Startups

Beginners Guide to Incubators and Accelerators

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Having a business plan is core to any new business and startup founders should focus on product development, business ideas and have a business model that outlines how the business plans to scale-up. Achieving funding for early stage companies is crucial to ensure their development and entrepreneurs should develop a funding and development strategy. In this article we will discuss the differences between startup accelerators and incubators that can help early stage startups navigate through this web to establish a business strategy and plan.

Accelerator vs. incubator

What is the difference between accelerator and incubator?

The key difference between startup accelerators and incubators is in the name. Where something accelerates it moves more quickly and where something incubates it develops. As such, a startup incubator program helps entrepreneurs refine and develop their business ideas, building the company from the ground up. A startup accelerator program on the other hand helps early-stage companies that already possess a minimum viable product (MVP) to grow at an increased rate by providing them with education, resources and mentorship. Startup accelerators

Startup Accelerators

Startup accelerators can be seen like springboards. While a company and its product might grow organically, the involvement of a startup accelerator will help the company reach height considerably faster. Accelerator programmes often last between 3 to 6 months and operate over a set time frame. Such programmes provide founders with advice, training, mentoring, networking opportunities with and industry experts might often provide financial support. These networking opportunities might also help founders consider potential partnerships with other businesses. The idea behind these programs is to build the business to the point where it is ready for investment and has infrastructure and plans to make the product scalable. Accelerator programmes assist startups in taking the next step by giving them access to investors and relevant networks to begin their journey into seed investment and seed funding.

Capital is also important at this stage and many accelerators will provide venture capital for a small share in the business. For example, TechStars will provide capital in exchange for 10% of the company's equity, Y Combinator will take 7% and Startup Bootcamp with take between 6-8%.

To enrol on a business accelerator programme, startups should look at the application process of different providers. This will typically include an application, assessment and interview. MassChallenge recommend that throughout the application process, founders and co-founders should write clear and concise answers that allow room for future conversation. Business accelerator programmes take in businesses in cohorts and are competitive and cyclical. Accelerators usually require that an MVP has already been validated, either through a handful of paying customers or via free users who see value in the product and demonstrate that the idea has product market fit. In return for its input, such programmes will often receive a small share in the business.

How to find an accelerator for your startup in the UK

There are a number of startup accelerator programmes across the UK. Click on your city below to find the programme nearest to you:


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Startup Incubators

Business incubators differ from accelerators in that they are more appropriate for solo founders with unvalidated ideas. Incubators focus more heavily on formulating a business model and team over a longer period of time, typically 1 to 5 years depending on the nature of the idea. Incubators offer mechanisms to help a growing startup. They will help businesses save on rent via co-working space or office space and also offer mentor schemes and networking opportunities. Mentors are crucial in giving you advice and guidance, such as on the importance of protecting your intellectual property, and they will help founders develop and protect their business.

Incubators might also give you close contact with venture capitalists who might consider funding your ideas, adding it to their venture capital firms' portfolio of existing companies. Equally, networking opportunities might give you exposure to angel investors who would consider fuelling your initial ideas. Incubators are a good idea for first-time founders of early stage businesses. When considering which incubators to apply to, you might want to consider programmes that have verticals, such as healthcare, as they may have a more fitting network for your business. In contrast to accelerator programmes, incubators do not operate on a cohort model and typically are nonprofit.

Having a great business idea is a fantastic start but unfortunately your ideas are only the very tip of the iceberg. If you do not have a coherent business plan, connections and funding even the best ideas will struggle. Choosing programmes and plans which will provide guidance and advice are a great way to give your iceberg strong foundations.

How to find an incubator for your startup in the UK

There are a number of startup incubator programmes across the UK. Click on your city below to find the programme nearest to you:

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The opinions on this page are for general information purposes only and do not constitute legal advice on which you should rely.

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