Accelerators vs. Incubators: Key Differences

Do you want to take your scaleup or start-up to the next level? If yes, then you’re in luck.

Nowadays, there are a myriad of funding and growth opportunities available for young companies to take advantage of. Whether you want to flesh out an early business idea or to expedite the growth of your start-up, there are many different paths you can take. 

However, choosing between all the different options available can be overwhelming. In particular, entrepreneurs are often at a loss when choosing between an accelerator or incubator program. 

While these two terms are often used interchangeably, they have some differences in their structure and objectives. Keep reading to learn how these different programs can benefit your company so that you can make the best choice for your goals. 

What Is an Accelerator?

Accelerators are fixed-term programs lasting between 3-6 months that help startup cohorts with the process of building a new venture. Typically, they help startups to define their initial products, identify target customer segments, and gather necessary starting resources to accelerate business growth. 

There is usually a competitive application process to join an accelerator, and accepted companies have normally already exhibited rapid growth and a minimum viable product (MVP). Once accepted to one of these programs, you’ll usually be provided with some seed capital, a working space, and an abundance of networking opportunities. 

Below are some of the most famous accelerators in the world today: 

What Is an Incubator?

Incubators help entrepreneurs with early-stage ventures or projects to develop and grow, sometimes before even the core team has been fully defined. They have a long-term duration, lasting between 1-5 years and longer. 

These programs provide office space, mentorship programs, networking, access to third-party financing, and patient capital. While some Incubators are independent, they are oftentimes sponsored by VC firms, governments, corporations, or angel investors. 

The list below includes some of the best Incubators currently operating: 

Main Differences Between Incubators and Accelerators

While incubators and accelerators share many similarities in terms of how they operate and what they provide to early-stage companies, they contrast in a number of areas. In the following overview, you’ll be able to observe the main differences between these two types of programs. 

  Accelerators Incubators
Founders Growing technology-based companies Very early-stage, still gathering their founding team
Duration 3-6 months (fixed-term) 1-5 years (open-ended)
  • Idea validation
  • Finding initial customers
  • Linking with experienced entrepreneurs 
  • Networking
  • Investment pitch assistance
  • Consulting
  • Office space 
  • Skill development for entrepreneurs
  • Develop core team
  • Consulting 
  • Networking 
  • Working space
  • Maturing business to self-sustaining or high-growth stage
  • Access to partners for business services and funding 
Fees Take an equity stake The majority are not-for-profit but some take equity or charge a fixed fee
Application Process Highly selective on a national or global scale  Competitive selection, mostly from local areas