Startups All You Need To Know About Them
Start-up accelerators are mentorship programs that provide early-stage companies or start-ups who already have a minimum viable product with enough resources and mentorship needed to boost the company’s growth. This mentorship program helps start-ups or companies achieve what would have usually taken a couple of years to accomplish in a couple of months.
On the other hand, start-up incubators are mentorship programs that help entrepreneurs solve some of the major problems commonly associated with running a start-up by providing resources like workspace, seed funding, refinement of business ideas, and so on, amongst others.
Start-Up Accelerators, The difference in a nutshell
Knowing what a start-up accelerator is isn’t enough; there are still a couple of relevant pieces of information to consider before deciding on whether accelerators would work for a start-up or not.
Is an accelerator program right for your start-up?
An accelerator works for start-ups that already possess a minimum viable product that has been validated in some way. This might mean anything from a crowd-funding MVP, a product with paying customers, to early signs of product-market solid fit.
Though not much, some businesses would prefer to grow slowly over time and do not require additional funds to get there; those businesses do not need accelerators. Instead, accelerators are for businesses in need of guidance from experts, financial support, and general growth.
For an accelerator program to be right for your start-up or company, the said start-up has to be ready for growth, impressive investors, focus, to concede some control over the start-up, relocation.
Duration of Startup Accelerators
Accelerators always have a fixed duration and are always intense and fast-paced—some last for 3 to 6 months. The entire start-up spends its full time focused only on the company during the program.
NOTE: Each program is unique; thus, the duration might vary.
Accelerator programs are usually very challenging to get into, usually having between 45 to 90 slots annually. Yet the top programs are even more challenging than regular ones, usually accepting less than 5% of their applicants.
While most programs have specific requirements, these requirements still vary depending on the program. Therefore, it is advisable to do a ton of research and preparation before applying for this program.
Most companies arrive at a decision fairly quickly, with some deciding a few hours after the interview. Here are three general steps each application process follows:
- Filing out questionnaires: it is best to show how researched and knowledgeable you are about your start-up.
- A rapid-fire interview: Mock interviews help a lot here. The interview usually lasts for 10 to 15mins.
- Acceptance: If accepted, you’d begin the program with others of the same cohort.
Start-Up Incubators, All You Need To Know About Them
A start-up incubator provides a variety of services like management training, office space, venture capital financing, and so on, amongst others. Here are a couple of relevant pieces of information about incubators.
Is an Incubator program right for your start-up?
A start-up incubator works for start-ups that need mentorship and affordable office space. Although they help start-ups solve design issues and technical issues when building products, they also teach how to run, lead and build a successful team.
It is wise to consider if long-term commitment is practical for your start-ups. Only a small percentage of incubators would be willing to provide equity investments to start-ups. Incubators help start-ups get past the early idea stage and into further stages.
NOTE: Incubators do not put as much emphasis on success as accelerators do this; if your company is at a stage where it needs help getting past the idea stage, then incubators are the netter option.
Duration of a Startup Incubator
Incubators, unlike accelerators, are usually tailored to a business’s unique needs. It also follows a much less rigid schedule than accelerators. They typically last for anything between 6 months to 5 years. However, start-ups can stay in an incubator for as long as it takes to grow to a sustainable level.
The application process of incubators is much less rigid and competitive than that of accelerators. Most incubators usually focus on advancing local start-ups and improving a set area’s business ecosystem. There are a few steps involved in the application process, which are:
- Filling out an application form: most forms include questions about previous business activities.
- Short interviews: This is usually in the form of a brief video call.
- Decision process: Unlike accelerators, the decision-making process of incubators can last for a couple of weeks. The time frame also varies.
NOTE: Start-ups who need financial aid can always apply for that after getting accepted.
ACCELERATOR OR INCUBATOR: HOW DO YOU CHOOSE?
This choice is dependent on two main factors:
- What the start-up requires.
- The stage of the start-up.
Accelerators are best for start-ups in need of financial support, expert guidance, and rapid growth.
On the other hand, Incubators do not provide either of the above; they are usually best for start-ups at earlier stages or solo-first-time founders that do not mind the extra time required.