Accelerator versus Incubator: 5 Differences that Will Impact Which Model You Should Choose

Accelerator and Incubator programs both help to grow startups and scale-ups. Though often used interchangeably, the two terms should not be confused. What is the difference exactly, and what can these programs mean for your organization?

By partnering with bigger companies, startups and scale-ups get the opportunity to grow. As I described before, we are speaking here of mutually beneficial schemes.

The two most common forms of these kinds of collaboration are Accelerator and Incubator programs. In many instances, there is confusion about the difference between the two. So, to decide which program can offer you the most, let’s first take a look at the structural differences:

1. Accelerators are funded by an existing company. Incubators are often independent but can have connections to venture capital firms or funds, or universities.
2. Accelerators are aimed at accelerating companies and scaling them up. Incubators focus primarily on stimulating innovation (they incubate disruptive ideas). To make things a little more complicated, in some cases, Incubators function as preparation for Accelerators.
3. For Accelerators, a clearly delineated time frame of a few months is usually set. Incubators are longer term—in many instances even taking years—and are more open-ended.
4. At Accelerators, mentoring by the legacy company is a distinctive part of the program. Furthermore, the established firm will often buy a small equity stake in the startup or scale-up. These are two of the reasons why being accepted into an Accelerator program has a high threshold. On the other hand, Incubators focus on larger numbers and are less selective.
5. Accelerators have a much more structured program than Incubators and try to create a kind of alignment between the startups. Incubators are more focused on creating an environment for co-creation.

An Accelerator program close to my heart is Startup Bootcamp that has several specific programs worldwide. RevelX partner Matthijs Rosman and I are both mentors and early investors in the Bootcamp’s Amsterdam branch. This intense, 3-month program helps ambitious early-stage tech-founders shake-up industries. They are accompanied by an international network of 2,000 alumni founders, corporate partners, and investors.

A nice Incubator program for game developers is offered by Dutch Game Garden. This program focuses primarily on the business aspects of game development. As part of the agenda of Incubation Days, every month a different topic is discussed including marketing, business strategy, team management, finance, legal, and production.

As a C-level executive in a bigger organization, you may want to work with startups and scale-ups yourself. In that instance, you have to decide if an Accelerator program or an Incubator program better fits your objectives. Below are some questions to ask yourself:

• How much budget do I have for this project? What is the affordable loss—both in the short and the long term?
• How rapidly do I want to see results?
• How do I measure results? (As a side note, “results” don’t have to be measured in profit because a startup program is also an excellent form of public relations.)

If your answers focus on quick, concrete results, you should choose an Accelerator program. Choose an Incubator program if you have a longer-term vision in which the public relations aspect also plays a major part. Or, if you don’t care about definitions and want to do both, then mix them up… Please feel free to contact me if you want to know more!