What’s the difference between accelerators and incubators?
In the era of entrepreneurship, accelerators and incubators have been enabling people to bring their ideas to reality and turn them into actual businesses, by offering a place to work and valuable mentorship that eventually helps companies to fine tune their ideas. But despite their popularity in modern days, people still have questions about what are the true facts about accelerators and incubators and what are the fine lines that differentiate them.
1-What are the difference between accelerators and incubators?
One the most distinct differences between accelerators and incubators is their time frame.
An accelerator works with startups for a short and specific period of time, usually from 90 days to four months. In most of the cases, accelerators also offer startups a specific amount of capital and guidance, in exchange they usually require anywhere from 3 to 8 percent ownership of the hosted company.
How do accelerators operate?
Accelerators are considered to be the speed ramp that takes startups from adolescence to something resembling early adulthood, they are meant to help startups that are already operating to scale up and create the organizational framework that they’ll need to thrive.
The accelerator experience is a process of intense, rapid, and immersive education aimed at accelerating the development of young innovative companies, compressing years’ worth of learning-by-doing into just a few months.
How do incubators operate?
An incubator is defined as an organization designed to protect and support in the very delicate early stage where any costs/ distractions unrelated to the business can keep them from growing. Incubators use an array of business support resources and services that may include physical space, capital, coaching, common services, and networking connections.
Fundamentally, incubators provide a physical office space, networking opportunities, and basic business services (IT, janitorial, conference rooms). Startup incubators begin with companies that may be earlier in the process and they do not operate on a set schedule. If an accelerator is a greenhouse for young plants to get the optimal conditions to grow, an incubator matches quality seeds with the best soil for sprouting and growth.
Incubators usually take little to no equity from the hosted companies, and are normally able to do so because they do not provide initial capital for starting companies like accelerators do, furthermore, many times incubators charge for their services.
Some- to- many incubators could be provided by universities (for example) or other educational organizations and institutions.
2-) What are the pros and cones of joining them?
Advantages of being an accelerator or incubator
Whether you work with an accelerator or an incubator, there are pros and cons for both. For starters, the advice and guidance of mentors can challenge your initial assumptions and help you avoid mistakes that could cripple your startup if you were trying to go your own way. Both options also provide access to capital that may have been otherwise unavailable, whether it’s during or after mentorship. Additionally, both accelerators and incubators provide the space to develop your idea. Lastly, being a part of an accelerator or incubator can provide invaluable connections, and some may also have networking events to help you boost your exposure.
Disadvantages of being part of an Accelerator or Incubator
Your routine and your vision are completely your own when working only with your team members. Working with an incubator or accelerator might impose the opinions of your mentors and take your idea to a direction your team doesn’t completely agree with. Working with these mentors is also a big time commitment, and will likely require you to spend time away from developing your product by attending meetings with mentors and/or investors. Additionally, your schedule depends on your mentors. Sometimes you may have to spend time speaking with mentors when you just want to get down to work without any outside influence, and sometimes you may want advice from mentors while they are busy helping other teams.
3-) How do you know which one to choose?
Making a choice whether to seek the guidance of an accelerator or incubator is not an easy decision, in the beginning you have to decide if you require the guidance, capital, and other help they can propose.
With the existence of various accelerators and incubators, the applying personnel or companies can discover the proper accelerator or incubator suiting their profile. Nevertheless, an accelerator or incubator may not be right for your startup. For instance, if you’re only looking for capital, you may be better off reaching out to an expert to help you raise funds. Or if you have enough capital, but need mentorship, you might want to utilize your network to acquire the mentorship of a veteran.
After choosing to pursue one of these mentorship programs, you need to decide whether you will benefit more from joining and accelerator and literally being pushed to grow, or whether you will benefit more from joining an incubator and progress at your own pace, but that might cost you more, eventually it lays down to 2 things:
- Either the fast development offered by an accelerator
- The unstructured progress of incubators.
The only person who knows which suites the company best is the company itself.