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Tanul Mishra

The author is CEO, Afthonia Labs

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The Difference Between Incubators And Accelerators

Here are some measures that can help you decide which is the right fit for your startup

Venture capitalists, Angel Investors, Incubators, and Accelerators are ubiquitous terms in every Entrepreneur’s daily life. While liquidity is critical to most entrepreneurs and raising money is high on the agenda for sustainability and scalability, decision making involves much more than a fund raise and this is where mentorship, network access and having a champion for your company also become essential choices to make. 

Incubators as well as Accelerators provide a safe ecosystem for startups, are network connectors and provide capital access. Often times, however, the terms ‘Incubators’ and ‘Accelerators’ are used interchangeably and sometimes are viewed as competing with each other without any real reflection on what strength each can bring to the table for the entrepreneur. Granted, there’s more than one area where an overlap exists between the two and it’s hard to draw a defined line that separates the two, but there is merit in knowing the difference. It is important for an Entrepreneur to help them choose rightly between an Incubator or an Accelerator, so as to maximize their gain from who they choose to engage with. Here are some measures that can help you decide which is the right fit for your startup.

  • Going from idea to reality:  Much like for a newborn, an incubator can be a life sustaining device for Startups in their early stages. They provide the necessary handholding in key areas of business as well a safe and secure ecosystem to grow in, helping them build sustainable and viable business models. Incubators help create a prototype from an idea on paper, test it, build a business model around it and help taking it to the market. An incubator does not necessarily need an MVP to back the business 
  • Duration of engagement: Incubators are usually more open ended or have a longer mentoring framework, like the Kerala Startup Mission which is almost a 11 month programme. Accelerators on the other hand are more fixed term in their engagement cycle, in some cases maybe short term (y combinator, Startup Bootcamp), cohort bound and intense
  • Access to Capital: Incubators are more like entrepreneurial hubs that help with capital access as well as provide a Co-working space at minimal or no cost.

Accelerator programmes invest capital as a part of their programme. 

  • Selection process:  While Incubators usually have a more personalized process based on inviting applications, interviews and one on one short listing process, Accelerators use an application based process. 

According to a report by IT industry body National Association of Software and Services Companies (NASSCOM) and Zinnov Consulting, India now has the third-highest number of startup incubators and accelerators in the world after China and the US. Further, the Government of India has also undertaken many measures to further this conducive ecosystem to address the challenges faced by start-ups, promoting collaboration between government, industry and institutions, to offer them innovative and sustainable solutions.

Finding the right fit from this available mentor ecosystem is a vital consideration and one that requires application and deliberation. When well-researched and well-informed, the decision to bring on-board their expertise, access to capital and network, can enable smart decision-making and sustainable growth of any enterprise. 

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house


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