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Marcus Daniels is a founding partner of Highline BETA. He has 20-plus years of experience as an entrepreneur, and is passionate about combining his startup accelerator & pre-seed investing expertise to help companies transform their industries.

In 2005, Y Combinator launched one of the first “startup accelerator” programs, and with it a new model for funding and supporting companies. Y Combinator and other early accelerators like it acted like extremely involved angel investors: They invested small amounts of capital in exchange for equity, and then provided intensive support to help founders make the most of that investment.

As participants of these early accelerators grew into household names like Dropbox and Airbnb, corporations began to launch copycat programs to try to emulate the accelerator model within their own walls. Companies including American Express Co. and Wells Fargo & Co. launched their own accelerators, and accelerators exploded around the world. By 2015, programs were so prevalent that one-third of startups that raised first-round financing went through an accelerator.

In the decade since, the accelerator industry has become crowded. While there are a select few standout programs such as Y Combinator, which has funded over 1,900 startups to date, the now-saturated market has made it nearly impossible to launch a new accelerator and expect to compete.

The most successful early accelerators were centred around investment and mentorship. Today, those are the minimum requirements to launch. In an overcrowded market, corporate accelerators that are little more than copycats of these early models, or that only offer office space or other programming in lieu of funding, find themselves unable to generate interest from top startups. With so much competition, and so much funding and top-tier programming available at other accelerators, companies will likely find themselves unable to attract interest from the high-calibre startups that will drive real impact for their businesses.

Accelerators are a unique opportunity for corporations to work directly with startups to launch products or services that neither could achieve on their own – yet most corporate accelerators fail to capitalize on this opportunity. Setting unclear goals like “sparking cultural transformation” or “building our innovation pipeline” accomplishes little more than marketing buzz, and leads to disappointing results for both participating startups and corporate stakeholders.

It’s not enough for an accelerator to facilitate connections between the corporation and startups in the program – in fact, this often does more harm than good, since there are still multiple layers of legal, procurement and risk requirements imposed by the core business. By the time a startup jumps through these hoops, any impact the company could have is effectively neutralized: The window of opportunity has closed, or anything truly transformational in their business or technology has been stripped away.

With the right approach, corporate accelerators are an unparalleled vehicle for companies to work directly with startups to take focused bets on the future of their industries. First, companies can attract the right startups to their programs by providing advantages that only your company can offer. Access to customers, “sandboxed” data sets (data available in a closed/controlled environment), production facilities, executive decision-makers and expedited paths to commercial agreements are just some ways that companies can help startups leapfrog years of work.

Next, be clear with goals and ideal outcomes. Identify key beliefs you have about the future of your industry, and launch an accelerator program that is designed to fuel commercial relationships with a select few startups in that space. Ignore vanity metrics, and instead measure the success of your program by partnerships formed, pilots executed and co-created products launched.

Finally, operate your accelerator in a sandboxed environment where key company stakeholders can work on experiments and pilots directly with startups. Set clear guidelines (Is this legal? Is this ethical? Is this under budget?) and protect their autonomy within them. For companies operating in industries like finance or health-care, this may also require setting up a separate legal structure or working with external partners to minimize exposure to regulatory risk.

To have real impact, programs must provide unique value to startups, drive real collaboration between startups and the host corporate, and provide the leeway to provide real impact. Without this, a corporate accelerator is doomed to fail.