Over the few years, Nepal has become a breeding ground for business enthusiasts, probably the rate of entrepreneurship at a record high. Rather than sticking to traditional jobs or pursuing corporate careers, the youth are now into creating jobs and becoming their own bosses. However not every entrepreneurship story may end in success despite the levels of viability. Survivability and sustainability of a business is a huge challenge for young entrepreneurs. A large number of start ups and businesses fail within the first two years of establishment. Often the causes are lack of guidance, mentorship, strategy, flexibility and finance. At such times, a business accelerator can become their lifeline.
Accelerators are business support systems. They support startups or businesses in need of growth through mentorship, funding and knowledge sharing. It is a network of business collaborators where advisors, possible investors, mentors, like-minded entrepreneurs come together. Nepal currently has few business accelerators running successfully: Rockstart Impact, Next launchpad, Enterprise, Antarprerana. With the growing interest in entrepreneurship, the demand for accelerator programs is also increasing.
Kavi Raj Joshi, Founder and Managing Director of Next Venture Corp Pvt. Ltd agrees that the demand for business accelerator programs has been growing with the growing number of startups, and more entrepreneurs wanting to scale-up their businesses. Growth is what every company strives for. But the needs of entrepreneurs vary. Accelerators act as a bridge between investors and entrepreneurs and help fill the entrepreneurial knowledge gap among entrepreneurs, helping companies realise their potential. “Business accelerators provide selected entrepreneurs with mentoring, guidance, constancy, connections, exposure, and investment facilitation. Among all of these, mentoring plays a vital role. At large, it has a greater impact for the ecosystems and economy,” says Joshi.
Ajay Shrestha, CEO of iCapital and Mentor at Enterprise says, “Business accelerators connect companies with industry experts, instructors, mentors and investors. During the process, they train in areas like business model, product development, customer service, investment planning, financial planning, compliance according to national standards, company re-structuring, HR standards and so on. All this definitely adds to their capacity growth.”
Business accelerators are found to play a vital role in the business ecosystem. Though entrepreneurs are at the centre of the ecosystem, the much needed interaction and activity is made to happen by business accelerators. They are one of the contributors to deliver desired outputs. The chain of the system can’t function in absence of productive entrepreneurial activity. They enrich the level of the business/startups and keep the system upbeat. Business accelerators create opportunities for innovations to materialise. Human resources, capital, market access are some of the fundamentals for the growth of companies. Investors are seeking the right ideas while the ideas are seeking funding. This is where they come in. They become the medium where investors get access to ideas and talent and startups get access to capital.
Shedding light on the significance of business accelerators, Shrestha says it helps to connect companies with equity investors. Not all new companies can get bank loans or find good source of investment in early days. With entrepreneurial ecosystem in nascent stage, accelerators help in balancing the entrepreneurial and investor side.”
Niraj Khanal, CEO at Antarprerana says, “Accelerator programs are much needed for early stage entrepreneurs to educate themselves on doing focused business. An idea is transformed into a business plan, environment for access to finance, mentorship, networking expansion is provided through them”.
Getting business off the ground is not the real deal. Despite having a good start, confusion sets in often midway. Not only new companies, even established businesses are threatened with issues of sustainability. Joshi opines that business accelerators are important in Nepal to reduce the rate of startup failure by helping entrepreneurs with mentoring, guidance, connections and investment. Accelerators can also act as a bridge to foreign markets.
Shrestha believes not just startups, accelerator programs are needed by all companies which are looking for growth, capital and strategic connections. Shrestha shares Entreprise has seen companies grow after the acceleration process not just in numbers but in terms of maturity as well. “In early days, it was tough since we had to explain the concept of accelerator to everyone but now that phase has gone. We feel good being able to contribute in that aspect”, he adds.
However, it must be noted that accelerator programs don’t ensure success of the business and are neither a short-cut to success. They are the platform to prepare for success. Shrestha says accelerator programs provide sufficient tools and connections to founders in a very short amount of time. Success depends on how well they can use it. Some use it well, and some do not.
In fact, there are no schools where you can get knowledge on how to become an entrepreneur. Some colleges may be running entrepreneurship specific programs but not everyone has access to it. Accelerators are developing educational programs for those entrepreneurs helping to unearth the possibilities for them, navigate into the straining stages of business and foster their growth. Manohar Adhikari, Co-founder of Foodmandu.com said participating in the enterprise accelerator program helped Foodmandu on issues of finances, marketing plan, expanding business community network and running a company in more organised way. Nishchal Hirachan, Co-founder of Falfull, said, “It has been definitely productive, the confidence we have now would not have been there if we hadn’t joined Next Lauchpad. It gave us a lot of connections; we are currently looking for investment. We learnt how to segment the different parts of business, how to filter business and more.”