What are Incubators and Accelerators?
A start-up incubator program is a collaboration that assist start-ups in their early stage help nurture their business. They help the start-ups with issues commonly associated with running a start-up by providing them with infrastructural support and network support through incubation centres. Support is provided in terms of consultation, assistance with business plan, growth acceleration, product prototyping, mentorship and seed funding. Their investment structures vary from loans to equity and just mentoring and assistance, not to forget the immensely valuable connections they offer.
Similar to incubators, accelerators offer a range of support services and funding opportunities for start-ups. However, they have a greater focus on companies and usually provide their services in return for start-up equity. With greater focus the participation of accelerators is maximum in the start-ups and the entire assistance program is of fixed duration. Business accelerators will generally offer all of the services offered by a business incubator. The key difference is the level of hands-on involvement by accelerator management which should increase the chances of success.
Why do start-ups need Incubators & Accelerators?
Entrepreneurs in the nascent stages of their start up business have to worry about 10 things and have limited time at disposal. Therefore, they need to focus on the matters of importance and think about what they can do better than their competitors. Where Incubators can provide guidance and other logistic requirements and networks, accelerators hand-hold your process of starting a business with dedicated support. Depending on what stage your start-up is in, entrepreneurs can choose from both.
Therefore, the first few questions to ask yourself is: What support services your business needs? What are the logistics required for your business? What about mentoring and networking? Do you have any previous experience? Careful assessment each of these factors along with your relocation limitations should considered when narrowing down your choices.