Newchip Review: Is it right for your startup?
If you are considering applying to an accelerator for your startup then you’ve come to the right place. There are many options for startup accelerator programs these days, from Y Combinator to Tech Stars. Many options means it can be hard to make your decision on where to reply and which accelerator program will offer the most value for your startup specifically. In this article we are offering a through Newchip review to help you understand the pros and cons of the Newchip accelerator program as you make your decision on the best accelerator program for your own unique company.
First, what is an accelerator?
First off, I think it is important to take a moment to demystify and clarify the role of a startup accelerator program. This will help both your understanding of what you can gain from an accelerator and more specifically how Newchip stacks up against other accelerators and the true intention for what accelerator programs offer startups.
According to the Harvard Business Review, an accelerator program is designed to help early-stage startups, that are growth-minded, by providing education, mentorship, advisory level guidance, and a path towards financing, whether that is through a fund the accelerator manages or through introductions to vetted investors.
It is important to point out that accelerators are not for the faint of heart. If you are not fully and 100% committed to your startup you should not even consider applying to an accelerator program. Accelerator programs are incredibly intense, fast-paced, and immersive educational experiences geared towards helping you grow your business. They are not a class or a college course. They are real life programs designed to help entrepreneurs turn their startup into a real business.
The core pillars of an accelerator are:
As we embark on our Newchip review, we will analyze how well Newchip stacks up as an accelerator program in light of these three core pillars.
Newchip Review: Mentorship
All accelerators seem to provide mentors as a part of their program. So, as we analyze how the value that an accelerator program provides, as it pertains to mentorship, it is most important to look at not just the volume of mentors but the quality of mentors that the accelerator offers cohort companies. This is where Newchip really stands out from the crowd. Many of the most notable accelerators such as Tech Stars and Capital Factory, they all offer their cohort companies access to mentors, but the quality of these mentors is often questionable. Many accelerator programs seem to allow any person with a LinkedIn profile to be a mentor in their accelerator. Mentors for most accelerators are not compensated in any way and the accelerator views it really as an opportunity to give back to the startup community. That’s a great and worthwhile vision, but doesn’t always yield the best quality. You might get a quality mentor. You might not. It really depends on the luck of the draw. After all, time is money and successful founders and businesspeople have very little free time to give away.
One thing that is different for Newchip is they very thoroughly vet their mentors. In addition to a rigorous vetting process, they actually pay their mentors. As a mentor, if you have experience and are willing to advise and mentor startups, Newchip will compensate you for the time you put in. This is almost unheard of as far as mentorships are concerned when it comes to accelerator programs and has really helped Newchip attract a high tier caliber of mentors.
Newchip’s mentorship grade: A
Newchip Review: Education
Again, this is where Newchip really stands out. While many accelerators have one program or curriculum, Newchip offers three program tracks to fit different stages of company: 1) Pre-Accelerator, 2) Pre-Seed, and 3) Seed & Series A. Each program curriculum is geared towards the startup stage that makes the most sense for your company and where you are specifically at in your company journey.
The various different program curriculums are also varying lengths and time commitments. The Pre-Accelerator program is a self-paced program that includes 30+ hours of online courses, startup legal templates, incorporation assistance, and is geared towards helping really early-stage companies raise initial funding to build an MVP, while getting to initial revenue and sales. the Pre-Seed and Seed & Series A programs are far more time intensive with a program commitment of 6 months that comes with 2-4 hours of coursework each week, mentor hours, a dedicated mentor, mastermind sessions, workshops, pitch coaching, and other perks and benefits to help you execute your business successfully.
Their education seems top notch and they program graduates have very positive things to say about the experience:
Having attended some other things here in Houston and other startup workshops, Newchip blew it out of the water. It was very real life and real logic-based. The flow of the program was also great. – Emmit Schultz, Founder & CEO of Savi
Newchip’s education grade: B+
(Note: I’m giving a B+ as opposed to A, because I haven’t reviewed every aspect of the program curriculum. Our review is based on testimonials, other public reviews, and what is publicly available about the curriculum.)
Newchip Review: Funding
Gaining access to funding is arguably the most important aspect to being able to successfully execute and grow your company. That said, bad companies with lots of funding are still bad companies. The mentorship and education really help to allow founders to understand and know how to effectively utilize their funds, so the three core pillars of an accelerator (mentorship, education, and funding) really work hand in hand. Even with great mentors and top notch education, it still takes capital to launch and grow a business.
Newchip provides a few things that are really helpful in getting their cohort companies access to the funding that they need:
- Access to Investor Connect Platform – a proprietary SaaS tool to help founders connect with interested investors
- A minimum of 10 guaranteed investor meetings – while some accelerator programs will tout providing access to an investor network, Newchip actually guarantees companies meetings. This is a huge plus.
- Venture Fund – in addition to guaranteeing investor meetings Newchip may also invest in your company directly through their fund, Journey Ventures.
Newchip makes no guarantee that you will get funded, which is different than say Y-Combinator and some other accelerator programs that invest a certain amount as a part of a company’s acceptance into the accelerator program. That said, Newchip also does not take any equity in your company as a part of your acceptance into the accelerator program. They simply charge a fee to participate in the accelerator if you are accepted. If Newchip then decides to invest capital through their fund, that is when Newchip would take equity as a part of their investment. This is a very reasonable trade-off, considering other accelerators can often require equity in the company, even with out commitment of providing capital. Overall, Newchip has carved out an effective and value-added model that is different than the rest of the accelerator
Newchip’s funding grade: A
Newchip Review: In Summary
Newchip checks all the major boxes as far as what you should look for and require when making the decision to join an accelerator program. The fact that Newchip does not take equity from accelerator companies is a bonus, but entrepreneurs will still need to be comfortable paying upwards of $4,000 in program tuition to be a part of the accelerator. This may seem like a lot of cash for an early-stage company, but considering all the value you’ll get in the program and the fact that Newchip doesn’t require equity, it really is a great opportunity. One thing that sets newchip apart, and makes their program far more accessible than any other accelerator is that their program is 100% online. You don’t need to travel or relocate. You can participate from your current location, which makes it a much better choice than accelerators who require you to be on site. This is especially helpful in a post-covid world, where everything is trending towards remote accessibility.
If you are excited about joining Newchip’s accelerator program, we recommend going for it! That said, you still need to apply and get accepted. Newchip does have rigorous acceptance standards, so the best next step is to apply. If you get accepted into the program, we recommend going for it!