Most accelerator programs have varying durations of 3 to 12 months. Ours is a 5-month program with the Launchgarage pioneer class having finished last April.
At the end of a program, startups would either be…
- 1. generating enough revenue to fuel your operating expenses yourself,
- 2. happily on your way to the next funding round, or
- 3. have burned through all your capital and have no more money in the bank.
This post is about the last scenario.
“What next?” asks the founder of a beleaguered startup. Believe it or not, you’ve got options.
Validate your product.
The first thing you should do is to determine if your product market fit is still valid.
If you’re like the startups at Launchgarage, you’ve gone through a gauntlet of Lean Startup workshops, pitch critiques, mentoring sessions, and pivots.
Hopefully, you appreciated the value of that and exploited the hell out of it. If you did, then your product should be in better shape than it was before the program.
The simple truth though is that your startup possessed an ounce of value that got you into the program in the first place.
So what went wrong?
It was probably (surely) execution. Perhaps you hired the wrong team. Maybe your product design didn’t connect with your target market. You might have made unproductive spending decisions.
Whatever the reasons are, take stock of the mistakes you’ve made in those 5 months and learn from them (i.e. dropping a chunk of money on SEO work that gets you a burst of traffic with an 89% bounce rate is stupid.)
Get your bearings.
Where were you before the program? If you didn’t get in in the first place, what would you have done? What do you have today?
It’s important to remember that the role of an accelerator is to be a “shot in the arm” and was never meant to be a source of eternal working capital. You received seed funding and guidance to get yourself from point A to point B.
How far do you still have to go to get to point B and what else do you need to get there?
Man up and bootstrap!
You’ve been there before. You have a minimal amount of cash (if at all) that you have to spend wisely.
Fire people. Ask them first of course if anyone would be willing to be paid in dreams of success, some equity, and ramen. Otherwise, “the door is to the left”.
The ones that stay are the ones you want on your team. They’ll have that emotional connection to the startup and won’t think of their job as ‘work’.
Learn the art of the x-deal. If your product is in working condition, it has value to someone. Have people use it in exchange for services rendered.
Sell startup merchandise (a t-shirt with your logo on it would appeal to other startup geeks), run a party or concert with sponsors, work for clients on the side. Do whatever it takes to raise cash to survive until you get revenue or another round of funding.
C’mon you’re a startup founder! That’s all par for the course.
Being accepted to an accelerator program is something you can brag about to new investors. Your takeaways from the program are now part of your resume so be sure to use them.
Seek more funding from friends & family, angels, or other seed stage programs.
By now you’ve been trained to pitch and have gone through a number of practice and live ones. Always be pitching.
You’re only dead if you say so.
Being cashless at the end of an accelerator program isn’t the end of the world.
Think of it as 5 months of school where you got cash, an education, free publicity, and free access to consultants that helped you refine your product and business model.
That’s a good thing.