How to Determine Whether You Need a Startup Accelerator or Incubator

Most startup tech entrepreneurs these days wisely seek an accelerator or incubator to develop their company in its infancy, but many fail to acknowledge the differences between the two approaches.

Getting started with a startup tech company is rough. It takes months to perfect your business plan and sometimes even longer to get an initial round of funding, and after that you’ll be stuck managing full-time operational costs before you can secure a steady flow of revenue. It’s a risky business, for sure, and sometimes even great ideas succumb to the financial demands of an early stage startup enterprise.

Fortunately, there is no shortage of organizations and mentors looking to foster and encourage the next generation of entrepreneurs. For brand new businesses and entrepreneurs with hot ideas, startup accelerators and incubators give innovators the resources they need without spending a ton of already-limited cash.

But what is the difference between an incubator and an accelerator? Both offer help to new enterprises, but each has its own unique process. Incubators exist to help you build the initial infrastructure of your company, taking little to no equity as compensation. On the other hand, accelerators focus on setting and achieving a goal for new companies, taking a percentage of equity as compensation.

Let’s take a look at the advantages and disadvantages of each:

Incubators

Give you more control over your company, both in the short-term and long-term
Give you greater equity in your own startup
Allow for more flexibility in your early stages, with a less demanding timeframe
Are less competitive, so they’re easier to access

Accelerators

Give you less control over your company in exchange for more supervisory direction
Give you less equity in your own startup
Direct you to specific, aggressive target milestones and help you get there successfully
Are competitive, but faster paced

Which one is right for you? While the stage of your startup growth and the amount of capital you have access to should both be major factors in your final decision, ultimately that decision should be based on your personal needs and preferences.

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About the Author

Jose Vasquez is a serial entrepreneur and tech specialist dedicated to helping startup tech companies grow and succeed. As the founder of Build. Brand. Blast., Jose has worked with dozens of enterprises to find direction, gain momentum, and achieve results.