Definition
Accelerator
An accelerator is a fixed-term, cohort-based programme that gives early startups mentorship, resources and often a small investment for equity.
Accelerators run intensive programmes (often a few months) for a batch of startups, ending in a 'demo day' where founders pitch to investors. They typically take a small equity stake in exchange for a modest investment plus mentorship, network access and structured guidance. Y Combinator and Techstars are global examples; India has several active accelerators.
Accelerators suit very early companies needing direction and connections, and often invest via SAFE-style instruments. They differ from incubators, which tend to be longer, less structured and may not take equity.
Related terms
- Pre-Seed RoundA pre-seed round is the earliest external funding a startup raises, often to validate an idea before a product exists.
- SAFE NoteA SAFE (Simple Agreement for Future Equity) is an instrument by which an investor gives a startup money now in exchange for equity in a future priced round.
- IncubatorAn incubator is an organisation that nurtures very early-stage startups with workspace, resources and guidance, usually over a longer, open-ended period.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.