You have not lived until you have sat in Adeo Ressi’s conference room at the Founder Institute in Palo Alto and listened to him describe the long evening he spent maybe ten or twenty years ago solving the problems of the universe with a close college friend.
Fresh from a very successful exit and still young enough to care, his friend was trying to envision the future, and Adeo was helping him. That’s what he does for everyone who participates in the Founder Institute, and it’s that assistance in discovering each founder’s passion and skill set which sets the Founder Institute apart.
His college friend and Adeo spent that long evening together working through his friend’s apparently conflicting goals and dreams: sustainable development is the only way forward, but humanity needs a foothold in space, and the only way to get there right now is to burn enormous quantities of carbon-generating fuel.
Tesla Motors and SpaceX can be seen as flowing directly from their discussions over the course of that long evening, as well as from Elon Musk’s twin apparently conflicting passions. Elon is Adeo’s college friend.
If you’re a founder, and you can find someone like Adeo to work through and distill your passions into a startup reality, you are in the promised land. We should all be so lucky!
There can be real value in belonging to an incubator or accelerator, if only for a relatively short period. Admission is often competitive, and many have very experienced innovators, investors and other advisers on hand to help and orient your Startup.
But they can ask for a lot, 5% or even 8% of the Startup’s common stock in return for a few months (or less) of guidance, orientation and referrals. Some even insist on extensive anti-dilution protection, which can be very difficult to implement in practice and risks antagonizing potential investors.
Here’s my beef, and the reason why I don’t include Incubator or Accelerator Agreements in my Startup A La Carte legal services: incubators and accelerators are often inflexible with their agreements for Startup members, which reduces my potential value add.. If you’re signed up for Startup A La Carte, I’ll be happy to help. But bear in mind that it is hard work.
As you may have noticed, I like the Founder Institute. Why is on this page: http://fi.co/about. In sum, “the Founder Institute employs a unique Shared Liquidity Pool where every (participating Founder) shares equity in the companies (they) formed from each semester.” Great! Founders share in the wealth that Founder Institute creates.
And here’s a good Forbes article about the pluses and minuses of incubators and accelerators: http://www.forbes.com/sites/georgedeeb/2014/08/28/is-a-startup-incubator-or-accelerator-right-for-you/#571525873386
Finally, Quora hosts an interesting dialog here: https://www.quora.com/What-is-the-difference-between-startup-incubators-and-accelerators Check out the exchange beyween Casey Allen and Wayne Barz.