MVP Accelerator - would you use it?
Hey IndieHackers,
We are a small efficient team that has built private SaaS for Enterprise level for years (since 2007).
We are considering starting an accelerator concept, where we take 4-5 businesses per year.
And we build you MVP to that you can go out and sell it + 6 months of support on MVP functionality as well as we would cover hosting for the full 6 months.
$0 upfront
20% equity
Timeline wise we imagine that it would be from an approved idea -> launch in around 3-4 months and the idea would have a team of 1-2 devs in the period.
This is not a promotion/ad!
The question is: Would you use it?
Our requirements would basically be that we believe in the team, that we see strong sales/marketing qualities and that we can see there is a chance to impact the market the MVP would be after.
Essentially, instead of investing money - we invest time to try to make it a bigger success faster.
Truthfully, I don't see many people being interested in it (atleast those who know what they are doing) because most Accelerators take way less than 20% while giving much more value add + $$$ these days.
Thanks for replying. The reason for the 20% is when a business don't have POC, customers or anything - we are investing into an idea.
And the MVP can either be very simple or be a challenge no one has done before.
Therefore, there is no business before the MVP is ready.
Our role after that isn't fully defined either, but at least with an MVP and POC (Proof of concept) - then the business has two options... Start making money or raise money at a much better valuation than if they did have it.
Hmm. I would say 10% would be much more enticing.
And to that point - my Team and I had gotten into Techstars LA with just a very simple demo (more so the idea really) and that was $180K in funding. $20K for 6% and then the rest in convertible notes.
The point being - try to lower that # as much as possible to make it enticing on the business' side too. 20% seems way too high, when they could prob get a tech demo these days for <$10K depending on what they're building.
I think you have a point... It probably has to be a range between 10-20%... Depending on how complex the MVP is? And probably also depending on how much we believe in the idea really would take off.
Yup - which does make a good case for just offering that service in general and not specific to an accelerator. Take in businesses as they come to you on a rolling application basis, do your due diligence, then decide a fair % and negotiate with founder.
Love your feedback! My idea is definitely being refined ;-)
Thank you
Sure thing! Wishing the best of luck : D
We're starting batch 2 of a similar product accelerator right now. Keeping it small-batch with 2 founders per cohort.
Learned a lot in year 1 and look forward to working with 2 more founders this year.
Good luck!
Sounds amazing! How aligned have you been with the people you've taken in?
Have you also done the MVP for Equity?
Would definitely be interested as someone who isn't a developer, I've always been more on the business/marketing side of things
Thanks for the positive comment!! If you have an actual project, feel free to reach out jh@profectify.com
Sure - any criteria?
Just give me a short brief over your idea and we will probably jump on Zoom for half an hour and see if we can understand the potential in your business.
If we believe we have the capabilities to do it and we love your idea then we will get right on it as we have the capacity right now.
Nope! I’m already a developer
I wouldn’t mind reading a followup post about your experience with SaaS for Enterprise
Hmm, many wantabees would contact you.
True... But I'm quite sure I could create an easy apply form on Typeform that can categorise it.... And then lead them into a 30 min BS-test Zoom call.
What do you think of the concept?
I've got nearly 20 years experience in how not to build a business... So I have sort of got a quite good filter on if people know what they are talking about or not. Of course it's a risk, but if 1/5 is working out well and the rest become sort of a success it would be worth the dev-hours.
A SaaS is 45% tech, 5-8% ops, and 50 ++ % marketing and sales.
Exactly. But we are strongest to crack the nut and do MVPs. Which is also what we love the most. That’s why we suggest 20% equity
Honestly, I would never give up 20% equity for that.
It's just way too much, given that you can do the MVP with No-Code, including a fellowship like OnDeck No-Code (For $1990) and then sign up for the ODX accelerator and get $125,000 for 7%.
If you really mean to create a sustainable business, you would go that road and pay that $1990 (or even take any other course for even less, with OnDeck you also have the community aspect though)
I think 20% with not a lot of value add and no cash at all is just too much
This truly depends on the depth of the problem you are trying to solve in the MVP :)