Startup accelerator and incubator are two common terms in the startup community; nonetheless, these two often get confused and mixed up. Both programs provide guidance to startups, as well as advance their business models and strategies, and the main goal is to groom the startup to become valuable in the eyes of investors. However, there are a few key distinctions that first-time founders should be aware of if they are planning on signing up.
What is the difference between business incubator and accelerator, and which one is a better fit for your case? This article highlights the key differences between a startup accelerator and a startup incubator.
What’s the Difference Between Startup Accelerator and Incubator?
An accelerator can be defined as a pressured programmes that help entrepreneurs at the seed-stage
Accelerators use a more traditional and formal model for entry into their program. Participants must apply for a select number of slots in the program. These programs are extremely competitive as the accelerator must select the top startups from across the country, which are scalable, investable and have to show an ability to grow rapidly within months.
Accelerators operate on a set timeframe, which usually lasts three to six months. During this period, startups build out their business with the support of mentors and capital provided by the accelerator. At the end of the program, startups receive the opportunity to pitch their businesses to investors.
The goal of the accelerator is to help a startup do roughly two years of business building in just a few months. A good accelerator programme, at the end, will give you a glimpse of where your startup founding team and business stands.
Incubators support startups entering the beginning stages of building their company. The startups possess an idea to bring to the marketplace, but no business model and direction to transition from innovative idea to reality.
Incubators invest time and resources into advancing local startups; they are generally tasked with creating jobs or finding ways to license intellectual property. Startups are a conduit to accomplish both. Incubators have less pressure to deliver startups that can grow fast, as fostering and supporting local startups is part of their charter. Therefore, even a slow-growing or less scalable business constitutes a good incubator candidate.
Incubators operate on an open-ended timeline. They focus more on the longevity of a startup and are less concerned with how quickly the company grows. It is not uncommon for incubators to mentor startups for more than a year and a half.
Startup Incubator vs. Accelerator
|Distinguishing Characteristics||Startup Accelerator||Startup Incubator|
|Duration||3-6 months||1-5 years|
|Education||Ad-hoc, Human resources, legal, etc||Seminars|
|Mentorship||Minimal, tactical||Intense, by self and others|
|Business Model||Rent; non-profit||Investment; rarely non-profit|
Casey Allen’s View (Startup Accelerator vs Incubator)
Incubators say, “We’ll give you space for free or cheap. That will give you a great start.”
Accelerators say, “We’ll give you mentors and a little bit of seed capital. That will give you a great start. Oh, and we’ve got some co-working space, but that’s minor.”
Incubators say, “We’ll make intros to great PR folks and lawyers if you want — it’s optional.”
Accelerators say, “We’ll bring lawyers and marketing folks into give you disgustingly actionable talks and allow you to ask them whatever you’d like. But you don’t have to hire them. It’s just part of your experience because we know you don’t know what you don’t know.”
Incubators say, “Stay as long as you want. We want to see you succeed.”
Accelerators say, “You’ve got 8 or 12 or 15 weeks to gain some serious traction. But we expect massive iteration out of your team. Because we want to see you succeed.”
Incubators say, “We foster small business creation with a joint partnership between the county, the state, and a consortium of regional nonprofits dedicated to sparking job and economic growth” or some stupid fucking hogwash like that.
Accelerators say, “We fund you, connect you, and drown you with mentoring and knowledge. We help you kick ass. It’s our money, so you’d better kick ass.”
Incubators say, “Sign on this dotted line which keeps you here in Kansas City or Atlanta or Calgary for 5 years.”
Accelerators say, “Go wherever you think you can kick ass. We’ve always got your back.”
Incubators say, “Cleantech? It’s popular. We’ll help incubate them!”
Accelerators say “Cleantech? Astoundingly tough to launch. No ROI. We can’t go near ’em.”
It’s a philosophical difference, and it’s not a small one. The concept of an incubator has already died, the term has just never had a proper burial. I wish it would.