So you think you have a business idea that is just aces; the cat’s pajamas—but what now? Starting a new business venture can sometimes make a person feel as though they are jumping into deep waters. Each decision you make in your business is critical, but those early choices can mean the difference between sinking like a rock versus swimming like a shark.
The great news in starting a business nowadays is that there are more pathways that offer assistance to help get entrepreneurs off the ground. Such new pathways include utilizing an incubator or participating in an accelerator.
It seems like there may be some confusion over the difference between an incubator versus an accelerator, I suppose it doesn’t help that some people use the two terms interchangeably and both typically require an application and approval process to participate in. In the context of this article we will use the term “accelerator” to refer to seed accelerators and not second-stage accelerators. Both incubators and accelerators provide guidance and mentorship to help start-ups and entrepreneurs grow, but with key differences in their focus.
An incubator typically focuses on helping the business find its identity and becoming self-sustaining. An incubator will usually offer free office space and free or discounted office services to help a business ease into its “big girl pants” of self-sufficiency. Businesses that utilize an incubator should take advantage of their lower operating cost while in the incubator, but prepare for life outside of the womb. Unfortunately some start-ups never learn to stand on their own without their “incubator crutches” and quickly fail once they move out of the incubator.
If an incubator is teaching a business how to stand on her own two feet, then an accelerator is putting that girl in a dress, makeup, and heels and teaching her how to dance! Accelerators are typically shorter in duration than an incubator; usually just 2-4 months and focus on the strategic, operational, and organizational efficiencies of a company. In accelerators, investors provide expertise and take an equity stake in a company while working to quickly ramp-up a company for rapid growth. Accelerators can help entrepreneurs achieve radical growth, but the flip-side to consider is that you will likely have to give up some ownership in your business. Accelerators are usually looking at high-growth industries and are searching for the next Twitter or Facebook.
So before you load up your rocket and head for the moon, checkout the different pathways out there and see which one may give you the best launch pad to take-off from.
More incubator and accelerator programs have been starting-up across the country. If you need assistance on finding a program near you please contact SourceLinkDallas, if you prefer simply email SourceLinkDallas.