Is an Incubator or Accelerator Right for My Startup?
The business world is competitive, so don’t expect your startup to be bought in its first year. Three years go by, and less than 10% of all startups will still be alive. Fortunately, the 90% failure rate you’re up against is minimized with outside help. As a startup, there are programs made to boost your productivity and offer you the ideal exposure. Incubators and accelerators, working as businesses, are among the startup programs to consider.
Accelerators Vs Incubators: What’s the Difference?
Business startup programs aim to find talented entrepreneurs, generate investors or develop a promising idea. Though both work to mature businesses and develop brilliant thinkers, an accelerator accelerates growth, while an incubator incubates fresh ideas. At the inception of a business idea, testing, research and development come into play.
Though an idea might be inspiring, at this stage, it must also prove itself. When that idea builds around it employees, products or a history of revenue, an accelerator is favorable. Before an idea goes to market, its initial stages make it ideal for incubator programs. The choice you make between the two is based on your business and idea.
Some businesses are currently growing and building a public presence; the final stages of these businesses call for just a bit more social clout and expertise at times. Fine tuning such a business is often as simple as giving it a quarter to work with new training and resources. Money is among the resources accelerators use to get you through a final stage of business development. The work you’ve invested in up to this point is literally accelerated through new resources. These are resources you were likely lacking.
Here’s a bit more about accelerators and if they're right for you.
How do you define accelerator?
Accelerators help entrepreneurs collect vital resources in order to give them a big boost though their progress was already strong. Accelerating the work of a promising startup doesn’t require investors to invest long term. Businesses that have the potential for a larger world stage can often reach a new status by implementing just a few changes. The little work involved, which is aside from the money needed, attracts investors.
How do accelerators help startups?
Candidates that qualify for an accelerator program receive a list of common resources regardless of their agency. Here are the core areas of help startups get from accelerators:
- Support services: Through a direct contact or internal procedure, mentoring is provided to an accelerator startup until its contract has expired.
- Seed funding: This is money given to a business at the inception of its accelerator program.
- Office space: Without you incurring the overhead, there are office supplies, workspaces and team members available as your resources.
- Legal advocacy: Developing a stronger legal criteria for your business can ensure its longevity, and accelerators assign legal professionals to registered startups.
Pros and cons of a startup accelerator
All accelerators are time sensitive and controlled. You only get up to four months to achieve the goals laid out for you. Equity is the key exchange, so keep in mind that you get help in exchange for rights to your profits. The pros for investors include less research and work involved. They, additionally, have no obligations to reinvest in you.
Who are startup accelerators looking for?
Startups who have already developed a usable idea qualify the most. These businesses have gone somewhat past their ideation phase, ending in a minimum viable product. The MVP of a startup, which isn’t a person, is a product that has enough completion that it can be publicly used. Showing that you have fast growth is also necessary.
The application process
With less than a 2% acceptance rate, accelerators are one of the most difficult startup programs to enter. Dropbox and Airbnb are just two examples of the competitive brands that accelerators helped build. You’ll be asked to present your idea, which is then examined for its financial viability. When the application agency later asks for supporting documents, it's to prove what you’ve submitted. A committee then decides on your acceptance.
Top 10 startup accelerators in North America
Here are the leading accelerator programs to apply for:
The Alchemist Accelerator
Dream IT Ventures
With the same focus on business development, incubators tend to help professionals and brands at an early stage of their development. These universities and nonprofits support incubation startups that need to learn the core concepts of business. Business ideas seem simple until people pursue them, realizing later how complicated they are. Bringing ideas into existence, however, is possible with the lessons incubators teach.
Here’s a closer look at the details of an incubator and if one is right for you.
Is a business incubator right for my startup?
Long-term growth is the core philosophy of an incubator. Whereas accelerators expect a fast boost in productivity, incubators think of their investments with you indefinitely. Should you sense that years of development are ahead of you, you can still find help to hasten your progress. Keep in mind that incubators are ideal if you have low capital needs. Focusing solely on an idea shouldn’t cost much at the beginning.
The application process
In being focused on local talent, incubators want you to have a business idea, but the competition is less. Applying with an incubator doesn't call for a usable product or service. This is an option when you want real help but feel that you haven’t developed as a competitive entrepreneur. If you have, the aid of an incubator is still useful.
Who are incubators looking for?
Entrepreneurs building on an idea are the best candidates for incubators. The idea itself doesn’t need an applicable status, but it does need tact. Incubators offer helpful resources, so having a business plan assists in your interviews. You want to make sure that any intellectual property is also presented through your copyrights.
What to consider when joining an incubator
Mentorship is pivotal when learning about the competitive nuisances that make entrepreneurs successful. Getting yourself to a certain point is one thing; managing what happens after success is another skill. You can’t gain that skill alone. Now if money matters, then consider how to find investors through an accelerator instead.
Working with an incubator is more about resources and education than it is about money. Investors don’t scout for businesses within incubators. The level of development that businesses have isn’t highly public within incubators. Your association with one can be solely based on diversity. You’re not disqualified, for example, from applying if you’re in an accelerator.
Choosing the Right Accelerator or Incubator
The stage of development your business is in must be the primary factor behind the decision you make. It takes a mature entrepreneur to know that businesses, no matter the inspiring ideas they have, take time to become viable. Consider moving forward aggressively but while being patient and realistic. Even without these programs to boost your performance, assigning the right product to the right leads takes discovery.
Neither an accelerator program nor an incubator should be the sole reason for your business’s existence, but here’s a better look at your final choice between the two.
How choosing a startup accelerator differs from an incubator
Choosing a business accelerator over an incubator means that you’re first accepted into the accelerator program. A competitive idea, which accelerators look to harness, is where you start. Your idea not only needs to be inspiring, but you need real-life applications of it. This differs from incubators in that you’re likely to be assessed by a lesser standard.
Which is the right choice in the end?
The right choice for you is ultimately an offer you get that you can’t refuse. Between both incubators and accelerators, expect to submit a lot of applications. In the same manner that a writer gets rejected or a student gets denied, applying is not a guaranteed acceptance. Mix your opportunities up, and try as many startup programs that you can find. It might be a numbers’ game, so stay patient, and focus on remaining passionate.