Difference Between an Incubator and an Accelerator – What You Need to Know
Are you ready to turn your side hustle into a full-time job? Or perhaps you have a concept but don’t have all the details worked out. You might be thinking about joining an incubator or accelerator to get your business off the ground. What’s the difference, though? And how can you know which one is best for you?
Incubators help entrepreneurs develop business concepts, whereas accelerators help established businesses grow faster by providing a minimum viable product (MVP). Incubators have a flexible time limit that ends when a company has a product or idea to pitch to investors or customers. Accelerators have a specific period during which the entrepreneur receives coaching, money, and networking assistance.
Typically, accelerators begin with a thorough application process. Top accelerators are extremely selective, approving less than 2% of those who apply. Accepted businesses have typically shown rapid growth and a minimum viable product (MVP). They’re frequently provided with a small seed funding and linked with mentors from the accelerator’s extensive network.
The accelerator’s primary purpose is to increase the success of proven business concepts through networking, mentorship, and resource allocation. A company’s stint at an accelerator usually concludes with a presentation detailing the company’s growth and development over the program’s weeks or months.
What to Think About Before Joining an Accelerator?
- Is Now the Right Time? Make certain you’re enrolled in an accelerator at the appropriate moment. If you’re still looking for a co-founder or your first few workers, an incubator might be a better fit.
- How quickly or slowly are you developing? An accelerator may be the appropriate fit for your fast-growing firm. If your expansion strategy is still in the works, an incubator might be a better option.
- Will you be moving? Many accelerators demand that you relocate for the duration of your participation in their programme.
Some incubators accept applications, while others only engage with companies or entrepreneurs that have been recommended by their network of advisors. Some incubators concentrate on a single industry.
Incubators also tend to focus on businesses or entrepreneurs from a specific geographic location or compel members to permanently relocate to their coworking space or local community.
Participants spend their time at the incubator meeting other entrepreneurs, developing their ideas, establishing product-market fit, and developing a business plan. At this level, intellectual property issues are also evaluated and addressed.
The incubator process normally lasts a few months, but it can be extended, and it culminates in a pitch or demo day, during which the entrepreneur presents their business idea to the incubator community and/or investors.
Things to Think About Before Joining an Incubator
Does the incubator have the necessary mentors? Check to see if your incubator can provide particular and experienced advice for your company or idea. You don’t need someone who has spent the previous 30 years coaching new restaurateurs advising you on your shipping company idea.
Do you require funding right now? If you need money to expand your company, an accelerator can be a better option. Incubators focus on providing the business model, plan, and coaching that an entrepreneur or founder needs to confidently propose their completed business plan to investors.