Brian Nichols is the co-founder of Angel Squad, a community where you’ll learn how to angel invest and get a chance to invest as little as $1k into Hustle Fund's top performing early-stage startups

The cohort has pros and cons. There's usually a lot of camaraderie with your batch. This is partly why the accelerator model is great. You have peers at the same stage as you to motivate you and keep you accountable.

But, to some extent, you're competing with your batchmates. This is especially true if you're in a program with large batches. Think about it. If everyone flooded the investor market at the same time trying to raise $1 million each, do you think there's enough capital to go around in a short period of time?

The Dirty Secret Nobody Talks About

This is the dirty secret of accelerators. They've evolved from pure funding vehicles into something more complex. Sometimes that's good. Sometimes it creates problems most founders don't see coming.

Most accelerator programs don't fund you right away. You may only get the money at the beginning of the program. Or even at the end. If you're an international company and there are legal complexities, it could happen way later than that. Sometimes your goal is just to get money in the door quickly because your company is dying, and joining an accelerator is the easiest way. That can be okay, but you should know the timing.

The Economics Have Shifted

The economics have shifted too. Most accelerators in the US these days take 5-8% equity for $100k-$150k. Abroad, the equity stakes can be higher or the dollar amounts invested in your company are lower. You need to do your homework on whether this is true because not all accelerators are the same.

Most people join accelerators to improve their fundraising. Other reasons may include opening networks to particular industries or companies. You should be explicit in considering your goal. If your goal is to raise $1 million at the end of your accelerator program, you should research whether many companies in each batch are actually able to do this.

Fundraising success varies wildly from program to program. Obviously, part of that is related to you, the entrepreneur, and your abilities. But accelerators that have greater networks to investors have a higher percentage of their companies raise more money. This is what you need to research. If there's a demo day, how many actual investors versus corporates and mentors come? How many companies in the last batch raised $1 million or more?

Timing Your Fundraise Right

For this reason, it may be wise to raise ahead of demo day. Use demo day as a forcing function to get your round done earlier. You don't want to get stuck after demo day and be raising when all investors are tapped out of money or believe that the best companies have already done all their raising. It's a weird perception, but it exists.

The interview process reveals a lot about what kind of program you're joining. Accelerator interviews are often quite different from VC interviews. You need to be able to answer questions about your business comprehensively but also concisely. Your interviewers will make a decision way faster than most VCs. Accelerator interviews tend to be a whirlwind. You might only have 10-30 minutes.

The easiest way to ruin your interview is to blather on and on. Accelerator interviews favor people who are extra concise. Some founders answer "tell me about yourself" in three sentences. Other people answer this question in 20 minutes. Even if your interviewer doesn't stop you, you don't want to eat into your own time. If you don't get through everything, that's on you.

What Accelerators Are Really Looking For

The accelerators are really looking for two things: A) Is this an awesome team? As demonstrated by what they've done to date and how they answer questions and think about things. And B) Is this an interesting opportunity? A seemingly meaningful, specific problem with a unique solution. Both of these need to come together. It's not enough to be an awesome team.

Here's the part that matters most for angels: use accelerators to network. It's actually not a good time to be heads down. Obviously you need to do some of that too, but the best usage of time is for networking. Accelerators give you the chance to meet other founders, investors, companies, and future hires.

How the Model Has Changed

This is where the model has really evolved. Early accelerators like Y Combinator created value through prestige and investor access. Now there are hundreds of programs, and the quality varies dramatically. Some have become glorified coworking spaces. Others have maintained real networks that open doors.

The best programs understand that they're not just writing checks. They're providing social proof. When a company gets into a top accelerator, it signals to angels that someone credible already vetted this team. That's worth something, but only if the accelerator's brand still carries weight.

What's changed in the past few years is the rise of specialized accelerators. Instead of generalist programs, you now have accelerators focused on fintech, climate tech, healthcare, enterprise software. These can be more valuable because they connect you to domain-specific investors and customers.

But there's a catch. Specialized accelerators often have smaller networks. You might get deeper industry connections but miss out on the broad investor base that generalist programs offer. Founders need to think about what stage they're at and what they actually need.

What Angels Should Actually Evaluate

For angels evaluating companies that went through accelerators, the questions are different now. Don't just ask "did you do YC?" Ask about the specific outcomes. How much did you raise after demo day? How long did it take? Who introduced you to your lead investor?

The companies that get the most value from accelerators are the ones that go in with a clear strategy. They know exactly which investors they want to meet. They've researched who's in the network. They use the program as a forcing function to hit specific milestones.

At Hustle Fund, the view is that companies excited about building toward a $400 million strategic exit need five to $10 million to pursue that strategy in today's world. It's awesome what's possible with the democratization of resources. This affects how accelerators think about the companies they accept and how they structure their programs.

The future of accelerators is probably smaller batches with more focused support. The mass-production model worked when venture capital was less competitive. Now, with angels and micro VCs writing smaller checks faster, the value prop of accelerators needs to evolve.

For founders considering accelerators, the decision isn't whether to apply. It's which ones are worth the dilution. For angels investing in accelerator companies, the decision is understanding which programs actually deliver on their promises. The network effects of being in the right accelerator cohort can compound for years, opening doors to future fundraising rounds and partnerships. 

That's why Angel Squad focuses on connecting angels with founders who've navigated these programs successfully, learning which accelerators create real value versus which ones are just taking equity for office space and advice.