Favorable tax structures, startup-friendly demographics, great coworking spaces—Austin, Texas, might have it all, especially if you’re a new company looking to hit it big.
Austin catalyzes growth in companies and solopreneurs, as is demonstrated by the number of startups hailing from this city.
To get a startup off the ground, many entrepreneurs turn to accelerators and incubators to get the ball rolling.
Whether your startup is still in the scribbles-on-a-napkin phase or you’ve got a few years under your belt and are ready for the next step, use our list of the top 10 accelerators and incubators in Austin to find the right one for you.
What is an Accelerator?
An accelerator is usually a program specifically designed for startups to move them through the “acceleration” phase with mentorship, financing and other forms of support. Accelerators typically last around 3 or4 months, with businesses moving through these programs in a cohort of businesses or several other businesses receiving the same treatment.
There is a slight difference between an accelerator and an incubator. If your business conceived an idea and brought in an external team to manage or work on it, you are in an incubator.
Accelerators are critical when it comes to startup success. They help improve the outcomes of these companies causing the benefits to spill over to the wider community. The impact of accelerators varies depending on the program. Not all accelerators operate equally, and quality is at the core of accelerator programs.
Accelerators support a startup in its earliest stages with growth-driven support. Startups enter an accelerator program for a specific period of time and as part of a cohort of companies. The program itself is a process of rapid and intense education aimed at accelerating the life cycle of a young innovative company. What would have taken years to learn is compressed into a few months.
What makes accelerators unique?
- Fixed terms
- Founded on and driven by mentorship
- Cohort-based
- Culminate in a demo day or graduation
Incubators, seed-stage venture capitalists or angel investors differ from accelerators because none have all four elements collectively. An accelerator program is fixed and typically lasts 3to 12 months. The ingredients are mentoring, education and networking, An investment also is normally included. Anything without these features is not an accelerator.
On the other hand, an incubator is a building where rent is subsidized, and business support services are offered to incubate a business during its early stages. Accelerators refer to programs while incubators are buildings, but all of them are systems supporting a company as it grows.
What Type of Companies Use an Accelerator?
Accelerators are best suited for companies that want to use learning and shared experience as a tool of growth. A company that wants to join an accelerator program should be in its early stages of development, just launched or almost ready to launch. You can join an accelerator with a finished product or a concept.
Some startups join with no funding but still benefit from the comprehensive resources the program offers. The aim is to mentor companies as they get their product customer- and investor-ready.
The best accelerators are not always just for companies in the startup phase. There are accelerator programs specifically designed for companies that have graduated from the startup phase and want to move to the next level. This is referred to as the second stage of growth, usually focusing on improving leadership and management to scale. This is great for businesses that have hit a wall and need to reinvent themselves as prior strategies begin to fail.
How to Pick the Right Accelerator
There are hundreds of options available when it comes to accelerator programs. So what should you look for? This depends on the unique needs of your startup.
Understanding how to judge an accelerator is important. To help you in your decision making, we compiled several questions to ask as due diligence when picking an accelerator program for your business:
- What feedback or reviews do alumni have?
- Are you in a position to relocate to the right accelerator? Relocation is not only expensive but also disruptive.
- Do the mentors and directors have connections and expertise relevant to you?
- Are you going for a common space or office atmosphere? Assess this carefully because you will have to tolerate the culture and layout for months.
- Are you comfortable with the workload? Can you juggle work and classes?
- How much equity will you part with, and is it refundable in case you drop out? What are the terms? Are they straightforward? Do not sign anything till you consult your legal advisers.
Once you’ve answered these questions, you’re ready to choose your accelerator.
The 10 Best Accelerators in Austin, Texas
Here are Benzinga's picks for the best accelerators and incubators in Austin, Texas.
1. Best Accelerator for Social Impact: Techstars Impact Accelerator, founded 2006
Techstars Impact Accelerator program is great for mission-driven organizations that use technology to mitigate social and environmental issues. They have 26 investments and offer a typical investment of $120,000. The program length is 3 months. There is no access to capital.
2. Best Accelerator for Non-Profits: Mission Capital, founded 2001
Mission Capital is a program connecting non-profits to business leaders, consultants and local social entrepreneurs. This accelerator program brings together different stakeholders to solve systematic challenges in the community. The program takes 5 months, and there is no access to capital. Mission has 10 companies in its portfolio.
3. Best Accelerator for Enterprise Innovation: Oracle Startup Growth Accelerator, founded 2016
The Oracle Startup Growth Accelerator program specializes in enterprise innovation by partnering with startups. It leads to fostering co-innovation and co-development. Companies in the program should expect to grow their revenue, scale their product and access world-class mentoring and free Oracle Cloud. The program takes 6 months, and there is no investment. Currently, this program has 10 companies in its portfolio.
4. Best Accelerator for Campus Initiatives: Jon Brumley Texas Venture Labs, TVL Accelerator, founded 2010
The Jon Brumley Texas Venture Labs, TVL Accelerator, is an accelerator for campus initiatives. This 3-month program boasts over 274 notable alumni companies since 2010. The program operates at the University of Texas and transforms graduates into business leaders and entrepreneurs.
While this accelerator doesn't invest capital in its participant companies, it does help companies connect with both investors and the University of Texas ecosystem at large. And your startup will benefit from intensive, high-impact consulting provided by dedicated teams made up of highly capable graduate students across multiple disciplines.
Over 42% of Jon Brumley Texas Venture Labs, TVL Accelerator alumni see funding within 18 months of graduating from this program, totaling over $855 million in capital. Notable companies in the program are RelayiQ, Jog.ai and M87.
If you'd like to know more about the Jon Brumley Texas Venture Labs, TVL Accelerator, visit them here for further information.
5. Best Accelerator for Makers and Founders: Sputnik ATX, founded 2017
Sputnik, which means partner in Russian, is an Austin-based accelerator and venture capital investor. The program funds early-stage maker-founders initiatives. The program is a combination of training and experience to enable startups to reach their full potential. There is no access to capital, but if selected, a startup can receive $100,000. Sputnik currently has28 companies in its portfolio and only 3 exits.
6. Best Incubator for Tech Startups: Austin Technology Incubator, founded 1989
ATI is the longest-active tech incubator in the United States.. It has a diverse portfolio of more than 300 graduate companies dealing in development, bio/health sciences, IT and development industries. In 2012, ATI raised more than $230 million. To date it has raised more than $1.7 billion in funding for startups.
7. Best Accelerator/Incubator Hybrid: Capital Factory, founded 2009
Capital Factory describes itself as the Center of Gravity for Austin's entrepreneurial community. It is both an incubator and accelerator. Its focus is to help startup companies get profits with less than $1 million. Startups have to be invited to become members. Notable names involved with the program are HomeAway, Pingboard and Instacart.
8. Best Accelerator for Consumer Products: SKU, founded 2011
SKU is a startup accelerator program for early-stage companies dealing in consumer products. SKU stands for Stock Keeping Unit. The program lasts for 14 weeks, and if accepted, applicants meet their mentors face to face once a week for 12 weeks.
Some of the notable companies associated with SKU are EPIC, Austin EastCiders, Karma Nuts, The Seaweed BathCo, Siete, Better Bites Bakery, Esker and A Pup Above, among many others.
9. Best Accelerator/Incubator for Disruptive Tech: Tech Ranch, founded 2008
The Tech Ranch program has 3 levels. There is a single-day workshop, an 8-week boot camp and a 26-week series, making Tech Ranch a mash-up between accelerator and an incubator.
Tech Ranch provides businesses with tools, processes and proven techniques that will expand their social impact. The program revolves around cutting-edge research, disruptive technologies, impact innovation and radical innovation. The program boasts of having influenced more than 6,500 businesses around the world.
10. Best Incubator for Business Startups: Economic Growth Business Incubator, founded 2011
As the name suggests, Economic Growth Business Incubator offers training, coaching and support to businesses. Its philosophy is that every business should be profitable and have an impact on the community. Hence, the program aims to help ease the barriers business owners face. So far, the Economic Growth Business Incubator has supported over 200 companies in Central Texas.
Austin: a Great Place to be a Startup
There is no doubt that Austin is a hub for entrepreneurs, and the numbers are increasing. These accelerators and incubators play a critical role in funding and developing startups helping them reach their optimum level in profits and impact.Want an in-depth look at other local rankings across the United States? Check out the Best Tech Startups in San Francisco and the Best Accelerators in Boulder, Colorado.
Continue reading: BEST TECH STARTUPS IN AUSTIN, RANKED