Accelerator Programs are Unethical

We live in an era that is defined by instant gratification: fast cars, fast food, fast dating. And so it is no wonder that we are so enthralled by the possibility that somebody out there potentially has the ability to help us to become a millionaire—or perhaps even a billionaire—virtually overnight. Something we don't often discuss, however, is the overwhelming risk and peril that accompanies and overshadows such a hypothetical reward. Several box office blockbuster films of the past few decades have introduced to us, and eventually saturated us, with the trope of the chosen one, whether it be in the form of an adolescent wizard, or an aspiring Jedi. And these heroes and heroines respectively, ultimately managed to succeed in their quests regardless of the challenges that were laid out before them. So, then, why should we not expect that a similarly glorious future will await us, if the elite gods of the tech industry offer us a much-coveted spot in one of their Accelerator Program cohorts? Of course its true that 99% of people who apply to these programs get rejected. And it is also true that more than 90% of those who are accepted into these programs will inevitably be stonewalled and discarded by their investors. And finally, it is just as true that the vast majority of founders who are not so unfortunate and who instead manage to lead their startup to a successful IPO are fired shortly after taking their company public and then replaced by a new CEO who proceeds to tank the company's stock price by 90%. But surely that won't happen to us though, right? We're special, right? ...Right? 😬

What folows in this essay are the top reasons why, in our opinion, Accelerator Programs are both unethical and harmful to founders, startups, their employees and their customers. We'll begin with some of the more subtle programs and gradually introduce the more problematic issues regarding Accelerator Programs.

(1) They deny you your greatest advantage: time

As their name very plainly makes clear, the chief purpose of an Accelerator Program is to cause a startup to accomplish a number of significant goals in a much shorter period of than they would have, had the company not participated in the program. And the primary reasoning for wanting to do things faster is ostensibly so that the startup can gain some kind of competitive advantage by being the first to grab a huge slice of market share. That is, there is a general perception that it is easier to defend market share than to try to claim it from a dominant market leader. This belief is likely to have a lot of truth to it, but the problem is that it ignores the elephant in the room. This way of thinking assumes that there is only one way to satisfy the needs of customers and that you cannot create a new adjacent market through differentiation.

Our modern society is full of stories where a market leader seemed too big and too powerful to ever lose their status, and yet inevitably they were taken down by something in a new adjacent category:

Film cameras were replaced by digital cameras.
Cable TV was replaced by streaming networks.
CDs were replaced by MP3s.
Typewriters were replaced by personal computers.

The list goes on and on an on. And yet, the mentors at accelerator programs want you to believe that the only way to ever beat a company like Kodak is to get to market first! You must accelerate at all costs, they would tell you, otherwise you are doomed to fail. But the problem of this way of thinking, that is, believing that you cannot afford to be even an hour behind the progress of your competitors is that the technologies mentioned above were defeated by new alternatives that were not just weeks or months later than the previous market leaders. The new alternatives were often many years or even decades late, and yet they still managed to make the previous technology almost completely irrelevant!

The thing is, we as a civilisation have known for thousands of years about the great potential that humans possess if we are offered an opportunity to set aside our desire for immediate gratificatrion and focus instead on education and self improvement. This is the reason why we put our kids through schools and colleges! We recognise that it is not fair to judge a child based on what they can accomplish today, and that we ought to provide them with a nurturing environment and adequate time for them to blossom and grow. And only then can they meet their full potential. But this is the exact opposite of what the Accelerator Programs would have you believe and the opposite of how they approach the concept of mentorship.

The coordinators and mentors of Accelerator Programs will use their wealth and prominence to drown out any organic conversations or viewpoints that might be emerging in the startup community and in the general public. Then these people encourage you to abandon the traditional path of aquiring the kinds of skills and experience that might prepare you for the challenges of delivering real value to customers. For example, here is an exerpt taken from the website of the Startmate Accelerator, in October 2024:

We invest in your potential
You’re never too early. You can be pre-product, pre-customers, pre-revenue - we’re here for it. We’re industry agnostic, we don’t care about your CV, and we have one of the most gender-diverse portfolios in ANZ (40% women co-founded companies across the last 6 cohorts).

It all sounds so wonderful and progressive, you think. So you submit an application. Then you receive a rejection email and the manager of the Accelerator includes you in a mass email that is sent out to every failed applicant. In the email, he basically says, "Given the volume of applications, we are unable to provide tailored feedback at this stage of the process. However, we look for a significant ‘spike’ in at least one of the following categories in order for you to progress to stage 2 of the application process:"

Depending on the Accelerator Program, the list of qualities that they list might vary slightly, but here is an exerpt from the email sent out in June 2023 by Ryan Walker, who at that time was the Product Manager at Startmate:

Progress: Things are happening... fast. Progress can be demonstrated through number of customer interviews, number of users, amount of revenue, engagement, technical progress, reputable partnerships etc. Also having a timeframe to your progress helps us to better understand your rate of progress, unfortunately many applications gave limited information on timelines.
Invention: Invented a brand new technology.
Unique Vision: The founders see the future differently from everyone else and it’s compelling. What is the scale and severity of the problem you have identified? We look for founders solving “hair on fire” problems and can craft a clear roadmap towards achieving that.
Team: The team have previously built/hacked something together, have unbridled ambition, off-the-charts determination, are learn-it-alls, have a unique connection to the problem, can attract exceptional talent.
10x: The product is not incrementally better than what already exists, but 10X better.

It’s common for successful Startmate companies to apply a few times before being selected, which means they can highlight their progress over a 6-12 month period in their applications, and strengthen relationships with mentors. We certainly encourage you to apply for our Summer24 cohort, with applications kicking off October this year.

But hang on a second, you think to yourself, didn't they just say that I can "never be too early"? That I don't need to have a product, customers, or revenue? Although, he did say that only one of these qualities was required as a minimum. So, maybe its not so bad? Lets have a look at the rest of the list a little more closely:

INVENTION: Is he serious? It takes significant engineering qualifications and/or skills in order to create anything that is even remotely impressive in 2024 and it also takes a massive amount of time to overcome the technical challenges involved in the research & development process! Which means that just the act of attempting to come up with a great invention would probably cause you to fail at the previous criteria of fast progress!
UNIQUE VISION: Where is this unique insight supposed to be come from exactly? I mean, if an aspiring entrepreneur has no very little training, work experience, or higher education, what opportunity do they have to test their ideas in the real world in order to refine those ideas? Everybody knows that when you're rushing at things, it means that you have so little time to think that you tend to go for the "lowest hanging fruit". You pick the same generic boring ideas that anybody else would think of, and your thoughts lack originality or uniqueness. I mean, think about the last time that some authority figure unexpectedly confronted you about something. Its incredibly difficult to come up with a compelling and convincing response on the spot when you're under pressure like that, with minimal time to think.
TEAM: Ok, this one sounds interesting. Or at least it starts off sounding great, but the ending goes off the rails. He says that your team should be "learn-it-alls" which implies that

Now, hopefully as we went through this list together you are starting to notice the enormous elephant in the room with us: literally everything mentioned on this list is something that requires years (plural!) for you to aqcuire knowledge, skills and experience before you even begin to attempt to deliver on the outcomes he is seeking here, which would then taken at least several additional months. But in the end of Ryan's message exerpt, he says that he wants to see you accomplish all of this within 6-12 months of receiving your initial rejection. In fact, he literally says that he wants to see a timeframe of how quickly you are making progress!

Now, if you're one of the minority of people who has rich parents that helped you enrol at Harvard through some kind of rich-daddy privilege scheme, then maybe you have the kind of background and life experiences that have prepared you to do well at accomplishing these things. On the other hand, if you had a regular middle class upbringing and you don't physically look the way a typical tech bro is supposed to look—much like the founder of Divide By None (DBN)—then you too might be rejected by Startmate and Y Combinator, and others, even if you do have: super fast progress, a groundbreaking new invention, a unique vision, and a 10x product.

You're at particular risk of having your qualities and your accomplishments be undervalued if you are trying to create products that appeal to people or industries that are struggling. Its super easy to come up with some generic, copied & pasted product that appeals to rich white-collar folks. But coming up with real solution for people who have real problems takes a lot more careful planning, thought and consideration. And therefore, if you want to make a real difference in the world, the time that you spend initially won't be on sales calls. It will be time spent on trying to understand the problem and on trying to envision what a better future might look like. But that's not what people like Ryan want you to be doing with your time. They want you to be in endless meetings with potential customers trying to sell them whatever useless snake-oil product you can think up on the spot.

People like Ryan are robbing you of your greatest advantage, which is your ability to use your time to grow and learn. He doesn't want to give you time to gain knowledge about the world and to become your best self. He wants you to apply for his program right now and if your lack of experience means that you are not yet capable of meeting Ryan's criteria, then he and his colleagues will decide that you don't have potential. They have no intention of providing the nurturing, learning environment that you need and they won't tolerate you trying to do this for yourself in a self-reliant way. If you haven't already reached your potential, then Ryan doesn't believe that you ever will reach it, and he has no interest in helping you get there.

In other words, everything that they say about it never being "too early" to submit an application is an absolute lie. The kind of progress and other qualities that they expect of you, are things that companies engage in after literally years of careful research & development, and tens or even hundreds of millions of dollars of expenditure. Unless you are already coming from a privileged demographic, and subsequently you have connections to people who may be your first customers and cofounders, chances are that you are not truly ready to give it your best shot at an Accelerator Program. And if you do try anyway, you will be likely be judged harshly and unfairly by the panel. They will only allow you a unreasonably limited amount of time for you to make a perfect first impression before they ultimately discard you without any compensation for the many hours that you have put in or any other sacrifices that you made along the way.

(2) There potentially are perverse incentives at play

So, you might ask, if there are strong reasons why Accelerators should not be rushing you to apply to their program, why do they keep insisting otherwise? Well, there are a number of incentives that might plausibly be responsible for this:

The tech industry, in the early 21st century, is currently in the midst of a race to the borrom. The amount of money being poured into this sector is staggering, but so too is the degree of "enshitification". That is, new startups aggressively spend money to acquire customers—often setting their prices far too low for there to be any chance of a profit—and then once the company begins to gain monopoly status, they lower the quality of the product, to decrease the cost of production and then increase the retail price.
It is generally the case that the earlier an investor invests, the greater the return on investment. That is, if in scenario (A), an Accelerator like Startmate invests early enough in the life of your startup they will likely be able to convince you to part with up to 10% of your company's shares in exchange for about $100,000. On the other hand, if in scenario (B), a venture capitalist waits to invest a year or two later, they may only get 3% of your company in exchange for about $1,000,000.
It is additionally the case that the earlier a mentor or investor gets involved with a startup, the easier it is for them to exert power and influence over that startup. And the reason for this is simple: in the early days of the company there is a lot more uncertainty about what the customer might like and therefore there is a greater open-mindedness on the part of the founders. Therefore, they might more easily be convinced to compromise on their convictions than if the company had millions or even billions in revenue.
If founders choose not to get investment and mentorship at an early stage, it forces the startup to be more self-reliant and to accumulate their own body of domain knowledge and experience. This subsequently has the potential to destroy the illusion that the investors and mentors are the real experts in the room.

(3) Accelerators have a rigid formula, like McDonalds

At first glance, it might seem that this criticism is either nit-picking or just plain subjective, but hang in there and don't skip this section, because there are deep reasons why this issue can have a profoundly negative impact on startups. For one thing, it is not inherently unhealthy to eat at a fast food outlet such as McDonalds. The problem occurs if and when your overall diet lacks balance. And the same principle applies to mentorship. If your mentor operates with fixed rigid rules and deadlines, then it means that your mentor is unable to adapt and provide a balanced environment to nurture you to be your best self and to build the best possible startup.

(4) They will string you along, without pay

While we at DBN cannot say for sure that what these programs expect of you (while they string you along) could be proven in court to be an illegal form of unpaid labour, what they are expecting of you certainly does exist in a morally grey area that is extremely close to satisfying the definition of slave labour:

They often resort to passive-aggressive tactics such as stonewalling, so that you never know for sure what is going on. Have they lost interest in you? Should you give up? Or is it a test to see if you will remain resilient? Who knows!? But whatever the answer is, they often will not give you a reasonable explanation for why they are treating you with such a lack of courtesy. It is a form of psychological abuse that makes you feel pressured to appease them and to put in long hours without fair compensation simply because they never actually told you that they have rejected or discarded you. You are stuck in a kind of purgatory while the gatekeepers continue to dangle the carrot of major investment that might never occur.
They are giving you very specific guidelines about what kind of outcomes you are to accomplish with your labour, which means that to a certain extent they are telling you how to do your job. And if you establish relationships with the mentors while you try to satisfy their criteria, those mentors are likely to give you much more precise instructions—as was the experience for the founder of DBN—which means that your startup would be substantially under the control of the mentors which legally brings the mentors very close to being your employer.
The work they are having you perform is of a productive nature, rather than for the purpose of education or vocational training.
The purgatory that they put you in might last 12 months, or maybe longer, which is a long period of time to go without pay.
They do not pay you a cent during the 6-12 months that Ryan mentioned in his email. And even if you do make it into the program and receive an investment from them, this is NOT backpay for the work you have done under their direction. And you will be judged very harshly by the mentors if you choose to treat this money as backpay. You must use this money to pay for the future expenses of your startup.
While they do not tell you exactly which hours to work, their excessive demands about fast progress are an implicit demand that you work much more than 40 hours per week. In fact, the Y Combinator YouTube channel explicitly suggests that you do 70+ hours per week in order to meet their standard.
An issue which will be explored in a later section of this essay, is that of the potential for a conflict of interest. That is, it is highly plausible that when a talented founder approaches investors—whether they be independent investors or operating collectively as an Accelerator Program&mdashthat the founder's innovative proposal might be perceived as a threat to an established investor who has something to lose. A strong financial incentive exists for the investor to gain influence over the founder my making an investment, only so that the founder's startup can be stonewalled and suppressed. Therefore if there is no real intention of supporting your business, then it might be 100% accurate that you are being tricked into performing slave labour in order to distract you from successfully operating a business that might otherwise have been inconvenient to one or more of your investors.
Another important point which we will explore in more detail later, is that if you do get accepted into the program, some Accelerators engage in various forms of self-dealing, which is a specific type of corruption. That is, although on the surface it might seem as if you are working towards the success of your own business, a rogue mentor may have their own agenda. They may be funnelling the money that multiple investors have put into your business by forcing you to spend a significant portion of the investment money on buying the services of a company belonging either to the mentor, their immediate family members, or one of their business associates. In other words, they might actually have secretly turned you into an unpaid (or underpaid) employee of a money-laundering operation.
According to the Fair Work Act (2009) of Australia, unpaid work is not lawful if an employment arrangement exists, and the work is not part of a vocational placement (e.g. an education of training course). And if you dig deeper into this aspect of Australian law it might seem that Accelerators do not qualify as an employment arrangement since the startup is a separate business to the Accelerator Program, but that is not technically accurate. When you get accepted into an Accelerator—as occurred to the founder of DBN when he applied for the Griffin Accelerator in 2016—a legal entity associated with that Accelerator Program takes a partial ownership stake in your business—which is likely to grow to be a much larger proportion over time via future investment rounds—and some Accelerators, such as Griffin, have a contractual clase that forces you to give them one or more seats on the executive board of your startup which means that they literally become a part of the leadership of your business and therefore they are your employer and you are their employee.
And finally, its important to clarify that Accelerator programs do not only string you along before you are accepted into the program. Some Accelerators, such as Griffin, which is based in Canberra, often take many weeks to deliver payment after a startup has been accepted and the contracts signed. And that contract specifically states that Griffin has the right to terminate that contract up to the date that the initial investment funds have been transferred. As such, the founder feels immense pressure and stress due to the fact that they have given up their day job for this opportunity, but they may be terrified that if they do not comply with all of the demands of the mentor, that the investment might never materialise and the founder's life might be ruined.
To make matters worse, even this is still not the last time that the founder might be strung along. At any future point where the startup is seeking further investment, a similar dynamic might resume and this can potentially create a situation where the founder is essentially being coerced into accepting unfair or unfavourable contractual terms, which is an illegal tactic and an abuse of power.

(5) Everything is always your fault, never theirs

I think we can all agree that being able to accept responsibility for your own actions is essential to being a productive as an individual, but especially when working in conjunction with others. But if your agency is largely taken away from you, and you instead find yourself following someone else's instructions, is it not reasonable that the person who gave you bad advice share at least a part of the blame for the outcomes?

Accelerators will never hesitate to brag about how amazing their network of mentors and investors is. And it is for this reason that you put your trust in those mentors/investors and commit to giving their ideas a chance. They explain how incredibly successful startups before you have done similar things. And in spite of the fact that they offer you examples that don't quite match your startup or your industry you decide to trust the mentors anyway, because it just seems to make sense to do so! Its part of the reason you applied for the Accelerator in the first place, right?

The problem is that no individual piece of advice that you're given is guaranteed to instantaneously result in greater profit, or revenue or customer satisfaction. Some advice might completely backfire on you. And sometimes this is nobody's fault. There was no way anybody could have predicted the outcome. But then there are other situations where a mentor offers you advice on a topic that they plainly do not understand as well as they think.

For example, Thoko, the founder of DBN was encouraged by the investor Zac Zavos to rebuild his music app as a Web Application rather than the Mac/Windows app that had already been built. At around the same time, Thoko also received similar advice from two of the mentors of the Muru-D Accelerator as they were considering offering Thoko a spot in their program. Thoko was hesitant to do this because it would take time and he was skeptical that the Web technologies were capable of adequately handling an application of this type. But all three of these advisors insisted that Thoko was wrong and that the Web had improved to be capable of supporting such a project.

So, Thoko decided to trust them and to follow this advice. But this soon became a nightmare, because Thoko had been right all along. And to make matters worse, Thoko was not able to discover this quickly. Since there was no precedent at the time, of creating an app like that on the Web, there was no information available to prepare Thoko for the long list of problems he would face. This made it impossible to make progress at the speed that the mentors and investors were wanting, and so Thoko's startup was abandoned and discarded. No apology was ever offered. As far as they were concerned, Thoko had simply failed and was not worthy of an investment.

(6) Their mindset has a survivorship bias

A survivorship bias is a kind of logical error that causes people—particularly those in positions of power and/or influence—to advocate viewpoints that place far too much emphasis on the examples of success stories, whilst providing insufficient acknowledgement of the failed examples that might disprove the argument. And in this instance, we are referring to the tendency that the mentors of Accelerator Programs will use the examples of a handful of massively successful startups in order to prove a point, but those mentors ignore the hundreds or even thousands of failed startups that contradict the point that is being made. For example, the representatives at Y Combinator occasionally make reference to the origin story of the Airbnb company. But how many Y Combinator startups have been able to come close to repeating the phenomenal success of Airbnb? Roughly between 1% to 2% of the 5000+ startups that Y Combinator has invested in.

Now, we're not saying that it is bad advice for you to follow the example of Airbnb. Not at all. We're just saying that there is greater than 90% likelihood that Y Combinator's advice won't save your startup from complete collapse. So, it is really disengenuous for them to try to create the illusion that they're the only people who have useful knowledge. There are far more successful companies on this planet who found their success without following the examples set by Y Combinator startups than there are companies who succeeded by following those precedents. Don't trust anybody who tries to convince you that every success story—other than their own— is somehow irrelevant and not worthy of your consideration. There are many pathways to success.

On the other hand, if the people at Y Combinator were able to report to us, at some point in the distant future, that after carefully analysing both their successful and their unsuccessful program participants, some new strategies that subsequently lead to a dramatic increase in the number of startups that go on to become phenomenal successes, then such strategies would be worthy of praise and we at DBN would offer our sincerest congratulations to them for such an accomplishment. But as it stands, there simply is no reason to believe that being in Y Combinator provides any significant advantage beyond the money that the Accelerator invests in founders, and the connections that they facilitate between founders, venture capitalists and industry leaders.

(7) They have Main Character Syndrome

This problem is not just an issue that affects Accelerator Programs: it is common amongst all kinds of authority figures and therefore you will encounter this phenomenon regardless of whether you apply to an Accelerator Program or seek investment directly from unaffiliated investors. One of the red flags for this situation, is when an investor tells you that they are not choosing to invest in you because of your product or service, but because they believe in you as a person. Unless this investor then proceeds to immediately give you millions of dollars in investment, they are probably lying to you. If they invest an amount that is only in the tens or hundreds of thousands, it means that they are trying to test you, much like a person slowly dipping their toe into a body of water before full submerging themself. They will give you a relatively small amount of investment and then they will monitor you over a period of time to observe whether or not you are compliant with their "suggestions".

The quiet part—which this kind of investor is likely reluctant to admit out loud—is that they actually do not understand or appreciate your product, your customers or the industry that you operate within. When they say that they are investing in the person, it is a subtle way for them to imply that they see you having great potential so long as the investor can steer you in a new direction that the investor can make sense of. They might want you to pivot to a different customer demographic, or a different business model. Or perhaps they want you to pivot to a completely different product entirely.

If you are very early in your entrepreneurial journey, this might not be a problem for you at all. You might be feeling lost, and struggling to pick something compelling to create for customers. And maybe the investor can bring some much-needed decisiveness to your startup. But on the other hand, if you have been working on a passion project for many years and have developed a remarkable skill set that allows you to visualise the solution to one or more of society's issues, you may have a very negative experience with the kind of investor who says they are investing in you as a person.

Thoko, the founder of DBN found himself in such a situation when he was accepted into the Griffin Accelerator. Just prior to that, Thoko had won a competition run by JUCE, and sponsored by Google, which granted Thoko a free ticket to the Audio Developer's Conference. And at that conference, he received interest in his algorithms from the Head of Software Engineering at a company called Native Instruments. Thoko's back story impressed the Griffin mentors, but unfortunately this was one of those situations where the mentor/investor has no understanding or appreciation for what the entrepreneur is actually doing. And instead, the mentors/investors saw themselves as the main character.

[...]

(8) "All work and no play makes Jack a dull boy"

Many readers will recognise this as a quote from the iconic film, The Shining. And though this quote's inclusion in this essay is somewhat tongue-in-cheek, there is a very serious underlying message here as there was in that film. A not so subtle aspect of the film, is that the main character—portrayed by Jack Nicholson—wants to accomplish a personal project, in the form of an original novel, but he is unwittingly transformed into a monstrous form of himself by his immediate environment. And in spite of the protestations of his wife—and the psychological distress of their child—he aggressively insists on staying in the hotel throughout the winter season due to his contractual obligation.

Now, obviously it would be extremely hyperbolic to say that Accelerator Programs are the same thing as what is depicted in The Shining film, but there are definately analogous comparisons that can be made between certain aspects of that film and the culture that is perpetuated by startup Accelerators:

They encourage founders to be excessively obessessed with the goals of their startup. Additionally, they often suggest that founders isolate themselves from friends who believe in a more balanced and healthy lifestyle and to instead seek friendships with other founders so that this unhealthy lifestyle can be reinforced: like a hivemind.
This isolation is only further compounded by the demand that founders embrace the pseudoscientific Lean Method methodology, which rebukes founders who are so insolent as to think that it is possible to gain an understanding of their industry and of their customers' wants and needs. No, the Lean Method insists, it is impossible for a founder to gain insight or even common sense that might lead to customer satisfaction. And instead, the founder must rely entirely upon raw analytics in order to make strategic decisions. There is no room for empathy. No respect is given to founders who consider their customers to be human beings rather than just consumers at a trough.
And finally, another interesting aspect of the film, is that the spirits in the film are constantly egging the main character on: telling him that his wife and son need to be "corrected". This dynamic is especially present in the hypocrisy of the startup scene. On the one hand Accelerators such as Y Combinator are constantly reminding founders to "build things customer's want", and yet if the customer literally says that they want something (for example a quality product that is not been rushed in its development) then the mission is no longer to build what the customer wants. The real agenda is unmasked: the goal was always to build what the mentor and/or investor wants. And the customer needs to be "corrected".

(9) The power dynamics are extremely imbalanced

[...]

(10) They often put you in a "double bind" scenario

A double bind is a situation where there are two or more instructions coming from an authority figure—such as a mentor or investor from an Accelerator Program—that are contradictory. And this dynamic results in a very predictable outcome for you, in that no matter which course of action you choose, you will have failed either one instruction or the other instruction, and you will face negative consequences for it.

The first double bind occurs before you are even accepted into the Accelerator and a similar experience can repeat itself both during the course of the program and even after the program if you receive further investment from outside investors:

You have been encouraged to demonstrate exceptional work such as an invention or having many potential customers lined up.
But you are also required to achieve this without taking the neccessary time to prepare you for such a difficult task.

If you jump straight into this task and come up with the first invention that comes to mind, and create it quickly so that you have an impressive timeline to present to Ryan, your invention will probably be a knockoff of an existing product, and nobody will be impressed by it, let alone wanting to be a potential customer. And if you take the time required to improve your skills as an engineer and to do some proper research & development, Ryan will not consider you to be a real entrepreneur. Your progress was too slow.

In fact this has been a real-life experience for Thoko, the founder of DBN. In one particular meeting with the investors Mike Gregg and Zac Zavos, who Thoko met through the Griffin Accelerator, Zac stated that he was incredibly impressed with the product that Thoko had developed and said that he would be likely to invest one millions dollars through their venture capital fund. But in that exact same meeting, on that exact same day, Zac also encouraged Mike to cut off further investments and said that Thoko should probably give up and shut down his company. Zac's stated reason for this was because the progress had taken so long that the initial investment had run and in this meeting Thoko had mate the mistake of admitting that since he had been working without pay for some months now and was unable to pay his accountant, that the company owed a few months worth of bookeeping bills. The need to repay these debts was a huge red flag in the eyes of Zac, and was "proof" that Thoko's startup was doomed to fail, regardless of everything Zac had previously said about how great the product was.

(11) They can effectively blacklist you

Most of us can probably think of at least one job that we've had in our past which did not work out well at all. And as such we would never even dream about listing that prior employer as a reference when we apply for future jobs, because we know that whatever that employer says is unlikely to be a truthful or sincere representation of who we are. But what if it turned out that the hiring manager for the position that you are applying for, was a friend or associate of that prior employer? This is an unlikely scenario, but it is certainly not an impossibility. The great thing though, is that there are so many other jobs that you could apply for. You can just move on and apply for the next job. Who cares, right?

The problem for entrepreneurs though, is that the world of startup investment is very small—especially if you live in an underpopulated country like Australia—which means that the likelihood that any investor you approach in the future is an associate of another investor from your past, is quite high. And this means that even if there is no deliberate intent to blacklist you, maliciously, it is still likely to happen to you just based on the default dynamics of environment in which we operate as entrepreneurs.

The truth is, many startup investors make their investing decisions based on word of mouth. That is, if you are an entrepreneur seeking inevstment, angel investors and especially venture capital investors will often refuse to respond to your emails or private messages unless you are introduced to them by someone within their circle. In fact, Thoko, the founder of DBN was considering hiring the lawyer Xavier Keary from the prominent law firm Gilbert + Tobin, Thoko mentioned his intent to send a LinkedIn message to the Venture Capital (VC) firm Sanofi Ventures, since their web site openly encouraged entrepreneurs to do so. And Xavier instantly shot down this idea. "VC's often write such things on their web sites," Xavier said. "But it doesn't mean anything. I guarantee that they will not respond to your unsolicited message." And in the end, Xavier was right. Thoko tried making contact via LinkedIn and never got a response.

The primary reason why Accelerator Programs are popular is because they enable a founder to get past this problem. Once you are accepted into the program, there is an obligation for the mentors of that Accelerator to offer introductions to potential investors who are within their circle of influence. This can be a life changing event, and can open up your life to all sorts of opportunities that had previously been unavailable to you, but it can also be a double-edged sword. The problem with this situation should be obvious: the mentor is essentially a gatekeeper and if you don't appease them, they can easily slam that metaphorical gate in your face at any time. Thoko discovered this the hard way, when he decided he no longer wanted to be advised by George Tulloch, who is the son of Sylvia Tulloch, a mentor and investor of the Griffin Accelerator. George was constantly telling Thoko how to run his business and undermining Thoko in front of staff members. Thoko tried confronting Sylvia in the hopes that she would talk to George about this. But there was no improvement in the situation. So Thoko decided to stop paying for George's services and terminate the business relationship. And from that day forward, Sylvia refused to make further investments or introductions to other investors.

(12) They often have deep ties to local government

The Griffin Accelerator is so closely associated with the ACT Government that the program is listed on the government's web site as if it were just a regular government program. And Griffin receives free office space in a government building, which gives it the appearance—even if superficially—of being a bona fide government agency. But it is not. It is a slush fund run by local oligarchs.

[...]

(13) Their primary skillset is in brinkmanship

The rich and powerful are metaporically similar to elephants. When you see such an animal in real life, it can be both exciting and terrifying at the same time. Exciting to imagine a time in history when people used to ride such beasts into war, but terrifying to imagine yourself as a member of the opposing army or tribe. But something we often fail to consider, is that even the rider of the elephant may be in grave danger if they were to be unfortunate enough to fall from up there while the elephant is in battle-mode. The rider's body is just as fragile as anybody else's!

Similarly, it is easy to feel excited that we have rich and powerful mentors and investors on our side. But we fail to consider how it is that these people rose to be in the positions that they are in right now. Many of these people have previously been in high ranking positions at the senior management and/or executive level. And it is well known that at these levels people don't do real work: they engage in office politics. Therefore, these people often lack practical knowledge about your industry and are unable to offer practical insights into the decisions that you need to make. What these mentors and investors bring instead, is the cunning and leverage to bully and intimidate you into doing things in whatever way appeases them. These people might temporarily tolerate you having a sense of independence, and figuring things out your own way. But as soon as times get tough for you—for example if your startup struggles to hit its targets—you will immediately find that you have slipped off the elephant's back and all you can do now is try your best to avoid being trampled.