The Digital Arts and Culture Accelerator was a pilot programme of next stage support for projects from the Digital R&D Fund for the Arts. This intervention was designed specifically to help projects explore investment readiness and economic viability with the aim of attracting new forms of finance beyond traditional routes. This one-off initiative will allow Arts Council England and Nesta to test how the accelerator model, which is now common in other sectors of business innovation, might work for the arts and cultural sector more generally.

We’re in the middle of evaluating Arts Council England and Nesta’s Digital Arts and Culture Accelerator (DACA). All nine of the organisations have been through the programme and all are still standing. It’s a fascinating process – at a time when arts organisations are exploring different options on how they can stay alive, grow or do things differently.

DACA comes at a time when the investment landscape for arts and culture is changing, with new and bold opportunities available – alongside ongoing requirements for organisations to diversify their income streams beyond subsidy. Alongside this, digital technology is disrupting the way organisations inside and outside the arts and cultural sector reach audiences and generate revenue.

The DACA ran from May to September 2016, funded by Arts Council England and Nesta. It provided a dedicated accelerator service to nine organisations that had previously participated in the Digital R&D Fund for the Arts. The DACA process, delivered by The Accelerator Network, involved a set of themed workshop sessions where diagnostic and review processes were undertaken and coaching on the core elements for effective business development, growth and investment readiness was delivered.

These sessions were complemented by a programme of distance learning – where the arts and cultural organisations undertook ‘homework’ activities related to each workshop session and geared toward wider business and organisational development, and where mentoring and ongoing advice was provided. These activities culminated in a pitching session in the City of London where organisations presented their preferred investment proposition to a specially invited audience of investors.

The model overall was designed to improve the commercial potential and thus investment readiness of participating organisations to the extent that by the end of the programme they would be in a strong position to pitch to investors with a set of realistic and investable propositions. Broadly, different DACA organisations are showing varying levels of investment readiness as they emerge from the programme:

• Still early stages – Those which struggled to develop a firm commercial proposition beyond a typical grant-funding approach and pivoted at least twice before settling on a preferred option. We have found so far that all would have benefitted from a more business focused ‘pre-accelerator’ experience which might have helped to build familiarity with the language and approach of a commercial accelerator and shape products and services more attractive to commercial investors. This is due for the most part to the challenge of reconciling creative and social outcomes with commercial ones.
• Investment ready for certain types of finance – e.g. loans and social impact funding. This is not to say grants are no longer relevant; but there is scope for the proportion of grant funding to be reduced. The DACA has introduced tools which should enable the organisations to develop new revenue streams which in turn can enhance the potential for growth and certainly make them more resilient. However, due to a mix of factors – such as IP and ownership issues – these organisations are not yet likely to be attractive to commercial investors such as business angels.
• Investment ready for commercial finance – e.g. equity. Several organisations showed a clarity of mission and were very targeted toward establishing a viable commercial model from the start of the Arts Accelerator process. They demonstrated a route to commercial finance through which their economic viability could potentially be enhanced.

Notwithstanding the differences in starting and finishing points for each participating organisation, all today have stronger investment propositions underpinned by greater clarity on how to present these propositions within a wider business. This has involved a rapid assimilation of technical information and market intelligence and a sharp appreciation of the market, competitors, cost and revenue projections, legal considerations, and the opportunities and challenges of generating new income in ways that allow for sustainable organisational development.

So, as we come up for air before the next stage of the evaluation (where we will take a longer view on the outcomes generated), it’s clear that the DACA process has, broadly, enhanced the capacity and confidence of arts and cultural organisations as they explore new directions in a transforming investment climate.