Considering growth support for your startup? An incubator or accelerator may be the right choice!
As a startup founder, every day is filled with difficult decisions that could change the trajectory of your future successes or failures. Whether you are a solopreneur or are leading a growing team, an experienced helping hand is always appreciated.
If you haven’t considered incubator or accelerator support in the past, you may be missing a significant opportunity to push your business to the next level.
If you have considered working with one of these organizations, you may be asking yourself, which is right for me?
Each is unique in the structured support they offer and the profiles of startups they serve, so let’s explore your options together and we’ll see if it’s a good fit!
What are incubators and accelerators?
Both incubators and accelerators are support organizations for early-stage companies. This support comes in the form of mentorship from experienced business professionals, education, and finance options.
Businesses don’t need to enter an incubator or accelerator to be successful, but this focused learning environment can help rapidly propel growth.
There are many options when it comes to choosing an incubator or accelerator, and we’ll discuss the attributes you should consider, but if you want to see a list of our Top 10 Canadian Accelerators and Incubators, click here!
Now that we have the foundational understanding that these organizations exist to support our business growth, let’s look at how they differ.
Incubators vs Accelerators
The primary difference between incubators and accelerators is the stage of business that they serve. Every other difference can be traced back to this key detail.
Incubators are designed to guide early-stage entrepreneurs through refining their business ideas and building their operational model from the ground up. For founders who don’t yet have a minimum viable, an incubator is likely the better choice between the two.
Accelerators also serve early-stage companies, but these companies typically have a minimum viable product and demonstrated product-market fit. Education in accelerators will have a greater focus on scaling up rather than solidifying business plans.
A helpful comparison provided by the Department for Business, Energy & Industrial Strategy can be found below:
Given the different profiles of businesses that these two organization types serve, the way support is structured also differs significantly.
Incubators host a variety of businesses for a long nurture period, typically over a year, providing ad-hoc support and mentorship as the business grows. Application to these organizations is managed on a rolling basis and is generally less competitive than their close relative, accelerators.
Accelerators have a much shorter participation period. As is hinted by the name, accelerators ‘accelerate’ businesses through an intensive 3-to-6-month cohort program. These months are filled with unique networking opportunities, personalized mentorship, and collaboration with other startups.
Unlike incubators, accelerators are extremely competitive to enter. With limited space in cyclical cohorts, applicants are closely evaluated against each other. This competitive nature does mean that those accepted to the program will have access to more specialized resources, like funding!
Funding: accelerators do offer cohort participants growth capital in exchange for a percentage of company equity if they are interested. This is a choice for you as a founder, but it is an option if you need it.
The popularity of incubators and accelerators has increased significantly over the last decade. Between 2008 and 2014, the number of US-based accelerators increased by 50% each year. This has allowed more and more businesses to innovate, and it can help you too!
If you are interested in connecting with an incubator or accelerator in your area, get in touch with the Pocketed team for an introduction.
If you are looking to explore grant funding, create your Pocketed account today.