How Do Accelerators Make Money?

How Do Accelerators Make Money?

1 Answer

  1. Hi Aakash, there are various ways by which an accelerator can make money. Although there major source of earning is in their key investment which are startups.
    Basically, what an accelerator does is buy stake in the startup company by investing in them or funding them initially, and when this startup gets successful (which may not always happen but that’s the risk worth taking) then they resell their stake for a higher price. This happens when when one of their graduates (startups that successfully went through an accelerator program) either gets acquired or goes through an IPO.
    There are a couple of other methods through which an accelerator can generate revenue. For instance, through sponsorships. Many accelerators get large corporates to cover their major operational costs. For instance, venues, food, events, guest speakers, demo-days, etc.

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