The Face-Off Between Incubators and Accelerators

By Vivek Chakraverty 5 Min Read

Trying to forge a strong beginning for a startup is a hard and demanding task. In the quest for startup nirvana, startup founders find an invaluable ally in incubators and accelerators. In fact, it is no rare event that such founders often seek the help and guidance of the latter.

It is common misnomer to find the terms incubator and accelerator being used interchangeably. But there is a great deal of difference between the two. So today I present to you the great face-off between accelerators and incubators, both vying for the coveted spot of being the startup founder’s best friend.

For early-stage enterprises, both accelerators and incubators are great opportunities to grow and develop. The owners get crucial guidance on the different aspects of running their business and many avenues open up for them in terms of getting funding, including those from the holy grail of the startup world – Venture Capitalists.

Faster vs. Foster

The basic difference between the two warring clans vying for startup glory lies in the objectives that the two types of programs seek to promote. Accelerators are usually for existing companies that aim for fast or accelerated growth.

On the other hand, incubators foster disruptive ideas and try to turn them into a profitable company by working out a business model suitable for the idea. Incubators can be said to stand for initial innovation while accelerators prove to be essential in scaling the business.

Set in Stone vs. Seeding

The program structures of accelerators are something akin to being set in stone. They tend to have a fixed frame of time which might be in the range of a few weeks to a few months. During this time the startups get professional help from mentors in laying the foundation stone of a solid business and also take proactive measures to prevent problems that might occur along the road.

Against this, incubators pit early-stage involvement the formation and functioning of startups. The focus is less on structure but more on seeding the right circumstances for innovative businesses to flourish.

Apply vs. Acquaint

The acceleration process starts with applications, with the best accelerators rarely taking in more than 2% of the startups wishing to pursue the program.

On the other hand, incubators mostly work with companies they are already acquainted with, and try to realize the vision behind their innovative ideas, though truth be told, incubators sometimes too adopt the application path.

Resources vs. Room

When you are selected for an accelerator, you can expect to receive a small amount of seed investment. Plus, you get access to an often-large pool of mentors. Accelerators expect you to dilute a percentage of your equity. But the piece of the pie in case of accelerators is really the network of mentors you forge connections with.

The case is not the same for incubators. Incubators typically require businesses to relocate physically to a particular geographic area. You get a shared co-working space where you happily work away to success alongside other startups similar to yours. Incubators also often offer month to month programs on leasing and give crucial access to the local community. It is not as if accelerators do not provide working spaces, but the fact remains that most do not. It is not unlikely even to see incubators offering marketing, accounting assistance besides helping in pitching and getting access to funds of different sorts.

The End of It All

The concept of demonstration day is something that is unique to an accelerator. After your program at an accelerator has come to a close, there is a pitch event where you and your cohorts demonstrate your product or service in the full glare of investors and the media.

The end word, however, rests with the startup, as these two programs are just another means of nurturing great ideas and industry.

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