Luigi Meschini is head of Accelerator Funding at the Accelerator Network – the resident accelerator at Innovation Warehouse. We sat down to discuss the challenges facing startups in the increasingly competitive world of tech entrepreneurship and how to get ahead in the race.
What is your role at the Accelerator Network?
I’m the head of the Accelerator Funding Network. I work with all the startups throughout the programmes and match them with the right investors at seed stage. All of our investors are exited entrepreneurs.
We run eight different accelerator programmes up to 15 times a year. We have a pre-accelerator called Fast Forward, which we’re running twice a year. For companies at the seed stage we have the Accelerator Academy, which we run three times a year. And we have a scale-up programme called the Scale-Up Accelerator which we run twice a year, plus we have verticals.
We work with Cyber Security, the Internet of Things, AR, VR, AI and one international programme. We work with around 250 startups and scale-ups per year, depending on the different programmes. With the Academy, which is based at Innovation Warehouse, we work with around 25 startups per year. And of course, we receive all the startups that want to join us on other programmes.
Innovation Warehouse is our base. People know that we work from here and they recognise us as affiliated with the coworking and investment ecosystem.
What are the Accelerator Network’s goals and what are your plans for this year?
We actually have two key goals per company – to secure investment and make them ready to scale.
We are very focused on investment readiness. It’s the reason why startups apply to our programme and our perspective, of course, is to try to increase the number of startups that can achieve a high volume of revenue. In the Accelerator Network it’s like a journey. From the pre-accelerator stage, we are in partnership with four universities here in London. So we take the best teams from the universities, who are all very young, and we build their teams. We start with the pre-seed, we help them to validate the market, then we have the seed and we help them to scale with Series A and Series B.
So we want businesses to understand that we are able to support them throughout the whole journey. That’s the real difference – it’s not just one part of the journey and then you’re out. The connection between the programmes is stronger than before.
Do the different programmes under the Accelerator Network umbrella represent different stages in that journey?
Yes, but it depends. They represent different stages. But we have lots of verticals. Within the verticals, it’s more focused on the specific sector. For example, in cyber securities they don’t reflect the same investment criteria or growth criteria of a normal startup. So we wanted to create something different.
We are trying to boost the connections between investors and startups, especially in the scale-ups. So startups that are looking to raise between 1 million to 5 million. The investment criteria is more strict now. If you want to get money, you really need to meet the right criteria.
The money is there. The biggest problem is the market fit and the revenue generated. What we teach entrepreneurs is how to think like an investor – that’s the challenge.
You might match the required criteria but don’t know how to express or communicate how you match it. There are so many startups, especially in London, that approach the same bunch of investors, so you really have to differentiate yourself. You need someone who’s going to teach you how to answer, how to create everything clear and direct and how to think like an investor in your investment position.
So you find that lots of startups and entrepreneurs just don’t have any idea how investors think?
Right, they are so focused on their business, their idea, that they don’t consider the thing that for an investor is the real opportunity. And a lot of time they are closed to investors. I heard several times startups telling me: “Yes, we want this kind of money, but only from an investor that knows perfectly how it works.” And I’m thinking okay, fine. Of course. Smart money is important, but smart money can mean a lot of different things depending on the context.
So I believe that they are not connected to the real world. And that’s critical. They love their business so much, even if it’s really early stage, that at the end of the day they don’t understand the opportunities that they are missing. It’s not just about generating revenue – it’s about how you generate it.
All these questions are important, but it seems that founders and CEOs don’t understand it sometimes – or they don’t want to understand it. They’re in love with their idea – not the reality of the market.
What would be your key advice to startups on the programme?
The first piece of advice is to speak with as many people as possible. And keep your mind open. So if one person is telling you something, it doesn’t necessarily mean that it’s true. If ten people are telling you the same thing… maybe it’s true. Maybe there’s a reason for it.
Second point – always understand why you are doing something. People in your team will have to make decisions. And each decision has to be motivated by the higher business purpose – that is the main problem. The point is that you should be able to back up your decision with metrics, strategy, with the numbers or with everything that you are learning. If you can’t do this, you’re taking a big risk and you don’t even realise it.
The third point is to take part in an accelerator. An accelerator programme helps you to see your businesses in a more objective way – to be critical with your business. It’s important that you get out of your comfort zone and learn from other people, because at the end of the day you have to appreciate that you are the first investor in your business. You are literally spending your time. That is the most valuable thing that you have. So there’s no reason why you should not think like an investor while you’re working on your own business.