How to Accelerate Startup Success
Accelerators and incubators have been getting a lot of attention on the startup scene over the past decade. But what is an accelerator vs. an incubator? And how can each help to better your business?
A business accelerator differs from a “business incubator” in various ways. For instance, an accelerator is typically an intense and brief push to get a business idea up and running from development through proto-typing and production. Accelerators often invest in these startups and provide startup capital. They also pursue appropriate investors to help the venture get started.
Startup owners with good ideas can often become overwhelmed once they set off to develop a product. It’s an accelerator’s job to keep them on track and provide support in order for the startup to get on its feet and focus on the product or service it plans on developing.
Accelerators focus on rapid growth and product launches. Once a product is “on the market” (or in development, even), entrepreneurs usually pitch the prototype to other venture capitalists in order to obtain additional funding. Accelerators are good fits for startups looking to reduce time spent in the marketplace and get started.
Incubators, like accelerators, provide guidance and advice for entrepreneurs. However, the difference between the two is that accelerators compact the experience into a type of entrepreneurial “boot camp” and focus on product launch. Incubators, on the other hand, take more time and focus more on steady internal growth. Additionally, they often provide office space for startups in shared facilities. This includes Internet connections, communications, and day-to-day business hardware for startups to utilize in a shared environment. Incubators also utilize a mentorship program and have experienced market consultants, advisors, and accountants on hand to help startups grow.
Few incubators have a “maximum time” before businesses have to leave the nest. Most stay in an incubator for three to four years — any longer, and the business is likely to fail and become too dependent upon the incubator.
Nonprofits, economic groups, government organizations, and even universities often front incubators. There are plenty of industry-specific incubators out there, too. In Silicon Valley, for instance, incubators focus on tech startups.
There are various benefits for joining with an incubator. For example, rent is typically low, and there are plenty of networking benefits to take advantage of. Mentors and professional advisors are available as well. Often, the objective of an incubator is to enhance a community’s economic growth by providing solid businesses for a city.
Which Way to Go?
Every startup requires different levels of direct and indirect assistance. If you’re an entrepreneur with an idea, you can think of it like this; accelerators push businesses from adolescence into adulthood, and incubators guide startups through childhood. It all depends on what you need and what kind of idea you have. Either is useful if you’re struggling with the back-end aspects of a startup, such as accounting, the ‘business plan,’ or even marketing. Experienced advisors will help you get on the right track, especially if they are accelerators and financially interested in a startup’s success.
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