On February 17, 2016 a group of 15 accelerators gathered at the Sixth Annual Latin American Impact Investing Forum in Merida, Mexico to discuss the value social enterprise accelerators offer entrepreneurs, impact investors and the larger impact ecosystem. The conversation was organized as a preparatory meeting for a future debate the Forum organized between accelerators and impact investors.
To help kick off the pre-meeting, leaders in the room were asked to respond to the intentionally controversial statement: “Accelerators do not help to build a pipeline of investment-ready businesses.” The accelerators united in resisting this accusation, asserting that their core value comprises much more than simply connecting businesses to financing.
Critical Accelerator Roles:
- Capacity building;
- Network building;
- Knowledge management;
- Leadership cultivation;
- Talent development; and
- Resource development.
The accelerators saw themselves offering equally valuable support to both entrepreneurs and the larger social enterprise ecosystem. What they did not feel responsible for was creating investment-ready businesses solely for the benefit of impact investors. While accelerators offer value to diverse stakeholders, they acknowledged it can be difficult to be in their position.
Key Accelerator Challenges:
- Being able to take credit for enterprises outcomes that are produced down the road vs. immediately after an accelerator supports a business;
- Clearly messaging services to social entrepreneurs to manage expectations;
- Sourcing funding to finance accelerator services;
- Developing relationships with impact investors who are willing to contribute to covering the costs of building ecosystem capacity; and
- Finding the right stage enterprises.
The meeting participants acknowledged that while access to financing is critical for social enterprise success, ultimately accelerators’ value extends to building communities, helping stakeholders navigate diverse resources channels, and strengthening the overall impact ecosystem. As such, accelerators’ measure of success should reflect this larger “backbone” role – vs. just building a pipeline of investment-ready businesses.