What is an accelerator?
Startup accelerators are fixed-term, group programs that include mentorship and training and end in a public pitch event or demo day.
Accelerator programs all differ, but they tend to work by getting startups to apply for a three or four-month scheme based within the host company’s offices, during which time they receive mentoring and guidance.
The company may choose one or two startups to partner with. They can also invest in them in return for a stake, or subsume the startup into the host company. However, entrepreneurs need to approach accelerators just as they would an investor. They need to do their research, check their portfolio.
• An opportunity to work with a top company, learn from them and get access to their customers.
• Access to support and funding.
• Refine business model.
• Can boost likelihood of attracting investment further down the line.
• Can feel like a ‘winner-takes-all’ exercise.
• Watch out for the host company’s terms e.g. exclusivity.
• Huge variety in quality across different accelerators so do your research.
What is an incubator?
The main purpose of an incubator is to help startups to grow. They are collaborative programs which help people solve problems associated with launching a startup by providing a space to work, seed funding, mentoring, training and other benefits.
Incubators differ from accelerators in a number of ways. They tend to allow startups to physically base themselves within the incubator for far longer – months or even years. They are also more likely to be run by non-profit organizations like universities, government bodies or civic groups.
• Long-term support including office space.
• A collaborative environment where you can learn from other startups.
• Investors may take larger share of the business in return for longer, more in-depth support and investment.
• Programs can drift without time limits and clearly defined expectations.