Editor's Note: This post is by Hanan Lavy, Director of the Microsoft Accelerator for Windows Azure in Israel

In recent years we’ve witnessed a phenomenon of Startups Accelerators popping up in enormous numbers all around the world. Entrepreneurs looking for an accelerator to join immediately encounter endless offers with seemingly similar offers. In this post I’d like to discuss the different offers of accelerators and their fit to certain types of entrepreneurs and startups.

Let me start with a few words about accelerators in general and how they can help startups: Startups Accelerator is a few-month program (usually 3-4, but some are longer) that help startups develop their business network, market understanding and product offering. Some of them offer a small amount of money ($20K-$80K) too. Most of the accelerators offer office space to work from and additional services that a startup typically needs when it starts – legal, accounting, banking, bookkeeping, etc.

One of the most important values that accelerators offer are mentors – these are veteran people who “made it” in the past and are now helping the companies they mentor with their experience and business connections. The value of the mentors is a direct derivative of who they are (how senior and experienced they are) and how much time they can devote to the startups they mentor (those guys are usually very busy people…).

Assuming that the accelerators’ values are pretty obvious and clear, I’d like to touch on three main points that entrepreneurs should take into account when choosing an accelerator:

  1. The level of fit between what you’re trying to get from the accelerator and what the accelerator can give -
    Are you looking for synergy between startups working together? Business connections? Methodologies of better customers approach (customer development)? Product understanding? UI help? Technological breakthrough? According to these criteria, evaluate the strengths of the accelerator to make sure they fit your focus areas and needs. If you need strong connections to the market – make sure the body that stands behind the accelerator has these connections and is able to leverage them for you.
  2. Program intensiveness -
    Some accelerators are very structured, others have no program at all, and there is an entire spectrum in between. Not all programs fit all companies and entrepreneurs. Make sure your expectations are aligned with the program’s offering.
  3. Previous results -
    Ultimately, accelerators are measured according to what happened to the companies that graduated their program. Usually the benchmark is set around the percentage of companies that received an investment and the average investment sum. Both are measured in the time period of one year post graduation. Accelerators that are more than 5-6 years old are also measured by the number of “Exits” they produced.
    As an industry benchmark, Y-Combinator and Techstars are proud of having 75%-80% of their graduates receive investments, with an average of ~$1M, one year post-graduation.
    Be sure to check up on the success measures of the program you’re considering. Talking to startups that graduated the accelerator could be a great indication too, of course.

There are many other parameters to be taken into account – the amount of money a company gets when it enters an accelerator, what are the terms of this investment, the geographic location of the accelerator in the world, its brand-name, the network it represents and more.
Our own accelerator program in Israel, the Windows Azure Accelerator, opened its gates in April 2012. The first batch of 11 companies graduated in September and so far have enjoyed very strong results. Only 4 months post-graduation 82% of the companies had raised or were holding term-sheets with an average sum of more than $800K. Graduating startups felt they got great value from the program and actively helped us reach out to the second batch of startups that are now completing the program and graduating next week. Our 100+ mentors take an active part in this effort and have a big part in the program’s success.

These days we’re gearing up for the opening of our 3rd class due to begin this coming July. Building an accelerator program from scratch has been a learning experience for us all – staff, mentors and startups - and as we continue to improve and enhance our program, we’re sure this next round will be even better than before.

Got questions? Write to Hanan and his team at waa@microsoft.com
Want to learn more about the Microsoft Accelerator for Windows Azure? Visit the program's homepage here.
Want to submit your startup to the new class of the Microsoft Accelerator for Windows Azure in Israel? Click here to apply!