1.2.24 Incubators and Accelerators

Welcome to our discussion on incubators and accelerators. An incubator and an accelerator can both help you jump start your business. Let’s start by looking at the differences between a startup accelerator and a startup incubator. When you join an incubator, you are physically locating your business in one central workspace with many other startup companies. In many cases, the startups in these incubators can all be venture funded by the same investor group. You can stay in the space as long as you need to, or until your business has grown to the scale it needs to relocate to its own space.
The mentorship is typically provided by proven entrepreneurial investors, and by shared learnings of your startup CEO peers. Now let’s take startup accelerators. A startup accelerator is very similar to an incubator, but has some distinct differences. Your time in the space is typically limited to a three to four month period. Basically intended to jump start your business and then kick you out to go on your own. The cash investment into your business from the accelerator itself is very minimal. Usually just in the order of $20,000 dollars or so. Just enough for living expenses. But your time in the accelerator should large improve your chances of raising venture capital from a third party entity on the back end, after you graduate from the program.
Mentorship usually comes from entrepreneurs and investors that are affiliated with the accelerator. They are usually people who are proven CEOs, or investors looking for their next opportunity, or even people who simply want to help the local startup community.
Techstars and Y Combinator, as well as the others seen here, are all startup accelerators. Let’s talk about some of the key aspects of each. In an incubator, it’s usually less intensive and usually a longer program. An accelerator is a much more of an intense program, usually limited to three to four months. In an incubator, there’s a smaller network of mentors, whereas an accelerator can bring in a large mentor-driven network.
There are application restrictions for incubators, whereas for an accelerator, anyone can apply, but it’s an extremely selective application process.
Both in an incubator and an accelerator, you may be giving up an equity stake, but it really depends on the incubator and the accelerator. In an incubator, you have some resources, whereas an accelerator, you have a larger pool of resources. But in an incubator, you have longer check-in cycles, whereas an accelerator, you’re limited to regular weekly checks. An incubator also has no demo day, although this might vary, whereas an accelerator, you have a pitch or demo day with potential investors. Both accelerators and incubators provide entrepreneurs with the type of professional advice, mentoring, and tools that are needed to scale and grow a business. Where they differ is usually in terms of the duration, the look and feel, and the type of equity you’ll be giving in return. When considering either an accelerator or an incubator, you want to think about the value you would provide, as well as the insights and tool sets you would gain. For example, how confident are you in terms of pulling off your business concepts, the defensibility of your business model, your own execution skills, and your skills at fund raising?
If you’ve already exhausted your resources and need help tuning your business model or your revenue model, or you’re a first time CEO needing to hone your skills, there might be some advantages and disadvantages to consider.
The advantages include opportunities to learn, others who can help you avoid common mistakes, you may move faster than if you’re doing this alone, and more professional access to capital and resources.
Some disadvantages, however, is that it may be distracting. You’ll be pulled into lots of meetings and events. It may be very time consuming. It may also be overwhelming for you, with too many opinions on your business. It can also either be too slow and not enough pressure, or alternatively, too much and too fast for your liking. As we’ve seen, incubators and accelerators can be valuable on helping you jumpstart your business. Whether your business is better suited for an incubator or an accelerator, or either at all, will depend on your particular circumstances. To see a list of incubators and accelerators, check out the links here, and thanks for joining this lecture.

Jim Rohn Sứ mệnh khởi nghiệp