Startup accelerator vs incubator: Which one should I choose?

Starting a business can be a difficult and complicated process. With so many different elements to consider, including fundraising, product development, market research, and more, it can be hard to know where to start.

But the good news is that there are many ways for startups to seek help and guidance.

With entrepreneurship rising across the world, the past few years have seen the emergence of hundreds of new business training programs, and all of them are specifically designed to help new startups grow and scale their ventures.

Most of these initiatives are referred to as 'incubators' or 'accelerators'. While many assume that these terms mean roughly the same thing, they actually serve distinctly different purposes, and they offer unique benefits that appeal to entrepreneurs and businesses from every sector.

To put it simply, incubators are mainly focused on building the foundations of a business, while accelerators concentrate on scaling startups and expanding their growth.

Incubators and accelerators therefore, target startups at different stages of development, and they vary according to their duration and intensity, and the types of funding they offer.

In this blog, we will go into more detail about the key differences between incubators and accelerators, and how to decide which one is right for your startup.

What is an incubator?

Business incubators support new startups that are still in the 'ideas stage'. They guide entrepreneurs through how to turn their ideas into profitable products and services, and they typically include mentorship schemes provided by experienced entrepreneurs, business experts, and industry leaders.

Some incubators also provide access to coworking spaces, office supplies, learning materials, legal advice, and networking opportunities. Perhaps most importantly, they help startups gain access to loans and funding opportunities.

Designed to take place over a long period of time, incubator programmes can sometimes last as long as several years, while others are concluded within a matter of months.

What is a startup accelerator?

On the other hand, startup accelerators are completely focused on helping new businesses achieve rapid growth as quickly as possible.

They play a crucial role in connecting entrepreneurs with investors who may be willing to provide funding in exchange for equity, and, like incubators, they expose entrepreneurs to a mix of mentorship schemes, resources, and networking opportunities.

However, unlike incubators, accelerators are aimed at startups that have progressed through the idea stage, have honed their business models, and are ready to expand rapidly.

What are the differences between an incubator and accelerator?

Before you start trying to decide whether to apply for an incubator and accelerator program for your startup, you first need to understand the differences between the two.

Stage of business development

This is perhaps the most notable difference between incubators and accelerators.

While incubators are intended for bootstrapped to pre-seed startups who are still devising their business strategies and honing their ideas, most accelerators are aimed at more established companies that already have a business model and business plan, and defined products and services.

Costs

As accelerators are generally powered by venture capitalist firms and financial entities, they normally require equity in exchange for providing funding, resources, and mentorship.

On the other hand, incubators are normally supported by academic institutions and government entities, and so they rarely charge for their services or ask for equity in return. This is very appealing to many startups, and it is one of the key advantages of choosing an incubator program over an accelerator.

Duration

Incubators last as long as it takes for entrepreneurs to turn their ideas into a fully viable business. There is therefore no fixed duration, and they can last up to several years.

In contrast, accelerator programs normally have a fixed duration of between three to six months.

Topics covered

Focused on helping entrepreneurs establish the foundation of their start-up, incubator programs cover everything from how to complete market research to how to develop successful products and how to define your business model.

However, startups completing accelerator programs are already well-versed in these topics. Accelerators are instead designed to prepare founders for all the obstacles they may face during their next stage of development, and they cover topics such as market expansion, fundraising, and how to gain and retain customers.

Acceptance criteria

Incubators are typically more lenient and flexible when it comes to their acceptance criteria, although some do favour specific types of companies.

As a generalisation, accelerator programmes receive more applications, and so they are highly selective about the startups they accept. They tend to prefer more conservative and well-established companies, rather than risky and boundary-breaking concepts.

Enlightening programs for every business

As you can see, there is no definite answer to the 'startup accelerator vs incubator' debate. Both types of development programmes offer numerous advantages for startups, and which one you choose entirely depends on the requirements of your business and the stage you are at in your business development journey.

Our Access programme offers a seamless route into Abu Dhabi's thriving business marketplace, while our specialised programme in digital assets Hub71+ Digital Assets is exclusively for startups specialising in Web3 and blockchain technology, and our ClimateTech programme Hub71+ ClimateTech is only for businesses focused on advancing sustainable innovations.

All verticals include three months of mentorship delivered by experts in relevant fields, extraordinary funding options, and priceless network opportunities with regional and global government, market and investment partners.