Hi, just got an offer from accelator for our idea/project accelaration and Im quite dumb about how things work in financial side of things. Will we owe them 20k pre-seed capital if in case something bad happens and we fail? How its usually handled? Thanks! *its 15% equity deal I know it depends HUGELY on terms, but how does it generally happen among accelerators?

You *shouldn't* owe them an financial obligation if you fail, since the $20k is almost always invested by accelerator as equity and it would be highly unusual if an accelerator were providing debt. 15% equity is on the high side of today's accelerators so I would be sure that this is the best deal you feel you can get before accepting.

If the accelerator isn't already well-known with many classes of graduates, I would suggest doing your due diligence and talking with companies who have already graduated from this program about their experience.

15% is only reasonable if they have a good reputation, have specific value-add you think they'll bring to your company and you and your team are inexperienced and unproven.

Happy to talk with you in a quick call if you need further clarity.

Answered 6 years ago

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