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Startup accelerators are going virtual in response to the coronavirus pandemic

The Ewing Marion Kauffman Foundation (2020) offers a clear and succinct definition: “Accelerators are entrepreneurship support programs primarily aimed at helping participating startups scale-up and access early customers.” They are cohort-based, fixed-term programs — typically 3 to 12 months — that offer intensive mentoring, training, networking, and workspace for early-stage, growth-driven companies. Their intent is to increase the growth rate of a company by condensing two years of business building into a few months’ time. A common feature is assistance with investment fundraising in exchange for an equity position.

Being organizationally diverse, accelerators can be publicly or privately funded, focus on different types of entrepreneurs, industries, and business activities, and look for unique applicant characteristics in their selection process, which is highly competitive. Others are corporate accelerators that are sponsored by large companies (e.g., Barclays, Disney, Microsoft, Sprint). Being chosen to be part of an accelerator translates into real-time recognition, which is valuable to entrepreneurs. Graduation often takes the form of a “demo day” event, with startup owners delivering their pitch deck to an audience of angel investors, venture capitalists, media representatives, and other stakeholders.

Startup accelerators are invaluable resources for entrepreneurs, but the COVID-19 plot twist is causing them to rethink their operations and create new virtual programs.

A Brief History

Accelerators came on the scene in the mid-2000s. Some of the earliest and better-known accelerators include Y Combinator (2005), Techstars (2006), Seedcamp (2007), Tech Wildcatters (2009), Startupbootcamp (2010), and SOSV’s six programs — Chinaccelerator (2010), HAX Accelerator (2011), MOX (2012), Indiebio (2014), Rebelbio (2014),^[1] and Food-X (2014).

The startup accelerator concept evolved and spread rapidly in the U.S., then Europe, and throughout the globe. In 2016, the Gust Global Accelerator Report informed readers that $206,740,005 had been invested worldwide in 11,305 startups by 579 accelerator programs in 68 countries. Varying widely in their design features, the popularity of accelerators has been fueled by technological advances, the rapid rise of entrepreneurship, and value propositions that attract a number of stakeholders in the startup ecosystem.

Included in the 2018 Seed Accelerator Rankings are pioneers like Y Combinator and Techstars, along with newer startup accelerators such as AngelPad, The Alchemist Accelerator, Amplify LA, Chicago New Venture Challenge, MuckerLab, StartX, and others.

Accelerator Impact

Research indicates the jury is still out in terms of measuring the overall impact of accelerators. It is not clear whether startup firms attract more investment than they would if they had not participated in an accelerator program (Cohen, Feder, Hochberg, & Murray, 2019). There is stronger evidence that startups participating in accelerators have an increased likelihood of being acquired, quitting, or receiving follow-on venture capital financing (Smith & Hannigan, 2015). Accelerator startups have also been found to achieve better long-term outcomes in terms of funding, web traffic and employee growth, in comparison to similar “almost-accepted” program applicants (Hallen, Cohen & Bingham, 2019).

What appears to be particularly valuable to startup owners are the close relationships developed between themselves and other program peers. This typically means spending time on-site with other like-minded professionals. But the advent of COVID-19 and related stay-at-home orders has made these trying times anything but typical. To adjust, startup accelerators are pivoting to recovery strategies, remote meetings with mentors, and posting virtual pitches online.

COVID-19 Response

Outlined below are several examples of how startup accelerators have evolved in response to the COVID-19 crisis.

CDL Recovery: Rapid Response Innovation Program

The Creative Destruction Lab (CDL), operating five sites in Canada, one in the U.S., and two in Europe, has launched a global program — the CDL Recovery Program. CDL Recovery focuses on information-based solutions to accelerate the world’s recovery from the COVID-19 pandemic. Examples include, but are not limited to: (1) swab-based tests that predict whether the coronavirus is present in an individual; (2) contact tracing; (3) image analysis of people density or proximity; (4) symptom monitoring; and (5) workplace monitoring of air or sewage.

Applicant competition is open to startups, corporations, informal collaborations, social inventors, social impact ventures, and not-for-profit initiatives. There are no fees for participation and CDL does not take an equity position.

IgnitedX COVID-19 Response Accelerator

Kansas City’s newest startup is IgnitedX COVID-19 Response Accelerator, the brainchild of Black & Veatch and LaunchKC. The virtual accelerator will commit a minimum of $250,000 in grants or in-kind services to startups dealing with testing and screening technologies, disease-tracking software, and emergency medical facilities to assist with relief efforts during the COVID-19 pandemic. It will also explore other solutions to COVID-19 problems, such as remote collaboration software and tools, biotech-related services, supply chain solutions, and modular communications (like providing Wi-Fi kiosks in underserved communities).

IgniteX COVID-19 Response Accelerator builds upon the Black & Veatch Cleantech Accelerator, which selected seven startups for its program last year. The B&V Cleantech Accelerator focuses on tech solutions for the engineering industry and is part of the LaunchKC umbrella of programs.

Microsoft Global Social Entrepreneurship Program

In response to the COVID-19 crisis, applications are being accepted for the Microsoft Global Social Entrepreneurship Program. Available in 140 countries, the program provides a mix of technical and business support with grant funding to help startup entrepreneurs advance innovative solutions in healthcare, sustainability, and accessibility. Qualified startups receive access to free Microsoft cloud technologies and up to $120,000 in Azure credits. A dedicated program manager helps startups market and sell their solutions, as well as to potential customers, including leading enterprises and nongovernmental organizations.

Plug and Play COVID-19 Accelerator

Plug and Play has launched a global COVID-19 Accelerator that is dedicated to scaling the world’s most promising startups that can help address the coronavirus pandemic. According to their website, the program focuses on existing technologies that can achieve massive scale across six tracks: healthcare, enterprise, retail, finance, travel, and supply chain.

Plug and Play acknowledges that the coronavirus has disrupted global supply chains and business models, which in turn has transformed the nature of work and placed unprecedented pressure on health systems and public institutions. As a catalyst for adaptation and innovation, the COVID-19 Accelerator will connect leading corporations, governments, non-profit organizations, and investors with Plug and Play’s ecosystem of 20,000 startups, with technologies ranging from computer vision and diagnostics, cybertech and collaboration tools, blockchain and automation — with the intent to flatten the curve and build the capabilities necessary to thrive in the new normal.

Qualcomm Small Business Accelerator Program

Qualcomm has unveiled the Qualcomm® Small Business Accelerator Program, which is designed to help small businesses transition to a mobile-first work environment using its connected technologies. The comprehensive program will provide support for small businesses across various industries, so they can continue to maintain operations throughout the current global pandemic and beyond.

The Qualcomm Small Business Accelerator Program, Qualcomm Technologies and its ecosystem partners — Best Buy Business™ (technical support), Citrix® (digital workspace solutions, Lenovo™ (5G-enabled PCs), Linksys® (Wi-Fi networking devices), Samsung (PCs and mobile devices), Sophos (security software solutions), and Targus® (mobile docking stations) — will select 25 small businesses to receive products and technical support valued at up to $25,000. Customized to the needs of the selected businesses, the program will infuse a variety of devices powered by various computer and connectivity solutions from Qualcomm Technologies, such as Always-Connected PCs (cellular-connected laptops), Wi-Fi systems, mobile phones, Bluetooth enabled headsets and active mobile hotspots, and technical support from other key partners. With more businesses depending on cloud-based solutions, these connected products offer enhanced productivity and security for small businesses.

UTSA COVID-19 Business Recovery Accelerator

The University of Texas at San Antonio (UTSA) Institute for Economic Development launched the Small Business Development Center COVID-19 Business Recovery Accelerator (COBRA) to help small businesses weather the financial hardships caused by the coronavirus pandemic. COBRA is billed as the only recovery accelerator of its kind in Texas to help stabilize and rebuild the small business economy.

COBRA will serve as a single “front door” to help small businesses in Bexar County and 10 surrounding counties with access relief, recovery, rebooting, and resilience resources. The Business Recovery Accelerator will help participating businesses navigate federal funding opportunities, provide confidential, no-cost consulting in finance, human resources, operations, marketing, and business and strategic planning with the goal of winning back and finding new customers.

To make South Texas’ economy more resilient, COBRA will also help small businesses scale up their operations and become more competitive through importing and exporting, contracting, market research, technology commercialization and emergency preparedness.

COVID-19 is changing the way we live and how businesses operate. For those who work in the digital world — startup accelerators are decidedly tech-centric — innovative efforts are underway to help ease the pain. Thanks to technology, accelerator founders and startup entrepreneurs are able to advance, while maintaining access to funding, networking, and potential investors.

Editor’s Note: ^[1] Rebelbio has since merged with SOSV’s Indiebio brand in New York City.

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Economic development organizations (EDOs) are pivoting to digital technologies as the centerpiece of their disaster response to the COVID-19 crisis. The coronavirus pandemic has had a devastating impact on small businesses and workers. EDO’s are making a concerted effort to make real-time data publicly available, and help businesses navigate the complexity of COVID-19 relief and recovery efforts.

Business Resources

The most prominent digital response is the creation of EDO website pages that provide accurate and timely information on COVID-19 resources. Typically displayed are links to CARES Act funding, application assistance, and other financial resources. EDOs are pushing to get federal dollars in the hands of local businesses impacted by official stay-at-home orders, and the employees that work for them.

EDO COVID-19 resource pages are also designed to help businesses reopen (personal protective equipment, social distancing), stay open, operate safely, and build community support. The pages serve as a crisis information hub — a collection of finance, buy local campaign, charitable donation, testimonial, online education offering, and public health dashboards.

COVID-19 GIS Mapping Tool

Last month, GIS Planning released a free, interactive GIS data tool to map the spread and impact of COVID-19 for U.S. economic developers. The data tool is a customized version of the company’s Mapping Intelligence Component, displaying national and county-level data for the coronavirus alongside Chmura’s Economic Vulnerability Index. EDOs and chambers of commerce across the U.S. are invited to post the free tool on their websites. This allows them to get interactive, mobile-responsive data to their regional stakeholders. The COVID-19 data comes from The New York Times and is updated daily.

Restore Your Economy

RestoreYourEconomy provides up-to-date information on COVID-19 and its economic impacts. The website is managed by the International Economic Development Council (IEDC) with support from the U.S. Economic Development Administration (EDA) and IEDC’s Economic Development Research Partners program.

The website offers a host of digital material on COVID-19 topics: IEDC research, reopening the economy (by industry), financial programs, insights and guidance from economic development professionals, business and worker assistance, member surveys, crisis communication management, and webinars. EDOs also have access to COVID-19 survey and website templates that can be customized.

RestoreYourEconomy is an excellent source for sharing best practice information with public and private stakeholders who are looking to rebuild their economy.

SizeUp

SizeUp is a Fintech Internet service company dedicated to providing powerful business intelligence. They are taking a lead role in working with EDOs to better serve local small businesses and entrepreneurs with their digital software products.

During the months of March and April, SizeUp completely waived the setup fees to have their SizeUp Local Business Intelligence (LBI) product added to EDO websites. This allows local businesses to access SizeUp LBI for free directly from the EDO website.

EDOs taking advantage of this opportunity include the Greater Sacramento Economic Council, Maricopa, Town of Gilbert, and Arizona Public Service. Local businesses utilizing the SizeUp LBI product are able to benchmark performance, identify customers and suppliers, and find the best places to invest their advertising budget.

SizeUp also makes articles and white papers available for download. This includes Coronavirus Economic Development Case Studies and National Survey Results, a report that provides case study examples of how economic developers and policy makers are taking action in response to the COVID-19 crisis. Each initiative is intended to mitigate the devastating economic impacts of state lockdowns and stay-at-home orders on workers, families, and businesses. Featured sections in the document focus on transition work, online local business and entrepreneur assistance, engaging commercial property owners, corporate site selection, social distancing bingo, fashion and sports repurpose manufacturing, utility companies creating their own stimulus, swapping companies temporarily, the business of food, and tech industry partnership.

Business Attraction and Site Selection

Site Selection After COVID-19: Predictions From the Experts, a recent survey conducted by the Site Selectors Guild, an association of the world’s foremost professional site location consultants, in partnership with Development Counsellors International (DCI), provides insights on how COVID-19 impacts corporate location strategy.

Survey findings indicate that 52 percent of companies interviewed are pausing site selection projects, and 45 percent are moving forward with projects. Those surveyed also predict there will be a shift in global manufacturing and supply chain strategy, an uptick in on-shoring to North America, an increase in remote work that will shrink the demand for office real estate, and forsees the emergence of life sciences, logistics, and advanced manufacturing as “hot” industry clusters. Survey respondents encouraged EDOs to prioritize helping displaced workers find employment, closely followed by talent/workforce attraction initiatives. EDOs were also advised to keep up the communication with companies and site selection consultants.

ZoomProspector

Due to COVID-19 causing massive disruptions — cancelled executours, postponed familiarization tours, government travel restrictions, investors pausing to reconsider their strategic footprint — site selection consultants have been unable to undertake personal site visits to local communities. Until the pandemic subsides, EDOs are facilitating virtual site selection by showcasing properties with GIS Planning’s ZoomProspector. This digital tool gives site selection consultants the ability to access information on commercial and industrial sites, directly on EDO websites. Consultants are able to research and analyze properties and communities, collecting data on demographics, workforce, GIS, business/industry, education, and wages from the comfort of their office. Personal site visits will eventually resume, but prior to those occurring, EDOs capable of using technology to stay connected will have a competitive advantage.

Zoom

Because of COVID-19 social distancing requirements, EDOs are utilizing Zoom digital conferencing software to meet and work together. Zoom conferencing software helps people maintain human connections, irrespective of geographic location. EDOs are finding value in cost-effective, modern communications that cover video, audio, web, and chat, and easily scales to their needs.

Editor’s Note: To avoid “Zoombombing,” users need to be careful about sharing meeting links publicly. Instead of posting a meeting link to a Facebook group or in a promotional tweet, distribute information via a more private method, such as email. Meetings should be set to “private.” Be careful not to use your personal meeting ID. In its place, use a one-time meeting ID to make the meeting more secure.

COVID-19 has become an economic and health crisis like no other. The world is entering uncharted territory, but as the old saying goes, “Thinking will not overcome fear but action will” (Stone, 1962)

High performance economic development organizations are finding leadership opportunities in COVID-19. They are aligning expectations. They are focusing on strengths, successes, opportunities, and collaboration. They are providing accurate, real-time information. They are staying positive, and above all else, they are communicating, communicating, communicating.

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Category: Disaster Preparedness

EDOs Digital Response: COVID-19