The Ongoing Problem with Brand Accelerators in the U.S.

This article is the first in the FI Quarterly Series on Emerging Consumer Brands. 

The continuing problem with corporate and independent accelerators is two-fold: the screening process and the mentors available to each cohort. An additional problem is that the motivations for mentor and brand participation don’t appear correctly aligned.

Let me start with an anecdote.

I had a conversation with a corporate venture capitalist four years ago in which he confessed, “I really try to hang back and not interfere much.” This was an astute marketing executive with twenty years of shared CPG firm experience. I found it a surprisingly honest confession of the limited nature of the value-add a massive Fortune 50 public food company can make, to say, a $5M revenue company selling premium products in an oversupplied market anchored to Walmart pricing.

I learned from consulting inside big strategics how right this pro marketer is to be skeptical of his value. Here’s the real, unique value add a strategic giant offers an early-stage brand:

1) advanced commercialization R&D science

2) access to top merchandising execs at national chains (i.e., not the ‘kids’ at trade shows)

3) and syndicated scanner data at the retail level to optimize sales block-and-tackle and consumer panel data on trial/repeat the most elite diagnostic of brand health

4) operational discipline and systems (!) (the best part of any bureaucracy if we’re really honest)

And that’s pretty much it! Honestly, the last one is probably the most alien to early-stage consumer brands built by category geeks new to the industry.

The rest of the ‘talent’ at your average BigCo would have to unlearn a ton of bad habits, get humble and relearn most of their craft to add value inside an accelerator/incubator/venture group. Managing billion-dollar, omnichannel, market share leading brands with 90% awareness and 50%+ household penetration is a specific kind of challenge unrelated to growing an unstable, early-stage brand.

And yet, this shortlist of value-adds hasn’t stopped multiple corporate giants from launching accelerators/incubators in which the ‘mentors’ are internal corporate staff, mostly in marketing and sales, primarily young MBAs. Virtually none of these ‘mentors’ have ever worked in, or even for, an early-stage brand, let alone brands with very little consumer awareness, distribution, or negotiating leverage with route-to-market stakeholders. At one such ventures’ group,’ where I advised, it became clear the ‘ventures team was some hip ‘summer camp’ for young brand managers who perhaps needed a morale-boosting break from the futile process of trying to accelerate tired megabrands at the parent company’s core. Huh? Curiously, most of these corporate ventures’ offices almost all seem to mimic the design aesthetic of IDEO’s Palo Alto HQ. Have they all been there?

Corporate accelerators have all the hallmark signs of a corporate fad: politically neutered, not appropriately staffed, and largely ignored by the corporate center. But each firm can at least say, ‘hey, we’re doing it too.’ My favorite rationale for having one is very revealing: “We can learn a lot from these more nimble startups.” I read and hear this all the time from C-level sponsors. Really? From a business that just barely got started? OK. There’s inclusive, and then there’s insincerely inclusive.

When we turn to the independent consumer brand accelerators out there, I see that they are much more intentional about helping tiny brands with tons of practical advice. They primarily focus on helping these brands get through what I’ve termed the Death Funnel, the early period that tends to kill off most emerging retail consumer brands, the tense struggle to get past $500,000 in annual net revenue.

Here’s the weird thing. I’ve reviewed lots of the resumes of independent accelerator ‘mentors’ only to discover many have no real early-stage experience, or have only worked at one such company or are simply broader industry members trying to network for a startup job (in exchange for sharing ‘expertise’). Some of them are just bored and grey. Most of these mentors also appear to be friends or ex-colleagues of the accelerator leadership rather than a carefully curated gathering of the best expertise out there within specific business functions. Often, the value add I’ve overheard tends to be common-sense business management advice that, honestly, entrepreneurs should be able to learn on their own (and if not, will fail no matter who mentors them).

If most of the mentors are not well qualified in nurturing early-stage brands at many of these accelerators, the financial rewards of winning a spot aren’t much better. $10,000. $25,000. I even came across one incubator offering $1,000 in $1 bills in what I can only describe as an exercise in Grand Boomer Condescension. Seriously? None of these sums matter much to a negative EBITDA business trying to grow fast and manage cash flow. It’s common knowledge that it’s almost impossible to cover fixed costs of operations in a consumer brand below $500,000 in annual net revenue. Unless you sell RTE popcorn. Jerks.

What early-stage startups need financially from accelerators can be sourced from family and angel networks already. While some accelerators do coordinate investor Demo Days, I’ve not been able to document any entity that can claim it will help a brand generate substantial six-figure raises at these events. This honestly is the aspect they could change most easily if they wanted to badly enough. If some accelerator is offering this, I hope they challenge me and let everyone know. I do.

The biggest elephant in the accelerator room is the size of the companies routinely brought into each cohort. They are way too small in most cases. If a founding team can not generate $500,000 annually in its home market or via DTC, it most likely will not benefit from any professional process of acceleration. Yet, most accelerators, to ‘fill cohorts’, end up sweeping in a ton of hobbyists who, for lack of any perspective, don’t know yet if they are ambitious enough to join the industry’s professional ranks. Is gaslighting with hope a thing? If so, accelerators are masters at ‘helping’ teams not ready at all to receive help.

If we step back and look at the accelerator ecosystem in the U.S., we see a grand exercise in what can best be described as corporate condescension, however well-intentioned.

And when I speak with accelerator participants, the thing they routinely point to as the chief benefit was the peer-to-peer interaction with other founders. I’ve never heard anyone point to the specialized expertise of the accelerator as a benefit.  But, peer-to-peer information is something founders can easily obtain elsewhere, even if the ritual of the program forces it to happen for the introverted founder. Clubhouse may rapidly take over this peer-to-peer knowledge-sharing role as wealthy serial entrepreneurs ‘give back’ with their time on these platforms.

If we were to stand in founders’ shoes, though, here is what an accelerator that investors AND founders would benefit from and find nowhere else:

  • Cohorts screened for $1M+ trailing revenue companies that have crawled through mud and blood and somehow survived anyways
  • $100,000 cash prize upon acceptance
  • Demo Day where angels and family offices commit in advance to pooling up to $250K per company that meets performance benchmarks by the end of the program
  • 1-year program – nothing changes in 3-months
  • Intensive business performance diagnostics upfront from national experts
  • Access to a meaningful network of brokers, buyers, and proven early-stage functional specialists (who can decide to work for equity or charge regular fees)

The point I’m making with this design is that accelerators shouldn’t waste time on teams unready for acceleration. You do not ‘accelerate’ at $100,000 trailing revenue. You’re still iterating and turning the engine on. You don’t hit the gas pedal before you turn on your car, do you? I hope not. It may be hard for founders new to CPG to accept this, but humoring everyone who appears for advice is NOT necessarily helping them. It’s patronizing unless the advisor has determined they are ready to learn.

The problem readers may have noticed is that ALL of the items in this ‘dream accelerator’ are available already independently but never all together in one accelerator program. The reasons are manifold. But the major one is the philanthropic fallacy they commit: believing all potential recipients can benefit from what they offer. In accelerator parlance, they assume all startups are fundamentally coachable, yet this is not empirically the case. The most coachable founders have mud and blood on their faces and profound clarity on what they need to learn. A gentle, MBA-style accelerator curriculum isn’t appropriate for them.

I firmly believe that proactiveness, hustle, and peer-to-peer networking can and should get most founders to $500,000 in trailing annual revenue. If not, it probably was not meant to be. I suspect that accelerators mostly exist for two purposes (at least): the operators are hoping to play the VC game of spreading their equity bets, and/or they are engaged in feel-good philanthropy/condescension. They do not demonstrate much deep empathy for the P&L reality of these very small companies. Sympathy, yes. But empathy? Perhaps the mentors who were once founders. But certainly not the bored branding agency partner in the accelerator’s hometown.

Overall, accelerators could be doing more harm than good in encouraging the wrong founders to continue rather than start again or go back to law school. The risk of sloppy mentoring is enormous when so little accountability exists when giving it inside these programs.

We can do much better, if the industry wants to find and nurture tomorrow’s killer consumer brands.

I welcome your feedback at


Disclaimer: These opinions don’t necessarily reflect the opinions of The Food Institute.