Why startup accelerators are needed: experience of Russian projects in the IIDF program
In one of the previous articles on our blog, we already looked at the difference between startup accelerators or incubators. In short, it consists in the timing and format of project support (usually start-up teams need to temporarily move to an office or coworking rented for them), areas of application (accelerators are more interested in Internet projects), the stage of the project and the share that needs to be given. Teams that need to scale up a working business more often come to accelerators, and the share that the accelerator takes rarely exceeds 5-7%, which leaves entrepreneurs room for maneuver when communicating with future investors.
Today we would like to talk about the experience of passing the IIDF acceleration program by some Russian startups - under the cut are the history of errors, surprises, change of strategies and real results in numbers.
Why IIDF Accelerator
Despite the fact that the Internet Initiatives Development Fund is the largest player in the venture capital market in Europe and provides start-ups with significant investments (up to 270 million rubles), the value of the acceleration program launched within the framework of the fund is not only in money.
The main advantage of the accelerator is the possibility of “accelerating time” - with the help of expert advice, access to a wide database of contacts and a well-developed program, entrepreneurs develop the project much more intensively, achieving the results planned for the year ahead, for three months.
As mentioned above, the task of the accelerator is to debug business processes and scale the business, that is, creating a reserve for the further development of the project and attracting large investments. According to statistics, about a third (27%) of IIDF accelerator graduates attract investments in the amount of 5 to 30 million rubles.
Examples of improving the performance of Russian startups
An example of such an acceleration is the reporting service “First Online Accounting” . The startup team developed it for two years, and then spent three months in the IIDF accelerator.
If during the independent development of the business, entrepreneurs managed to get 42 contacts of potential customers, achieve 12 demonstrations and get 19 paying customers, then after passing the acceleration program all the indicators increased significantly - the number of demonstrations was 129, the contact base expanded to 9328 leads, and in the list of paying Customers have 22 new entries.
Another startup that has managed to improve its performance is a project for pet lovers Pets Ferma. Before getting into the accelerator, the company's sales did not exceed 4,000 rubles, after passing through a three-month program, this amount increased to 460,000 thousand per month.
Company UNIM Histology provides accurate, rapid and remote diagnosis of cancer. The company allows the patient from anywhere in Russia to conduct research in the best laboratory of the Russian Federation as soon as possible, without having to go anywhere. After three months in the accelerator, the project team managed to lower the cost of attracting a paying user (CAC) from 1,666.6 rubles to 623.4 rubles and increase the average income from such a user (ARPPU) from 2,305 rubles. to 2850. The total revenue of the project increased from 76,000 rubles per month to 340,000 per month.
What teams take the accelerator IIDF
All startup accelerators and incubators have certain conditions that must be met by projects applying for support. To get into the accelerator IIDF also need to meet some criteria:
- The team must have at least two people who are ready to work in coworking in fulltime 24/7;
- The most interesting topics of the projects include Internet services, mobile start-ups, Internet of things and Big Data (once we were offered to invest in a pig-breeding complex in Belarus - this is interesting, but we are not experts in pig farms);
- Availability of a ready-made prototype of the product, which you can start selling to users;
- It is also highly desirable to have the first paying customers attracted by the founders of the project on their own;
- The goal of any startup is to become a large company, therefore we are interested in projects with an annual turnover potential exceeding $ 10 million over a four-year period.
Selected projects must spend three months at the IIDF site - moving the team to Moscow at this time is mandatory for participants in the full-time accelerator, which assumes further investment in the startup (for projects that do not fall into it, there is a special correspondence accelerator - we will tell you more about it in one of the following topics).
Plus, companies can receive both a one-time cash grant, as well as a grant by services from Microsoft Corporation within the framework of the BizSpark program (software development and testing tools, access to Azure for $ 9,000 thousand per year, access to the application store, etc.). The best startups can rely on a cloud grant from the corporation in the amount of $ 60 thousand per year, as well as receiving closed technological consultations on the project.
The fund is ready to invest 1.4 million rubles, of which 800 thousand will make direct investments in the project, and an additional 600 thousand will be spent on the costs of the acceleration program. The IIDF's share in the business will be 7%. In addition, if you pass the selection, but for one reason or another are not ready to give a share in your startup, you will have the opportunity to pay for the acceleration yourself .
What the startup really gets in the accelerator
Passing the acceleration program helps the team of a young company to understand "what needs to be done" to achieve success. IIDF experts constantly monitor the success of each project, offering their advice and recommendations on building business processes (testing sales channels, building user support, product tactics, etc.).
Around the activities of global startup accelerators, certain stereotypes have already developed, some of which may adversely affect the future of specific projects. Lastly, dispel some of these myths.
One of the most widespread is the belief that only completely beginning projects are accepted into the accelerator - this is by no means the case, the main thing is not that the project has just started, but its quality and prospects.
For example, the services 2do2go (a poster of Moscow events) and SmartFood (organizing a healthy diet) before the start of the acceleration program had a turnover of about 1 million rubles, the number of active monthly users (MAU) of the social network project for talented iFamous people exceeded 400 thousand, and the application for learning EnglishEasy Ten has also been downloaded over 400 thousand times.
It is also believed that accelerators help not just new companies, but young entrepreneurs - this is also not true: if a new company was founded by an experienced “bison” from a business, it also has every chance of getting support.
Among the founders of the projects undergoing the IIDF acceleration program, there are several serial entrepreneurs who have launched 3-5 or more successful businesses - some of these companies bring their creators more than 500 million rubles a year.
An interesting fact - the average age of the founders of accelerator companies is approaching 30 years (there are founders and older than 40 years) - everyone has a chance.
Attention! Until October 20, applications continue to be accepted during the next set of projects for the IIDF accelerator. Waiting for yourapplications !
You can learn more about our accelerator from a special presentation: