Top 5 operational challenges of startup accelerators and how to manage them

Running a startup accelerator looks like a straightforward job – pick out promising startups, provide them with some education, funding, and mentoring, and send them on their prosperous way. 

But underneath that seemingly linear process lies a web of unique operations, each as complicated as the next one. From juggling applications and paperwork to engaging the community and keeping up with the alumni, it barely gets noticed when done right, but it can also be your accelerator’s downfall when things fall through the cracks. 

What are the most common operational challenges that startup accelerators face? How can you build a solid foundation that doesn’t crumble beneath its own weight? Let’s find out. 

1. Managing a high volume of applications 

Seems like there’s never the right number of applications – there’s always too few or too many. 

Why is the growing number of applications a challenge? 

• They strain the manual processes – as the number of applications grows, the inefficiencies in your processes related to reviewing and evaluating applications start to rise to the surface. 
• Maintaining quality control gets more difficult – with more applications, you'll have less time and resources to evaluate the startups thoroughly, leading to superficial decisions during the selection.
• The selection process can become overwhelming – the accelerators may need to implement additional steps to the screening process, such as multiple rounds of evaluations or interviews. It can become hard to handle if you don’t have good tools to manage those steps. 
• Managing expectations becomes a full-time job – the accelerators must effectively communicate their selection criteria, evaluation process, and timelines to all the applicants. Also, while the number of accepted applicants stays more or less the same, the number of rejected applications grows. You need to spend more time and energy on justifying and communicating your decisions, handling complaints, etc. – time you could otherwise spend on your selected startups. 

How can accelerators manage these challenges: 

• Standardize and streamline the application process to make it more efficient for both applicants and your team, e.g., applicants never insert more information than necessary at each step of your pipeline. 
• Use all-in-one tools, clear instructions, and clear predefined criteria to make submitting, reviewing, and evaluating the applications as easy as possible. 
• Make sure startups complete their application profiles, using guided templates or additional information requests, so you don’t have to make decisions on incomplete data.
• Build trust and communication from the start by keeping applicants informed throughout the selection process. This fosters a positive relationship, clear expectations, and transparency, helping to maintain long-term engagement and motivation. 
• Regularly review and evaluate the application process to ensure it’s efficient, fair, and effective. Make sure the deal qualification happens as soon as possible to reduce the time and resources you – and the applicants – spend on unsuitable applications. This also helps mitigate applicants’ frustration. 

2. Using too many tools

Accelerators often use one tool to collect applications, another for evaluation, a third for email and communication, a fourth for interviews, and so on... 

Why is using too many tools a challenge? 

• Integration and scalability problems – the more tools you have, the harder it is to make them work together. Data may be siloed in different systems, and integrating the tools can be difficult or even not an option, adding to the manual workload and inefficiency. Such systems are harder to scale and can pose a serious operational risk. 
• Losing track of information – if you keep information in different systems, data gets fragmented and you lose continuity. For example, it gets difficult to track what was agreed to and when; if the startup has provided all the necessary information; if there have been any changes; who’s made changes and when; who has access to what and when, etc. A single-source-of-truth centralized platform helps to prevent these issues.  
• Onboarding and training load – the more different tools you have (and people who have to use them), the more resistance you’ll face during onboarding. Learning each new tool requires time and resources from your team, as well as additional time and resources when training a new team member.
• Hidden cost – most tools come with subscription fees, and when they don’t, you still have considerable maintenance overhead like renewing subscriptions and solving technical or integration issues. Direct and hidden costs of seemingly affordable solutions can add up quickly and make switching providers more difficult. 
• Data risks – handling sensitive information across multiple platforms increases the risk of data breaches. Ensure that the right people have access to the right documents at the right time, and be able to prove it, even years later.

How can accelerators manage these challenges: 

• Choose tools carefully – identify if your tools have any overlapping functionalities. Consolidate tools where possible by selecting integrated platforms or solutions that offer multiple features in one system. This reduces complexity, streamlines operations, and minimizes the need for your team to juggle multiple tools. Less is more!
• Prioritize essential functionalities – pinpoint key requirements and functionalities for your accelerator, e.g. application management, mentorship, communication, and follow-on funding. Use tools that fulfill these functions well, while supporting your workflow.
• Invest in integrated platforms – look into integrated solutions that support most of your accelerator operations. Look for tools that provide integration with other tools that you’re using, enabling data sharing, automation, and workflow optimization across the entire program. Ideally, you want a solution that will help you track and manage startups from application to exit.

3. Data aggregation and document management

All of the above leave a paper trail – or at least, should leave a paper trail of notes, due diligence assessments, term sheets, signed agreements, etc. On top of that, you need to store that data in an organized way, so you can find the stuff you need throughout the years. 

How are data aggregation and document management a challenge for a startup accelerator? 

• Data sources or systems are fragmented – application forms, participant feedback, program metrics, financial records, etc. reside in separate systems or formats, making it difficult to aggregate and get an actionable overview. 
• Physical documents are sometimes necessary but are the most labor-intensive and error-prone format. Storing and organizing signed paper documents often becomes a mess.
• Limited accessibility to information – it’s hard to manage accessibility to information efficiently, which in turn affects collaboration, decision-making, and transparency across teams.

What can accelerators do to address these challenges:

• Use digital documents and signatures wherever possible – digitize your contracts, agreements, legal forms, etc. It’s best if it’s integrated into the solution you use for application, program, document and data management. 
• Establish a solid document management process – use platforms that make creating, sharing, singing, storing, organizing, and accessing digital documents easy and secure. Prefer cloud-based platforms for better collaboration. 

4. Collecting updates from the alumni 

One of the biggest struggles in accelerating and investing is collecting performance data from the graduated teams. 

How is keeping up with their alumni a challenge for a startup accelerator? 

• Losing touch with the startups – once startups have graduated, they face new challenges, and keeping in touch with the accelerator is not at the top of the list of priorities. Also, they often don’t see value in maintaining the relationship with the accelerator. 
• Getting regular and accurate updates –  it becomes increasingly difficult to collect relevant and accurate performance data when startups gradually lose touch with your accelerator. And when you do get it, they may use different metrics, formats, etc. 
• Evaluating performance over time – without consistent information, it’s hard to conduct meaningful analysis and provide support when needed.
• Data privacy concerns – startups themselves may have concerns about data privacy and confidentiality, especially if sensitive information is involved.

What can accelerators do to address these challenges?

• Make reporting as easy as possible – only request the data you need, standardize the KPIs for startups, and make reporting intuitive and simple with online platforms. 
• Establish clear expectations from the start – communicate your future expectations clearly from the beginning of your accelerator program. Define what data the startup has to provide, when, and how – and start collecting this data as soon as possible. 
• Build strong genuine relationships – continue building and maintaining strong relationships with graduated teams to keep them engaged after the accelerator program. Communicate regularly, provide updates on program developments, and offer opportunities for continued collaboration, mentorship, and support. 
• Take data privacy seriously – startups must know their data is safe with you. Implement strong privacy measures and clearly explain why you’re collecting data, how it will be used, and how you protect its confidentiality. Choosing a platform that handles these aspects can simplify this process.

5. Making a change

The challenges and the solutions accelerators face are often intertwined, much like the processes. Even the smallest change to tools can impact various areas of the accelerator’s operations. We know how you feel – making a change can be scary. 

The good news is – the impact of a change could be immensely positive so try to focus on what matters the most:

• invest in automation tools and technology to streamline manual processes, such as application screening, mentor matching, and communication.
• implement standardized evaluation criteria and workflows to ensure consistency and fairness in the selection process.
• use centralized solutions to make sure your data and communications are in one place and you have one source of information. 

A cloud-based platform to manage and run your program addresses these aspects. When choosing a platform, pick the one that: 

• helps you address as many of your challenges as possible, 
• provides support with getting started (setting up your account, importing legacy data, etc.), 
• updates their solution regularly and keeps up with the wider trends and changes. 

This way your digital processes and systems evolve side-by-side with your accelerator and continue to provide your team with valuable high-quality data for informed decision-making. 

Keep focus on your accelerator’s core mission and values, and improve the processes where it counts the most for you, your startups, and the industry in general.