Startups looking for help to get their business off the ground find a number of options when it comes to funding and support. At the same time, another increasingly popular option is choosing to join an accelerator or incubator program.
We know startup funding options, maybe a little bit, but a very few of people at large are still unaware of the basic objectives of incubator and accelerator programs.
Oftentimes, startups and incubators are lumped together, meaning confusion surrounds what distinguishes them. The advent of co-working spaces-cum-incubators also blurs the lines further. But, there are some vital distinctions that are necessary to know if you’re thinking of taking your startup down this route.
Let’s try to discover the differences between them along with the pros and cons of each.
What is an incubator program?
The main objective of an incubator program is to assist startups at a very early stage to grow. They are collaborative programs which help people solve problems tend to come out during the launch of a startup by providing a space to work, seed funding, mentoring, training and other benefits.
Incubator programs are different from accelerator programs in a number of ways. These programs may allow startups to physically base themselves within the incubator for far long time, maybe for months or even for years. These programs are also more likely to be run by non-profit organisations like universities, government bodies or even civic bodies.
-> Long-term support with allowing for office space
-> Create a collaborative environment where one can learn from other startups
-> Investors may take larger share of the business in return for longer, more in-depth support and investment
-> Sometimes support system suffers clarity
What is an accelerator program?
Accelerator programs are usually fixed-term, group programs that include mentorship and training and may end in a public pitch event or demo day.
An accelerator program and an incubator program mainly differ by the point where accelerators are generally considered to be customized to later stage startups, incubators are better suited to early stage business ideas. That said, accelerators are more focused on giving help to scale up a fledgling business.
Accelerator programs tend to work by getting startups to apply for a three or four-month scheme, based in the company’s office itself. They receive mentorship and guidance during the time.
-> Get an opportunity to work with top companies
-> Learn from them and get access to their customer experience
-> Access to support and funding
-> Get opportunity to refine business model
-> It can enhance possibility of attracting investment further down the line
-> Watch out for host company’s terms
-> Tons of research to do By participating both in incubator programs and accelerator programs, you will get networking opportunities, access to professional resources, exposure within the industry, low cost access to expensive and sophisticated equipment, low cost space and flexibility, exposure to industry leaders and mentorship, and access to funding and angel investment options, among others.