Here are some of the key things that we’ve learnt from the first iteration of Idea Alive and what we will do differently in version 2.0.
1. Entrepreneur led – not ‘business advisor’ led
There is a vast difference between entrepreneurs who’ve been there, done that, got the T shirt – and those who have (usefully) advised companies along the way.
Equally, if your startup is building a piece of IP or brand or software, then it is unlikely that an accountant who set up his own practice will experience the same kind of roller-coaster startup experience.
>> Idea Alive 2.0 will be led by entrepreneurs who have built and sold (or closed) multi-million pound businesses.
2. Business Angels need to be involved from day one
Many accelerators operate on the basis that business angels can attend the weekly programme but that they really get interested in the big pitch at the end of the accelerator.
We’re not convinced that this is the best path.
Instead, we are linning up a panel of five wise men (or women) each of whom will commit to invest a micro amounts into at least one business.
In other words, entrepreneurs can be sure that there are real investors, who have made a commitment to work with the accelerator to find and make investments.
This early stage involvement also allows the business angel to influence how the company is structured – in some cases, so that there is a single investor, but in all cases to ensure the business is Seed EIS compliant.
>> Idea Alive 2.0 will be led by five wise men (or women) who will take part an active part in the programme.
3. Business Angels need to be of the ‘sleeves rolled up’ type
Not all business angels are the same – as this Business Angel article illustrates.
The kind of business angel that will get the most out of an accelerator programme such as Idea Alive is the kind of angel that wants to play an active part on the board of his or her investments. These are not the distant ‘invest and walk away’ type of angels, but those that want to play a key role in helping to form and lift the early stage business.
>> Idea Alive 2.0 – we will select our business angels by those that actively want to get involved.
4. A part-time course works best
Idea Alive 1.0 pioneered a part-time programme. We’ve found it has worked extremely well. However, we will make improvements for our next version 2.0.
The part-time programme has worked particularly well in allowing us to develop deep connections within the Manchester/ Liverpool and NW region.
This structure has also allowed freelancers and small business owners an opportunity to develop a high growth startup.
However, for our next programme, we will split the 10 week programme into two parts – the first five weeks will focus on building the team – and the second five weeks will focus on developing and proving the business model.
In between, we’ll take a 5 week break – to allow time to build or develop early stage prototypes, customer development models or resolve key gaps in the team.
Running a part-time programme allows us to spread the programme over a greater period and therefore deliver additional growth and support for the startup teams.
>> Idea Alive 2.0 will keep the part-time / one day or evening per week approach – but will include a break in the middle to allow time to get out of the ‘class room’ and build / develop product and customers.
5. A 10 or 13 week programme isn’t enough
However, a 10 week or 13 week programme isn’t enough. The startups we’ve launched still need help and support after the programme has ended. Just because a child can run and feed himself (say a 5 year old?) doesn’t mean the child is ready to live alone.
So, we’re developing the post-accelerator graduate support programme to ensure that our startup businesses continue to get the support and guidance that they need post-programme.
The business angel investor will be a key part of this team, but the accelerator can use its connections and the experience of other entrepreneurs to speed up business growth.
We stick by our view that the Idea Alive startup accelerator can achieve 2 years of growth in 10 weeks – but we have found that extending the support beyond the programme is of significant benefit to the startups.
>> Idea Alive 2.0 will have a graduation programme. Those businesses which graduate will be offered an on-going support programme and later, invited to join the exclusive Idea Alive Graduate Group.
6. Focus on the revenue – not the equity value
Lastly, we’re based in North West England, not Silicon Valley nor next to Harvard in Boston. We’re not on Silicon Roundabout in London’s east end. Hence, we’ll do it differently.
Instead of focussing on the equity value of the startups, we’ll look for businesses that can demonstrate a route to revenue. After all, that is what our business angels are looking for.
>> Idea Alive 2.0 will not take an equity stake in the businesses, but instead, use a fee based method for successful businesses. We will maintain the ‘no up-front fee’ structure for entrepreneurs. We will operate as a book publisher or music label – helping groups and talent individuals achieve their goals. We won’t try to create a VC industry in the NW of England.