The Accelerator Conundrum: Equity Preservation

Let’s address what is, perhaps, the single most critical advantage of a model like 1Mby1M over the traditional accelerator: equity preservation. 

In the world of startups, your equity is your wealth, your control, and your ultimate payoff. 

Yet, the prevailing equity-driven accelerator model demands that you surrender a significant slice of this precious asset at the very outset, often for a meager sum and unproven promises. 

This is a fundamental misstep for many entrepreneurs serious about building lasting value for themselves.

Think about it this way: every percentage point you give away early on is a percentage point less that you own when your company truly succeeds. 

If your startup is fortunate enough to raise significant capital, that initial 5-10% accelerator dilution, compounded by subsequent funding rounds, can leave founders with a shockingly small fraction of the company they poured their lives into creating. 

You become an employee in your own venture, rather than a primary beneficiary of its success.

And if your exit is small (96% of exits are sub $100M), equity dilution could leave you with staggeringly small returns.

The 1Mby1M model, by contrast, operates on a lean, bootstrap-first philosophy that inherently champions equity preservation. 

Why give away a piece of your company for generalized advice or a small check when you can access world-class guidance, a vibrant community, and strategic insights without diluting your ownership? 

By focusing on organic growth and minimizing reliance on external capital, entrepreneurs retain a much larger stake in their companies, ensuring that when the value is created, they are the ones who benefit most significantly. 

No, Accelerator is not synonymous with a 3-month sprint in exchange of equity.

There is also the 1Mby1M way.

Photo Credit: Bruce Emmerling from Pixabay

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