There are five major areas in which tech startup accelerators can help take a company from idea to launch. The first is a physical space to work. Most tech startup accelerators offer free office space to projects that they have chosen to fund. The typical model is an open co-working space, in which team members from several different projects share offices, conference rooms, workbenches, WiFi and coffee machines.
The second critical service offered by tech accelerators is seed money. Most accelerators award tens of thousands of dollars upfront to each team of entrepreneurs. That not only helps to cover early-stage business expenses, but also travel and living expenses for the three-month residency.
The third important service that accelerators provide is business and management consulting. As we said, it takes more than a great idea to launch a successful business. People who launch startup accelerators are typically veteran tech entrepreneurs who understand how to position a product or service in the market. Is it a consumer-facing application or something that would be even more valuable as a business-to-business service? And since software geeks aren't always the best business managers, accelerators can match inexperienced engineers with the right management teams [source: Mitra].
The fourth critical service offered by tech startup accelerators is feedback and guidance on the technology itself. Accelerators double as "hackerspaces," collaborative workspaces where engineers and creative problem-solvers can break down a good idea and rebuild it into something even better. A lot of tech startup accelerators focus on specific types of technology — cloud computing, social media apps, health care technology — and provide high levels of expertise in that space.
The last — and certainly not least — service offered by tech startup accelerators is providing critical connections to investors. Established accelerators are backed by teams of angel investors and venture capital firms that invest big money in the most promising business ideas.