunch & Learns” with speakers. But the emphasis of our program is the direct one-on-one interaction with NextView partners to help push the company forward. These engagements don’t need to be constrained to a strict timetable. The result is that as of today our applications are (re-)opened indefinitely and applicant startups are considered on a rolling basis, but we’ll have a particular emphasis on early September 2020 the beginning of the next wave of participants.
The NextView Accelerator Doesn’t Have a “Demo Day,” but Instead Helps Founders Fundraise When Ready.
When the culmination of an accelerator is a Demo Day show, then that is what teams prepare for and the resulting metrics by which they’re measured. For the NextView Accelerator, the culmination of the program is results, both in terms of real business progress and in subsequent fundraising.
The partners at NextView hold sessions more than once per week to push the participants’ thinking and actions to strive towards making significant advances finding true-product market fit. And in the goal of further capitalizing the company for success, while a five minute Demo Day pitch is indeed helpful, it is only one portion of the entire fundraising process. We’re assisting in not only creating the fundraising narrative, but also navigating the process of which firms (and which partners at those firms) should be on the roadmap, and how to optimize the round dynamics. Unfortunately, there is a lot of “inside baseball” in the fundraising process which is opaque to Founders, and it is our job to shed a light in helping to navigate towards a successive fundraise coming out of the NextView Accelerator program. Our brand promise is that we will work with all accelerator companies to shape the underlying business, craft the fundraising pitch, and make introductions for new downstream investors until the company is subsequently financed. That process can take place immediately after the three-month structured program or anytime afterwards when the business is ready.
NextView Won’t Lead the Next Round in Accelerator Participants, But Will Always Follow-On in That Round.
The dynamics for participation in the next round’s fundraise syndicate is complex, and many accelerators (and VCs) obfuscate their intentions for self-serving interests. Our goal is to be as completely transparent as possible and to ensure an optimal round for all of our Accelerator participants.
The greatest risk for participants is that a VC “cherry picks” the one or two “best” & most promising companies (however they define or perceive it) in their accelerator program to proactively and preemptively lead the next round of financing so as to crowd out any potential competition and buy as much ownership as possible. This strategy works for that one winning company, but cripples the chances for fundraising success for the other companies coming out of the program at a similar time. Some prospective seed stage VCs may consider the remaining startups “passed over” and of lesser quality, when in reality great startups take time to mature and blossom.
In order to avoid these signaling issues for the participants graduating from the Everyday Economy Accelerator program, we pledge to both Founders and our Co-Investor VC partners to be uniformly consistent with how we treat subsequent rounds of financing.
- To Participating Founders: To avoid signaling issues, we intentionally will not lead the next round of financing. We will work alongside you to make introductions to peer VCs in order to create a competitive dynamic – finding the best-fit firm to lead your next round at the market-determined valuation which your company deserves. And to support you in that effort, you’re empowered to market the fact that we will write a check into that round which is our pro-rata share of the round. (The only situation where we will not do our pro-rata is if we encounter ethical red flags in our engagements with Founders, in which case we will not participate at all.)
- To Peer Co-Investor VCs: All of our NextView Accelerator participants will be looking for outside leads for their next round of financing coming out of the program. We proactively look to build friendly syndicates for our Seed investments, and welcome collaborating to build together. We will be transparent about all of the current companies which are part of the program for you to determine which may be the best fit with your firm’s strategy. Our intention is to invest our pro-rata share of the round for all startups which are able to successfully fundraise a subsequent Seed round of $1M or greater coming out of the program.
Because how our Accelerator works is different from many others, candidly, we debated internally at NextView about calling it something else. The above highlights some of those differences in a way that is an open communication to our collaborators within the ecosystem. However, we ultimately decided to keep the same Accelerator moniker, both so Founders and potential co-investors alike had a base orientation to what we’re doing. And more importantly, we believe that the core of the program is indeed to truly accelerate the trajectory of these early stage startups which we’re working in this structure.