Six Kinds of Business Incubators and Accelerators, and How to Choose One
Business incubators and business accelerators can often be intertwined and used in place of each other, but they have different functions and receive different startups. Both give counsel, guidance and support. The main difference is that accelerators, as the name implies, shorten the time frame for starting up and function like a boot camp, while incubators breed companies in their early stage, giving them room to grow at their own stride.
There are several types.
1. Virtual business incubators. A company gets advice from the incubator without being located on its site. This suits entrepreneurs who want the counsel but wish to maintain their own workspace or warehouse.
2. Public and social incubators. These are primarily for the public good, focusing on providing social entrepreneurs with what they need to broaden their horizons.
3. Seed accelerators. Also known as startup accelerators, they focus on the early stages and have fixed-term, cohort-based programs with educational components and mentorship, ending in a public pitch event.
4. Corporate accelerators. A particular type of seed accelerator supported by a profit-oriented corporation, sponsoring startups through mentorship and, most times, workspace and capital.
5. Startup studios. Also called startup factories, venture builders or startup foundries, they are designed to build several companies in succession.
6. Venture builders. Like the startup studio, but they build companies internally from their own template of ideas and resources.
To decide which to pick for your startup:
Choose one that provides free or relatively cheap workspace so you reduce overhead while you grow.
Look for a pathway to benefits such as workspace, mentorship, expertise, influence and sometimes capital.
Do your research and be sure that investors are connected to the incubator.
Consider location, the incubator's track record and its perks.
Remember that a curriculum and structured environment can help new businesses keep focus.
Expect a time commitment of one or two years, a competitive application, and possibly giving up some equity.