The Accelerator Conundrum: Are Accelerator Success Rates Misleading?

The Accelerator Conundrum is a multipart series that challenges the prevailing wisdom of the tech startup ecosystem that entrepreneurs should Blitzscale out of the gate. Written by Sramana Mitra, the Founder and CEO of One Million by One Million (1Mby1M), the world’s first global virtual accelerator, it emphatically argues that a better strategy is to Bootstrap First, Raise Money Later, focus on customers, revenues and profits. 1Mby1M’s mission is to help a Million entrepreneurs reach a million dollars in annual revenue and beyond. Sramana’s Digital Mind AI Mentor virtually mentors entrepreneurs around the world in 57 languages. Try it out!

Let’s talk about “success.” Accelerators love to tout impressive-sounding statistics: “80% of our graduates raise follow-on funding!” “Our alumni are valued at $X billion!” But dig beneath the surface, and you’ll find these numbers are often misleading.

What does “follow-on funding” mean? 

Does it indicate a thriving, profitable business, or simply the ability to convince another VC to pour more money into a still-unproven venture? 

Valuation is another vanity metric. A high valuation on paper doesn’t equate to real-world revenue, sustainable growth, or a viable business model. 

Many of these “successful” startups are simply riding a wave of hype, burning through cash, and perpetually chasing the next round of funding.

The truth is, a tiny fraction of accelerator graduates achieve genuine, independent success. 

Most are either acquired for a pittance (a polite term for a failure), limp along as “zombies,” or quietly fade into oblivion. 

The accelerator model is designed to maximize the chances of a home run, not to guarantee the success of every participant. 

They’re playing a numbers game, and unfortunately, most entrepreneurs end up as mere data points in their self-serving narrative. 

Don’t be fooled by the glossy headlines. Demand deeper scrutiny of these so-called success stories.

Here are some sobering numbers of 3-month accelerator graduates:

• Dead: 15.2%
• Walking Dead: 68.7% (stagnant, unable to raise, merely sustaining)
• Failed (Dead + Walking Dead): 83.9%

These figures resonate with the broader startup failure rates: 

~75% of venture-backed startups still fail despite securing capital 

~90% of all startups eventually fail

Ask instead: How many sustainable businesses have been built?

Photo Credit: Sasin Tipchai from Pixabay

This segment is a part in the series : The Accelerator Conundrum