What Are An Accelerator And An Incubator? Accelerator vs. Incubator In A Nutshell

Accelerators are programs that help entrepreneurs with a minimum viable product grow their business with advice, training, networking, and in some cases, financial support. Incubators, on the other hand, are similar programs designed to assist entrepreneurs in refining a business idea and establishing a company around it from scratch.

Aspect	Accelerator	Incubator
Purpose and Background	Accelerators are fixed-term, cohort-based programs designed to accelerate startups’ growth by providing mentorship, resources, and funding in exchange for equity. Prominent examples include Y Combinator, Techstars, and 500 Startups. Accelerators aim to propel startups rapidly and prepare them for the next stage of investment.	Incubators, in contrast, are long-term programs intended to nurture startups from ideation to maturity. They offer co-working spaces, mentorship, resources, and sometimes funding without taking equity. Well-known incubators include Seedcamp and Idealab. Incubators create a supportive environment for startups to develop at their own pace.
Program Duration	Accelerator programs are typically short and intense, spanning around three to six months. During this period, startups are expected to achieve specific milestones, participate in mentoring sessions, and often culminate the program with a demo day to attract investors.	Incubator programs are open-ended and may not have a predefined duration. Startups can remain within an incubator until they are ready to operate independently or secure external funding. The duration can vary significantly, ranging from months to several years.
Equity vs. No Equity	Accelerators usually require startups to surrender equity (typically 5-10%) in exchange for participation, mentorship, resources, and funding. This equity stake is considered an investment in the startup’s potential.	Incubators typically do not demand equity from startups. Instead, they provide support, resources, and mentorship without taking ownership stakes. While some incubators may charge fees or take a small percentage of equity, this is less common.
Selection Process	Accelerators feature highly competitive selection processes, admitting only a limited number of startups per cohort. They often receive a high volume of applications and subject startups to rigorous screening, interviews, and pitches.	Incubators generally have less competitive selection processes and are more inclusive. They tend to accept a broader range of startups and entrepreneurs. Although some incubators do have competitive entry, the barrier is typically lower than in accelerators.
Curriculum and Mentorship	Accelerators offer structured curricula, mentorship, and a rigorous schedule. Startups participate in workshops, receive guidance on various aspects like product development, marketing, and fundraising, and are encouraged to network with other startups in the cohort.	Incubators provide a less structured environment. While they do offer mentorship and resources, the level of guidance and curriculum may vary significantly. Incubated startups have greater flexibility to shape their development path, with support available as needed.
Funding and Investment	Accelerators provide startups with seed funding, often as part of the program. This funding is typically a fixed amount, and startups receive it at the program’s outset. Additionally, they may have opportunities to pitch to investors at demo days held at the program’s conclusion.	Incubators do not primarily provide direct funding. Instead, they may connect startups to potential investors, including angel investors, venture capitalists, or government grants. Funding is not a central feature of incubation, although some may offer limited financial support.
Focus on Growth	Accelerators prioritize rapid growth and scalability. They often adopt a “growth at all costs” mindset, preparing startups for the next stage of funding, such as a seed round or series A. Startups are expected to demonstrate substantial progress within a short timeframe.	Incubators focus on creating a nurturing environment for startups to develop their ideas, products, and business models. While growth is essential, it is not the sole focus, and incubated startups can evolve at their own pace, allowing for more gradual growth.
Industry Networks	Accelerators typically have extensive networks within the startup ecosystem, connecting startups with potential investors, corporate partners, industry experts, and mentors. These networks can be invaluable for a startup’s growth and expansion.	Incubators may also have industry connections but may not be as specialized or extensive as those of accelerators. The network’s focus may vary based on the incubator’s mission and area of expertise.
Graduation and Next Steps	Accelerators often culminate in a demo day, where startups pitch to a room full of investors. After graduation, startups are expected to secure additional funding, enter new markets, or achieve significant growth as they move to the next stage of their development.	Incubators do not typically have a formal graduation event like accelerators. Instead, startups can transition out of an incubator when they are sufficiently mature, secure external funding, or have reached their defined goals. The exit strategy varies for each incubator.
Dynamic Environment	The accelerator model is well-suited for startups operating in dynamic and rapidly evolving environments. It is particularly advantageous when adaptability and speed are crucial for success.	Incubators are more flexible and adaptable to the needs of startups. While they can also support startups in dynamic environments, they are equally suitable for startups operating in less volatile industries or seeking more gradual growth.
Startups vs. Established	Accelerators cater to both startups and established companies, but they are particularly popular among startups. Startups use accelerators to refine their business models, access networks, and secure funding. Established companies may seek accelerators for innovation.	Incubators primarily serve startups, providing them with the support needed to develop their concepts into viable businesses. They offer a nurturing environment that is well-suited for startups in their early stages of development.

Table of Contents

Understanding accelerators

A startup accelerator describes an organization that provides mentorship, capital, and access to a network of business partners and investors for startups with a validated minimum viable product (MVP). To that end, accelerator programs are well suited to companies with potential as a way to rapidly scale growth.

Examples of companies that run accelerator programs include Y Combinator, Techstars, and MassChallenge. The acceptance rate for such programs is low as there are thousands of startups applying for a finite amount of resources. Successful applicants will be required to hand over equity in their companies to the accelerator in exchange for services rendered.

Since the overarching goal is to scale growth rapidly, accelerators tend to be intense programs lasting anywhere between three and six months.

Understanding incubators

A startup incubator has a core focus on nurturing entrepreneurs in a collaborative and supportive environment. Incubator programs assist when required in various areas and as a consequence, do not tend to operate on a fixed schedule. The primary purpose of an incubator is to provide real-world context to the theories an entrepreneur may have learned as part of their tertiary education.

For instance, some will need assistance with their product-market fit while others need help making their business more attractive to investors. Incubators also enable startup founders to network with the founders of other startups in the same program.

Many incubator companies specialize in specific verticals. Monarq Incubator specializes in female-centric startups while KitchenCru is a food or kitchen incubator that provides commercial kitchen space and insurance, banking, and marketing assistance to budding culinary entrepreneurs.

Key differences between accelerators and incubators

Now that we have explained each type of program, let’s take a look at some of the main differences:

Accelerators, as the name suggests, aim to accelerate the growth of a company via rapid scaling. Conversely, incubators focus on “incubating” disruptive ideas and many consider them preparation for a subsequent accelerator program.
Accelerators have a specific timeframe since resources such as capital, office space, and mentorship services are finite. There is less emphasis on material resources in an incubator program, so they may last for months or even several years.
Mentorship in exchange for equity in the company is one of the reasons accelerator programs are so popular with entrepreneurs. However, this makes the application process much more rigorous and selective than in an incubator where there is more of a relaxed attitude to the selection process.
Incubators tend to be independent companies that are sponsored by universities, governments, development corporations, and non-profit organizations. In contrast, accelerators are more likely to be funded by private organizations.

How to join an accelerator?

Research and Identify Suitable Accelerators:
- Start by researching different accelerator programs that align with your industry, business model, and goals. Look for accelerators that have a track record of success and are known for supporting startups in your field.
Prepare Your Startup:
- Ensure that your startup has a clear and validated minimum viable product (MVP) or prototype. Accelerators typically work with startups that have a demonstrated potential for growth.
Craft a Compelling Application:
- Most accelerators require an online application. Prepare a well-crafted application that includes details about your team, product or service, market opportunity, traction, and your vision for the future. Be concise and persuasive in your responses.
Pitch Your Startup:
- If your initial application is shortlisted, you may be invited to pitch your startup to the accelerator team or a panel of judges. Prepare a compelling pitch that highlights your unique value proposition, market fit, and growth potential.
Interviews and Due Diligence:
- Expect one or more rounds of interviews and due diligence. The accelerator team may want to dive deeper into your business model, team dynamics, and growth strategy. Be prepared to answer questions and provide additional documentation.
Acceptance and Equity Negotiation:
- If you are selected to join the accelerator program, you will receive an offer of acceptance. Review the terms carefully, especially regarding equity exchange, funding, and the scope of services offered by the accelerator. Negotiate if necessary, but keep in mind that accelerator terms are often standardized.
Commitment and Preparation:
- Once you accept the offer, commit to the accelerator program fully. This may involve relocating to a specific location if it’s an in-person program or dedicating significant time and effort to the virtual program.
Accelerator Program Participation:
- Engage actively in the accelerator program, which typically includes mentorship, workshops, networking events, and access to resources. Be open to feedback and guidance from mentors and peers.
Demo Day:
- Many accelerator programs conclude with a “Demo Day” where startups present their progress and pitches to a room full of potential investors and partners. Use this opportunity to showcase your growth and attract funding.
Post-Accelerator Growth:
- After completing the accelerator program, continue to build and scale your startup. Leverage the network and connections you’ve gained during the program to secure additional funding, partnerships, and customers.

What’s the process to be selected within an accelerator?

Application Submission:
- Startups interested in joining the accelerator program begin by submitting an online application. The application typically includes information about the team, the business idea, market opportunity, current traction, and future plans.
Initial Screening:
- Accelerator staff and/or a selection committee review the applications to identify promising candidates. They may use specific criteria such as market fit, scalability, innovation, and the team’s ability to execute.
Pitch Evaluation:
- Shortlisted applicants are often invited to pitch their startup to the accelerator team or a panel of judges. The pitch is an opportunity for startups to make a compelling case for their business and demonstrate their ability to communicate their vision effectively.
Due Diligence:
- Accelerators typically conduct due diligence on the startups they are considering. This may involve verifying the accuracy of the information provided in the application, checking references, and assessing the startup’s financials and legal status.
Interviews and Workshops:
- Some accelerators conduct interviews with the founders to get to know them better and assess their commitment and passion for the project. Startups may also be asked to participate in workshops or exercises to evaluate their coachability and adaptability.
Selection Committee Decision:
- The final decision on which startups to accept into the accelerator program is often made by a selection committee or a group of experienced entrepreneurs, investors, and industry experts. They consider all the information gathered during the screening process.
Offer and Equity Negotiation:
- Accepted startups receive an offer to join the accelerator program. This offer typically includes details about the equity the accelerator will take in exchange for the services provided. Startups may negotiate these terms, although they are often standardized.
Acceptance and Onboarding:
- Once a startup accepts the offer, they commit to the accelerator program and prepare to start. This may involve relocating to a specific location if it’s an in-person program or engaging with the virtual program.
Accelerator Program Participation:
- Selected startups actively participate in the accelerator program, which includes mentorship, workshops, networking events, and access to resources. They work on achieving key milestones and growing their businesses during the program.
Demo Day and Graduation:
- Many accelerator programs culminate in a “Demo Day” where startups present their progress and pitch to potential investors and partners. Successful completion of the program often leads to graduation and continued support from the accelerator network.

Top Accelerators

Y Combinator: Based in Silicon Valley, Y Combinator is one of the most renowned and prestigious startup accelerators globally. It has a strong track record of success, with companies like Airbnb, Dropbox, and Reddit among its alumni.
Techstars: Techstars operates a network of accelerator programs across various cities and industries. It provides mentorship, funding, and resources to startups, helping them grow and scale.
500 Startups: Known for its global presence, 500 Startups has invested in numerous startups worldwide. They offer accelerator programs and funding to early-stage companies.
Seedcamp: Seedcamp is a European-based accelerator that supports startups across the continent. It provides mentoring, capital, and access to a network of investors and mentors.
Startupbootcamp: With programs in various locations and industries, Startupbootcamp offers mentorship, funding, and resources to early-stage startups.
AngelPad: AngelPad is a startup accelerator known for its rigorous mentorship and support. It has helped launch several successful startups, including Postmates and Buffer.
MassChallenge: MassChallenge is a global nonprofit accelerator with locations in the United States and internationally. It provides startups with access to resources, mentorship, and office space.
Plug and Play: Plug and Play is a global innovation platform that runs accelerator programs in various industries, including technology, health, and sustainability.
500 Women: A branch of 500 Startups, 500 Women supports female founders and startups led by women. It focuses on promoting gender diversity in the startup ecosystem.
The Brandery: Based in Cincinnati, Ohio, The Brandery specializes in consumer marketing and branding. It offers mentorship and resources to startups in this space.
Lisbon Challenge: Lisbon Challenge is an accelerator based in Portugal that supports startups across Europe. It offers mentorship and a network of investors.
HAX Accelerator: HAX is a hardware-focused accelerator program that helps startups in robotics, IoT, and related fields. It provides funding, mentorship, and access to manufacturing resources.
MuckerLab: MuckerLab is a Los Angeles-based accelerator program that focuses on early-stage startups, primarily in the tech and consumer internet sectors.
Alchemist Accelerator: Alchemist Accelerator specializes in nurturing enterprise-focused startups. It provides funding, mentorship, and access to a network of corporate partners.
500 Global: Another branch of 500 Startups, 500 Global runs accelerator programs in multiple countries, supporting startups with diverse backgrounds and ideas.

Key takeaways:

Accelerators programs help entrepreneurs with an MVP grow their business with advice, training, networking, and in some cases, financial support. Incubators, on the other hand, are designed to assist entrepreneurs in refining a business idea and establishing a company around it from the ground up.
Accelerator programs tend to be intense and last anywhere between 3-6 months, while incubator programs focus on creating a more relaxed, collaborative work environment that may last for several months or years.
Due to demand and finite resources, the application process for an accelerator program is much more rigorous and selective than an incubator. Incubators are normally sponsored by non-profits, governments, and other development organizations.

Key Highlights:

Accelerators vs. Incubators: Accelerators are programs designed to help startups with a validated minimum viable product (MVP) rapidly scale their growth through mentorship, capital, and networking, while incubators nurture entrepreneurs in a collaborative environment and focus on refining business ideas from scratch.
Prominent Accelerators: Examples of well-known accelerator programs include Y Combinator, Techstars, and MassChallenge. These programs are highly competitive, and successful applicants often exchange equity in their companies for the services provided.
Duration: Accelerator programs are typically intense and relatively short, lasting between three and six months. In contrast, incubator programs have a more flexible duration, and some can extend for several months or even years.
Mentorship and Equity: Accelerators emphasize mentorship in exchange for equity in the startup. This rigorous selection process is a hallmark of accelerator programs. Incubators, while offering mentorship, have a more relaxed attitude towards selection and equity.
Funding Sources: Incubators are often sponsored by universities, governments, development corporations, and non-profit organizations. Accelerators are more likely to be funded by private organizations.
Specialization: Some incubators specialize in specific verticals or niches, such as Monarq Incubator for female-centric startups or KitchenCru for culinary entrepreneurs, providing tailored support.

Framework	Description	When to Apply
Accelerator Programs	Intensive programs designed to accelerate the growth of early-stage startups through mentorship, education, networking, and sometimes funding. Typically, these programs have a fixed duration and culminate in a demo day where startups pitch to potential investors.	– When launching a startup and seeking support to accelerate growth and scale quickly. – During the early stages of startup development to gain access to mentorship, resources, and networks that can help overcome challenges.
Incubator Programs	Support programs focused on nurturing the development of new businesses or startups, providing resources, guidance, and workspace. Incubators often have a more flexible timeline compared to accelerators and may cater to a broader range of startup stages and industries.	– When incubating a new business idea and in need of support, resources, and mentorship to validate the concept and develop a viable business model. – During the pre-launch phase of a startup to refine the product, market strategy, and business model.
Structured Support	Accelerator programs offer a structured curriculum covering various aspects of startup development, including business model canvas, market validation, product development, marketing, fundraising, and pitching.	– When seeking structured guidance and education on startup fundamentals and best practices. – During the scaling phase of a startup to refine strategies, optimize operations, and prepare for growth.
Mentorship and Networking	Both accelerators and incubators provide access to a network of experienced mentors, industry experts, and investors who offer guidance, feedback, and connections. Networking opportunities within the startup ecosystem are also facilitated to foster collaboration and partnerships.	– When in need of mentorship and guidance from seasoned entrepreneurs and industry professionals. – During the fundraising process to connect with potential investors and build relationships within the startup community.
Demo Days and Investor Access	Accelerator programs often culminate in demo days, where startups pitch their products or services to a panel of investors, potential partners, and stakeholders. This provides exposure and opportunities for startups to secure funding and strategic partnerships.	– When preparing to pitch to investors and seeking funding or strategic partnerships. – During the growth phase of a startup to raise capital for scaling operations, expanding market reach, or developing new products.
Access to Resources	Both accelerator and incubator programs offer access to resources such as co-working spaces, legal and accounting services, technology infrastructure, and in some cases, seed funding or investment opportunities.	– When lacking resources or infrastructure to support startup operations and growth. – During the early stages of startup development when bootstrapping or seeking initial funding to kickstart the venture.
Industry-Specific Focus	Some accelerator and incubator programs specialize in particular industries or verticals, providing tailored support and expertise relevant to startups operating in those sectors. This industry focus can enhance relevance and effectiveness in addressing specific challenges.	– When operating in a specific industry or vertical and seeking support and guidance tailored to its unique challenges and opportunities. – During the scale-up phase to leverage industry-specific knowledge and networks for accelerated growth.
Long-Term Support and Alumni Network	Accelerator and incubator programs often provide ongoing support even after the formal program ends, including access to alumni networks, continued mentorship, and opportunities for further funding rounds or partnerships.	– When looking for long-term support and opportunities for ongoing mentorship, networking, and growth. – During the post-accelerator phase to leverage alumni networks and connections for continued support and collaboration.
Ecosystem Integration	Accelerator and incubator programs are deeply integrated into the local or regional startup ecosystem, collaborating with universities, government agencies, corporates, and other stakeholders to provide comprehensive support and foster innovation and entrepreneurship.	– When operating within a startup ecosystem and seeking opportunities to collaborate, network, and access resources and support services. – During the entrepreneurial journey to leverage ecosystem partnerships for growth and sustainability.
Tailored Growth Strategies	Programs may offer personalized support and guidance tailored to the unique needs and challenges of each startup, helping founders develop and execute growth strategies aligned with their vision, goals, and market opportunities.	– When in need of customized support and guidance to address specific challenges and capitalize on market opportunities. – During the pivot or expansion phase to adapt strategies and explore new growth avenues.