When you have no idea how to get your startup off the ground it may be a good idea to seek out an incubator. When you have a startup and need help taking it to the next level you may want to look into accelerators. “Accelerator” and “incubator” are not the same thing! The reason people join both is Founders get help to quickly grow their business and they introduce you to investors.
Let me break this down for founders. I have mixed feelings about them, they are great solutions for some but terrible for others. I’ll let you decide.
Accelerators “accelerate” growth of an existing company, while incubators “incubate” disruptive ideas with the hope of building out a business model and company. So, accelerators focus on scaling a business while incubators are often more focused on innovation.
ACCELERATORS: The goal of the accelerator is to help a startup do roughly two years of business building in just a few months
* Accelerator programs usually have a set time frame from a few weeks to a few months.
* Y Combinator, TechStars, and the Brandery are some of the most well-known accelerators.
* Accelerators start with an application process, but the top programs are typically very selective.
* Early stage companies are typically given a small seed investment, and access to a large mentorship network, in exchange for a small amount of equity.
* At the end of an accelerator program, you’re likely to see all the startups from a particular cohort pitch at some sort of demo day.
INCUBATORS: A company will refine its idea, build out its business plan, work on product-market fit, identify intellectual property issues, and network in the startup ecosystem.
* Startup incubators begin with companies that may be earlier in the process and they do not operate on a set schedule.
* While there are some independent incubators, they can also be sponsored or run by VC firms, angel investors, government entities, and major corporations, among others. A good example of an incubator is Idealab.
* Depending on the sponsoring party, an incubator can be focused on a specific market or vertical.
* Startups accepted into incubator programs relocate to a specific geographic area to work