Definition and objectives of accelerator programs An accelerator program is a time-limited, intensive support program for start-ups that aims to prepare young companies for rapid growth and market maturity within a short period of time. The programs offer start-ups a structured environment in which they can benefit from mentoring, financial support, access to infrastructure and valuable networks. In contrast to incubators, which often provide long-term support and space, accelerator programs focus on intensive support within a clearly defined period of time, typically three to six months. The central aim is to help start-ups validate and develop their business ideas in a short space of time and establish them successfully on the market. Accelerator programs are often aimed at start-ups in the early stages of their development, especially those that already have initial prototypes or market tests.

Legal relationships and contract design In legal terms, the relationship between the accelerator operator and the start-up is usually based on special funding agreements in which the obligations and rights of both parties are regulated in detail. Typically, these contracts provide for a financial participation of the accelerator in the start-up in the form of a minority stake of around 5-10%, which is usually realized through capital increases and share purchases. Alternatively, financing is provided via convertible loans or standardized instruments such as convertible notes or SAFE (Simple Agreement for Future Equity), which reduce the bureaucratic effort and allow flexibility in valuation. These agreements also include provisions on the use of infrastructure provided, the confidentiality of sensitive information and non-competition and exclusivity clauses. Particular attention is paid to regulations regarding intellectual property in order to make it clear that all innovations and inventions developed remain with the start-up.

Capital increases and requirements under company law If the accelerator acquires shares directly, this regularly requires a capital increase by the start-up, which must be regulated under company law. In practice, this requires shareholder resolutions in accordance with Sections 53 et seq. GmbHG in the case of a GmbH or Sections 182 et seq. AktG in the case of a stock corporation. These resolutions and the correct entry in the commercial register are crucial to ensure the legal effectiveness of the shareholding. Regulations on anti-dilution clauses and pre-emptive rights of existing shareholders must also be observed in order to avoid conflicts in the shareholder structure. Advice from specialized lawyers is advisable in order to minimize the legal risks for all parties involved.

Public funding and state aid law Many accelerator programs are partially supported by public funding. European and national state aid law is therefore particularly relevant. State aid regulations ensure that the funding does not cause any undue distortion of competition. This requires careful legal examination and documentation, particularly with regard to possible notification obligations to the EU Commission or national authorities. Insufficient consideration of these requirements can have serious consequences for the start-up and the operator of the accelerator program, such as claims for repayment of funding already granted.

Procedure and conclusion of the program (“Demo Day”) Accelerator programs typically end with a so-called “Demo Day”, a final event at which start-ups present their progress and business concepts to potential investors. This day serves to give the start-up visibility and to network with strategic partners and investors. The Demo Day is not only a highlight for the participating companies, but often also an important platform for further financing and expansion of the company. From a legal perspective, requirements for public communication and transparency regarding progress made and planned business development are particularly relevant. Clear regulations in advance safeguard the interests of start-ups and prevent potential conflicts or misunderstandings afterwards.

Advantages and opportunities for participating start-ups A key advantage of participating in accelerator programs is access to professional mentoring and expertise, which is often crucial for the success of a company. Start-ups also benefit from networks that facilitate access to investors, partners and potential customers. The structured and intensive support enables start-ups to be successful on the market more quickly and avoid common mistakes made by young companies. The associated brand and reputation gain can also help start-ups to attract long-term cooperation and follow-up investments more easily. All in all, participation in an accelerator program provides an ideal basis for rapid and sustainable growth.

Risks and challenges of accelerator programs Despite the numerous benefits, accelerator programs pose certain challenges. The sale of shares or the conclusion of convertible loans leads to a certain dilution of the founders’ participation, which can potentially influence future financing rounds. The obligation to make significant progress within a short period of time can also put a lot of pressure on founders. In addition, complex contractual agreements can contain legal pitfalls, particularly with regard to confidentiality and intellectual property. To minimize risks, it is advisable to seek comprehensive legal advice at an early stage and to review contracts carefully.