Seedcamps' Reshma Sohoni: "If All A Local Accelerator Does Is Get You Into The Next Accelerator, You're In Big Trouble"

In the startup world, accelerators and incubators are a hot topic. Pioneers Y Combinator and TechStars have mastered the formula: Seed blue-chip teams with five-to six-figure investments, and provide heavyweight mentors and investor hookups. But a new generation of copycats are stumbling. Insiders weigh in.

Photo by Ed Hepburne Scott

Reshma Sohoni

Cofounder And Partner / Seedcamp / London

Resume: Seedcamp has been called the Y Combinator of Europe. Notable alum: the founders of BaseKit, a website development platform that has raised $17.7 million in venture funding.

"In the last two years, there's been a massive mushrooming of accelerators and incubators all across Europe--every city in every country essentially has one. One of the fascinating challenges we've started to face is all these companies coming out of local, far-flung accelerators that want to apply to Seedcamp. If all a local accelerator does is get you into the next accelerator, then you're in big trouble as a founder. If you go through two or three accelerators, and you've given 20% or 30% equity away already, how do you get future rounds of investment? I do think startups that go through accelerators are more likely to be successful than the ones that don't. Still, we will have some kind of reality check on the accelerator space. It will eventually be tough for those with no returns or weaker performance to raise capital, even a very small amount. I think a day of reckoning will come in the next 5 to 10 years."

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