FAQ says that they charge $6,000 per founder and $3,000 per non-founder to participate in the accelerator program.
Do most accelerators charge you to participate in them, while at the same time investing ~$50,000 for 5% equity?
Do most accelerators charge you to participate in them, while at the same time investing ~$50,000 for 5% equity?
It's normal for VCs in Series A to bill you for their legal expenses. Maybe that's a similar kind of thing to giving money and then charging back for expenses. It's obvious that accelerators have per-participant expenses; it's up to them and their LPs whether they should cover it by recouping from portfolio vs. overhead.
I don't think this term would influence my decision to participate or not. If an accelerator isn't a clear yes (massively increasingly your odds of success, raising your investment valuation, etc., far beyond what it costs), it's a no.
For Y Combinator, I'd say it's a clear yes. For a lot of the other accelerators, it's a no. I've heard good things about 500 Startups from other people I know who have participated.
To a certain extent it helps companies understand the value of their cash. Rent and benefits are costs that (almost) all businesses bear. $50,000 is a lot of money and some founders burn through it too quickly. Mentally, it's a lot different than YC's $15,000.
When we took part in the accelerator, we were initially surprised by this charge, but found it to be a minimal charge relative to all that 500S provides.