There is a lot of talk about how effective accelerators are at helping social entrepreneurs raise capital. (See GALI Report)
However, as any student at Santa Clara University will tell you, there is a big difference between showing up for class and acing the final exam. Similarly, just participating in an accelerator is not a reliable indicator of how much work you put into the program and thus not a good indicator of the accelerator’s impact on your ability to raise capital after the program. According to preliminary data at Miller Center, the amount of work that an entrepreneur puts in is correlated and may contribute to the amount of investment that an entrepreneur goes on to raise.
Social entrepreneurs participating in our accelerator program work through a series of deliverables that help explain and defend their business to potential investors. These deliverables range from creating a solid theory of change with measurable impact metrics to defining key strategic growth initiatives to producing defensible financial projections.
Given the demands of being a social entrepreneur in these difficult times, it is understandable and natural that not every entrepreneur in the Miller Center Accelerator will complete 100% of their programmatic deliverables, and our mentors are happy to create a customized path that addresses the most pressing needs for each and every individual enterprise.
However, we are starting to see that doing your homework does pay off.
An analysis of our alumni from the past four years shows a positive correlation between the percentage of deliverables an entrepreneur completes and the amount of investment they go on to raise.
Enterprises that really commit and finish 80–100% of their programmatic deliverables, on average, go on to raise one and a half times as much as those that complete between 50–80%. What’s more, they raise almost twice as much as enterprises that only finish 50% or fewer of the deliverables.
As always, correlation is not causation. And there are a number of potential explanations that may contribute to this effect, such as the hypothesis that more advanced and investable companies may have an easier time completing deliverables than those that are constantly putting out fires.
However, the correlation remains, suggesting that if you are an entrepreneur in an accelerator program, you should do your best to do your homework! It’s there for a reason and designed thoughtfully to make you attractive to investors.
At Miller Center, we are dedicated to supporting and adding value to all of our program participants, but we are also committed to identifying our “A” students who diligently complete the programmatic deliverables and demonstrate that they have scaleable, impactful, and investable businesses. By identifying these high-potential graduates and doubling down on them through our suite of alumni solutions, our investment facilitation programs, and Miller Center Invest, we hope to accelerate their growth and impact on the world.
Disclaimer. The author of this blog is notorious for not doing his own homework and is a B+ student at best. He writes this with full acknowledgment of the irony of him telling others to do their homework.
