A Spanish bank has started to run its own Accelerator – as a training ground for its own staff, and as a means of shifting its culture towards greater innovation; but startups will have reasons to be wary of corporate Accelerators which can limit their possible outcomes.
Banco Sabadell in Barcelona is among the first banks to run its own Accelerator. It has so far run two cohorts of startups through its 6-month programme, each cohort of five small businesses; and it plans to continue to run two cohorts per annum.
The bank believes that like Barcelona’s Football Club, it will be better if it has its own junior academy rather than have to buy in stars later – at a much higher price! An important motive behind the programme is that of shifting the culture of the bank towards greater innovation.
Candidates can be a one-person business, but the business must have at least one full-time employee, or it or it may already be a team; it must have a minimum viable product; it will very probably already have some sales; and it must be capable of rapid development. The first call elicited 400 responses, of which some 40 were shortlisted, and 5 selected.
The bank provides no funding, so candidates will already have a viable business – on a small scale; but it takes an equity stake from participants of between 6 and 10% depending on the valuation of the business.
The bank works with a partner organisation, and has a close relationship with Telefonica’s Wayra Lab, whose Accelerator in Barcelona works with earlier-stage businesses, but runs to a similar timetable.
Participants may either stay where they are already located or they may come to Barcelona, where they would receive closer mentoring. The partner organisation provides five professional mentors, and some twenty are made available by the bank, involving all sections of the bank. The bank is aiming to increase the number of workshops it provides itself, and to involve more of its own employees in the Accelerator programme; and to involve its entrepreneurs increasingly in internal conferences and similar activities of the bank.
From these first two cohorts, two of the businesses have come into the bank; one has successfully gone its own way; the bank is helping some others to find further funding; and about half have failed.
Jon Bradford of Springboard and Techstars pointed out in a recent note that corporate Accelerators may well be less attractive to startups (unless of course the corporate represents a unique market for startup’s product, or else is simply an investor) than independent Accelerators for several reasons: the programme director may have less experience; corporates will have a narrower range of mentors; they will have little interest or experience in introducing the SMEs to the VC community; and their equity stake and rights may muddy other funding opportunities and limit the SMEs market for future funding.