In general, startup accelerator programs have extremely tight operating budgets. After all, a program’s goal is typically not to make money from running the program itself, but from the increased value of the participating companies. When you start tossing in costs like accelerator staff, event space to run your program, and travel, things can quickly add up. While it is certainly possible to run programs on a shoestring budget, a little extra operating cash can have a big impact. This is where sponsors and corporate partners come into play.
Speaking candidly, this is a bit of an oil and water scenario. You’re trying to build and support small early-stage companies. Yet you have to do some pandering to these big slow-moving corporations who might consider sponsoring your program. But here’s the thing! They also need you! They need you both for marketing themselves to the startup community and in some cases selling their services directly to startups. It’s a mostly symbiotic relationship and something you’ll have to manage as a program director.
First, it’s good to know that almost no-one is going to want to sponsor your very first program. That’s because there are many accelerators programs out there, with new ones popping up all the time. So the parties most likely to sponsor a program are probably already involved with one, or several programs. Additionally, as a new program, you don’t have much track record to show. Sponsors often like to see operations running for a few batches, and the beginning of an alumni network. When starting out it’s recommended to go for quick wins with smaller corporations, saving the really big fish for when you’re more established. That might also mean much smaller sponsorships but it’s a starting point and a chance to build a larger relationship. In terms of the price range, many of my newly established programs had sponsors only offering $2500-$5000. We took the money, and it allowed us to get to know the corporations and prove our value. Landing a really big corporate partner for your program can be a multi-year effort. But don’t get discouraged, if you build a solid program and manage to run several cohorts, partners will start knocking on your door. Many established accelerator programs now command large sponsor levels as high as $500K annually and more.
When it comes down to the different types of partners there’s really only two. Let’s take a look at each of them:
If your accelerator program is hyper-specific to a certain industry or technology, this will likely be your main sponsor. They are often a long-established leader in their respective industry. For example, if you’re building a program focused on maritime and ocean startups you would be targeting every large shipping company out there. If you were doing a FinTech accelerator you would be in discussions with banks and financial players. Your best bet with this type is to engage with industry powerhouses who are not already involved in another program. An effective pitch here is to show them a path to learning a lot more about new technology, trends in their industry, and getting access to talented founders they may want to hire or acquire at a later time.
Here’s a rather large category of potential sponsors for a program. This includes the likes of Amazon, Price Waterhouse Cooper, law firms, and so on. For them, their main goal in sponsoring a program is to sell their own services to the startups, at least the ones that get funding and can afford them. They may also do the sponsorship for some branding into the startup ecosystem as well.
In terms of how you structure the sponsorship, most programs offer some type of ‘Gold, Silver, Bronze’ approach, or other multi-level offerings. How you structure these levels is really up to you. The industry focus and the tenure of your program will also be a factor in determining what you can ask of your sponsors. I would, however, recommend trying to land one large or a marquee sponsor, and getting them to sign up for an annual commitment with you. This may take some time and much effort, but in the end it’ll be much easier for you to focus on keeping one large sponsor happy, instead of many, many smaller ones.
Sample Sponsor – Levels and Offerings
- Logo featured first and most prominently on the website
- Sponsor’s name featured in the accelerator program brand name (Powered by Your Corporate Name)
- Host (1) sponsored session/workshop during the program
- (5) Social media shoutouts during the program (Tweets and Facebook posts thanking you for your support)
- (10) Tickets to Demo Day
- A booth at Demo Day to showcase your brand or product(s)
- Your logo featured at Demo Day (large) with rollups
- Logo featured on the website
- (2) Social media shoutouts during the program (Tweets and Facebook posts thanking you for your support)
- Your staff can attend (2) accelerator program workshops or sessions of interest
- (5) Tickets to Demo Day
- Your logo featured at Demo Day (small)
- Logo featured on the website
- (1) Social media shoutouts during the program (Tweets and Facebook posts thanking you for your support)
- (2) Tickets to Demo Day
There’s also another type of startup accelerator sponsorship in the form of in-kind services. In the business, we sometimes call these perks. While these don’t usually put money in your operating budget, they do generate a lot of value for the startups in your programs. More specifically these are free credits and services from companies that startups typically need. An example of this is Amazon Web Services (AWS) cloud computing credits. They can also include other things such as lawyer hours, free software, or access to premium paid products at a discounted rate. Companies are smart to offer these cheap/free credits as a way to create lock-in with the startups in your program. They know once a startup has built on its services or platform it’s hard for them to move even if/when they scale up. It’s a sneaky but effective approach and as a program director, you’ll want to forge relationships with many of these providers.
With the in-kind sponsors, there is one industry that is perhaps the most active with accelerator programs. That would be the cloud computing platforms. More specifically, the ones from Amazon Web Services, Microsoft Azure and Google Cloud. It makes sense – almost all startups need these cloud services and all these tech giants are eager to gain more market dominance. For the time being Amazon is the leader and one of the most active sponsors of accelerator programs. You can find them offering $50,000 or more in free cloud credits to programs throughout the world. From experience, I can tell you they are a great partner. Also from experience, I can tell you, much like Amazon as a whole, they are extremely data-driven. To keep them as a happy and active sponsor it’s important to show them that a large portion of your startups both activate and use the free credits offered.