Accelerator vs. Incubator - Differences and How to Choose One

Once entrepreneurs have a startup idea, they need to search for the best funding options to establish their startup market. The two options they have to choose from are incubators and startup accelerator programs. Most people think that both of them are the same thing. 

However, there are many key differences between the two. It is very important to join the right program as your business's success depends on it. To make a better choice between the two, it is important to understand the differences between them. Here are a few factors you should consider:

1) Duration

Accelerators such as Tech startup accelerator programs run for a specific period which is not long and lasts for usually three to four months. During this period, the startup entrepreneurs get access to mentors and are given capital to establish their business. When the online startup accelerator program ends, entrepreneurs get an opportunity to make deals with investors. On the other hand, incubators have no set time limit and can last up to many years.  

2) Aims and goals

An online startup accelerator program is designed for companies that already have a business model in place. Tech startup accelerator programs help pair up entrepreneurs with the right investors and influencers. On the other hand, a startup incubator is for startups only in the initial stages and only has an idea but lacks a proper business model. The incubator programs help startups design the right business model, devise strategies and techniques to set up their business firmly in the market. 

3) Application procedure

To get into a startup accelerator program, you need to go through a tough and lengthy formal application procedure. In addition, there are limited seats available which makes the startup accelerator program very competitive. Incubators, however, are open to all and are not competitive. 

4) Access to capital 

A startup accelerator program invests a specific amount of capital into its candidates and startups, and in return, they take a certain percentage of the equity. The investment capital serves as the initial funding an entrepreneur needs to set up his business. On the other hand, incubators do not provide any capital.

Conclusion

If you are an entrepreneur with an idea and want guidance and equipment to build your business model, an incubator is a right choice. But if you are a startup with a business model in place and require funding, you need to join a startup accelerator program.