For the past few years corporate accelerators have been viewed as a way to help young entrepreneurs get their start in the corporate world, and for many, this is just what they did. However, along with helping the young start-up, the corporations found that they would benefit from time, money, and effort that were expended on these young people. As expected, the corporations found that the accelerator brought forth a group of highly trained and disciplined work force that could add to the corporate ranks. Needless to say, corporations jumped on this idea and benefitted from the corporate accelerators.
An accelerator program often has a rental or lease component with it for the startup to enjoy space to perfect the company. However, when the leases were looked at realistically, these offered little to help the start up and much to help the corporation hosting the startup. For example, in New York, the average cost of low rent corporate space is about $12 per square foot. However under the guise of a corporate accelerator the contracted lease space rents to the start up for around $27 per square foot for a three to five-year lease.
The ability of the startup to receive and accept bids is often tied to the corporation also in that the bids must be reviewed by a governing body and of course cannot be a competitor of the corporate accelerator. Therefore this ensures that the corporate accelerator will have the first and foremost products of the startup and it will never reach the market for a competitor to benefit. If the startup is successful in obtaining a contract, the corporate host tends to benefit anywhere from 5{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616} of the revenue to well over 25{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616}.
It is necessary for the startup to weigh the benefits versus the cost of a corporate accelerator program. Obviously, the corporation is in it to make money but there are some gains that can be made for the startup that might not be had on their own. One great advantage is the networking and exposure that the corporate accelerator offers to the startup. Being able to be a part of the mix and day to day activities surrounding a thriving business offers the entrepreneurs a chance to mix and hone business social skills while learning from the best in the business.
Another advantage is that the young entrepreneurs are often offered positions in the corporation. While this might mean leaving the startup the opportunity with the corporation might be substantial enough to warrant this move. Often the startup is not going to be successful, so the opportunity to receive gainful employment is attractive.
So to answer the question asked in the title as to who benefits in an accelerator, the conclusion is that both sides benefit. Each side must know what the obligations are and by going into an accelerator program with eyes wide open, each side is positioned to benefit from the arrangement.
