Accelerators vs Incubators: Which is better?

This article will dive deep into accelerator versus incubator, highlighting the key differences between the two.

In the world of startups, accelerators and incubators are both popular tools for getting your business off the ground. Startup accelerators are business programs providing education, mentoring, and funding to early-stage, growth-driven businesses. Similarly, startup incubators are similar but focus more on developing a startup from early to later stages. These two programs have been instrumental in shaping the startup ecosystem, with investors, mentors, and experts sharing their knowledge and resources with the startups. But what is the difference between an accelerator and an incubator? Which one is better, an accelerator or an incubator? This article will dive deep into accelerator versus incubator, highlighting the key differences between the two.

Startup accelerators and incubators

Before we delve into the differences between an accelerator and an incubator, let’s first understand what exactly are a startup, accelerator, and incubator. Startups are new business ventures that are generally in their early stages and have the potential to grow. With innovative ideas, unique business models, and a vision to disrupt the industry, startups have the potential to be the next big thing in a competitive marketplace. In this regard, startup accelerators and incubators provide a unique environment to help startups succeed in the early stages of growth. In the following section of the article, we will look at the concept of startup accelerators and incubators in detail.

What is a startup accelerator?

As the name suggests, startup accelerators help accelerate a startup’s growth by providing the necessary guidance, resources, and support. In simple terms, startup accelerators help startups to get their ideas off the ground quickly and efficiently. While these programs primarily focus on early-stage startups with promising prospects, startups can apply for an accelerator program at any stage. Y Combinator, Techstars, 500 Startups, and AngelPad are some of the popular startup accelerators in the world. As a result, startup accelerators are considered a critical aspect of the startup ecosystem.

Importance of startup accelerators

While the concept of startup accelerators has been around for a long time, it has gained tremendous importance recently. Over the last few years, the startup ecosystem has seen an unprecedented increase in the number of startups. With the growing demand for startups, accelerator programs have become much more popular as they offer startup companies a clear path to success. Here are a few benefits of joining a startup accelerator:

Importance of startup accelerators

  • Access to resources – One of the main benefits of a startup accelerator is access to world-class mentors, experts, and investors. Access to these resources allows startups to learn from industry experts, learn the latest technology trends, and develop a suitable business model.
  • Clear roadmap and goals – The highly structured accelerator programs provide a well-defined roadmap to help startups meet their goals. In this way, startups can quickly adapt to the fast-paced environment, gaining access to the necessary knowledge and resources.
  • Support and funding – Regarding funding, startup accelerators help startups to get the necessary funding along their way. With the help of an accelerator program, angel investors, venture capitalists, and private equity investors often come forward to invest in startups.

Duration of a startup accelerator

Well, startup accelerators take anywhere from 3 months up to 6 months to complete. However, this will depend on the accelerator program chosen, the requirements of the startup, the stage of the startup, the industry, the business model, and many other factors. It is important to note that most accelerator programs follow a structured curriculum designed to help startups build a suitable business model, acquire customers, and raise additional funding. The duration may be fixed, or it may be flexible depending on the program.

Applying to a startup accelerator

How do you apply for a startup accelerator? Startup accelerators generally have a rigorous application process that may take weeks to months. Similarly, it depends on the accelerator program and the startup. While regarding the application, startups must meet the basic requirements, which include the company’s stage, minimum viable product (MVP), prospects, target market, and so on. It is similar to a pitch deck highlighting the startup’s business model and future vision. Once the basic details are filled out along with a proposal or presentation of the startup, startups are reviewed by the accelerator.

What are startup incubators?

In a broad sense, incubators may be defined as programs that provide early-stage startups with tools, resources, and expertise to help them grow. Typically, from executing the idea and building the startup to the later stages of growth, incubators offer startups an ideal environment to succeed. They provide full-fledged management tools, industry insights, expert advice, financing options, and networking. Y Combinator, TechStars, MassChallenge, and 500 Startups are some of the top incubators around the globe. Therefore, startup incubators offer a more comprehensive and proactive approach than startup accelerators.

Importance of startup incubators

Today, startups have become an integral part of the economy, and as a result, the need for startup incubators has also increased. The following are a few advantages of having a startup incubator:

  • To help startups overcome their struggles and challenges of planning, managing, delivering, growing and scaling their ideas into a successful business model, startup incubators provide access to the latest technology trends, top-notch management skills, and expertise.
  • Startup incubators offer startups a safe, secure and structured environment which helps startups grow and protect their ideas. This allows startups to understand and identify the issues at a critical growth stage.
  • Incubator programs help startups to build their brands, get recognized by investors, and raise increased funding by presenting them in the right light. As a result, it allows startups to nurture their ideas and meet their goals rapidly.

Duration of startup incubators

In general, startup incubators provide startups with a long-term, intensive program where startups gain access to the necessary resources and expertise. The duration of a startup incubator program can vary from 18-24 months or even longer. Again, the length of the program depends on the incubator program, the idea and business model, and the prospects. As a result, incubator programs tend to be longer than startup accelerators.

Applying to a startup incubator

Preparation of the application process for startup incubators is a big deal and takes a lot of work. The applicants must prepare plenty of information regarding the startup and founder, including the concept, the idea, the business plan, the market analysis, the growth model, prospects, and even the experience and knowledge of the entrepreneur. Startup incubators are for early-stage startups; therefore, startups must clearly define their vision, mission, and goals through an application. Once the application process is completed, and the necessary details are provided, the incubator reviews the application. Based on the reviews, a decision is made.

Difference between startup accelerators and incubators

Now that we have a basic understanding of startup accelerators and incubators let us look into the core difference between a startup accelerator and a startup incubator based on certain key factors. Below are the key aspects that help differentiate between an accelerator program and an incubator program:

PurposeStructured working process with a short-term goalMentoring, training, and networking with a long-term perspective.
Working time limitSpecific deadlines with a limited and shorter time frame. Longer time frame with a flexible duration.
JoiningVery rigorous application process with strict criteria for selection. Focused, easier, and simpler application process and selection criteria.
FundsFocusing more on providing funding and deals within a short period. Focus on holistic services and funding is not the primary objective.
Funded byBacked by big corporations and businesses to make a profit.Non-profit organizations with a long-term focus on building a startup.

Startup accelerator or incubator, which is best for your startup?

One of the most common questions entrepreneurs and startups ask is which one they should join, i.e. startup accelerator program or incubator program? Well, the answer to this question is completely dependent on the nature of your startup, the requirements, the stage of development, and other related factors. Typically, when it comes to startups that are ready to scale and have a more established business model, they tend to opt for startup accelerators than startup incubators. On the other hand, startups that are at the initial stages where the idea is still in the conceptual stage and the focus is on building a business model, opt for incubators instead of accelerators.

Need help securing funding? Get a valuation from Eqvista today!

Now that you have a clear understanding of startup accelerators and startup incubators, and the differences between them, you can easily choose the one that is most suitable for your startup. But, did you know that to secure funding, you need to have a startup valuation? Eqvista offers startups a detailed solution to determine their valuation through our software and our experts. With a strong team of professional services and experts, we can be your go-to source for finding the most appropriate solution to assess and provide you with an accurate estimation of your startup’s value. To know more about business valuation, contact us today!

Interested in issuing & managing shares?

If you want to start issuing and managing shares, Try out our Eqvista App, it is free and all online!