What’s the best way to determine if an accelerator is doing what it’s supposed to?

The number of incubators and accelerators continues to grow, but there’s still no universal method for measuring their success. There are many relevant criteria — companies created, wealth created, jobs created, capital invested, IPOs, exits. While organizations such as Forbes, Inc. and TechCrunch annually publish Best Incubator lists, they use different measuring sticks. We decided to ask the incubators and accelerators themselves. This is the first in a series of articles by accelerator leaders on how they think they should be judged.

Chris Heivly is managing director of The Startup Factory, a tech accelerator in Durham, N.C. A co-founder of MapQuest, he is a serial entrepreneur and former VC. The Startup Factory gives companies $50,000 seed funding in exchange for 7.5% equity.

Here’s his take:

With the glut of investment accelerators around the country and world, how does one measure success?

By last count, it seems like there are over 300 accelerators operating around the world today. If you stretch the definition to entities that refer themselves as accelerators but don’t provide capital (not an accelerator in my book), then the operating entities number in the thousands.

For the sake of this article, lets limit our definition to those that provide capital to startups. I see three basic measuring goals for these accelerators:

1. Return on Investment. Like any other venture capital organization, ultimate success will be based on returning capital to the limited partners of the fund.

2. Economic Development. Many accelerators are funded by government or quasi-government organizations with the goal of creating/supporting startups which will result in new jobs, tax revenue, etc.

3. Community Building. This is a squishy goal that can serve a range of constituents. The goal here is to help support the broadly defined local ecosystem including startup founders, later-stage investors, universities, economic development organizations, etc.

The Startup Factory is managed by Dave Neal and myself and has been in operation for 3 years. We have one goal and one goal only – return on investment for the investors in our fund. The difficulty in this goal is that we will not see full returns for seven to 10 years from now. So, how do we measure interim success?

We measure the funding our portfolio companies receive after they leave us. The notion here is that if others see what we see, then we are selecting and mentoring effectively.

To date, we have 26 companies that have exited our program and 16 (62%) have raised additional funds totaling $7M. Our Top 10 companies have raised an average of $660k from investors from all over the country. We strongly believe that we are delivering great value to our companies and to our investors.

Agree? Disagree? If you operate an incubator or accelerator, we’d like to hear from you. Please contact


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