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Accelerators vs. Incubators: a guide for start-ups

Accelerators vs. Incubators: a guide for start-ups
Thursday, 11 May 2017

When small businesses are just starting out or are trying to grow, there are several resources that they can use to try and reach their goals. However, not all resources are the same and are directed towards different types of businesses or goals. In the case of accelerators and incubators the differentiation can be difficult (and in some countries almost non-existent), but in general, what should start-ups know about these two resources for building a business?.

The similarities: both of these programs offer start-ups good opportunities early and increase the probability of attracting Venture Capital later on.

The differences: based on their names, we can guess that an accelerator will ‘accelerate’ the growth of a company, while an incubator will ‘incubate’ ideas to be able to create innovative businesses.

While both of these initiatives focus on how to encourage successful start-ups, the way they go around it is different based on the type of idea and the business that will be developed. “The goal of the accelerator is to help a startup do roughly two years of business building in just a few months” [1]. Accelerators typically provide small amounts of capital and mentorship in exchange for equity in developed ideas.

Incubators can start with companies that are earlier into their development process and try to match the start-up ideas with the best time and place to ‘plant’ them. The incubator process can be much longer than an accelerator process and therefore usually require more equity.

Both accelerators and incubators can offer good support to new businesses (although it can be hard to find someone to look at you due to all the competition), the question is which one will work best in specific scenarios. It is important to research all options and figure out which best fits the needs of the idea in question.

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[1] Mike Bott quoted in the article by Conner Forrest Accelerators vs. incubators: What startups need to know.