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Accelerator vs. Incubator – Differences and Similarities

When you enter the fascinating and colorful world of startups, suddenly a whole new realm opens up and the possibilities seem endless. If you have an excellent business idea, chances are high that you can receive the kind of mentorship you’re looking for and even get the funds needed to help your company get started. In order to do that, you need to join an accelerator program. Or was it a business incubator program that can help? What’s the difference?

The short answer to this question is that both can come to your aid, only in different ways. That’s right, even though these two terms are often used as synonyms and even have a few common elements, they couldn’t be more different in their methodologies. If you’re one of those people who always use them interchangeably, don’t worry about it, because it’s hard to keep up with the newfound business lingo at the beginning of your journey.

We have your back and we’re here to clear the air! Firstly, we’ll discuss the common features so you can see for yourself why these two terms are so often believed to be synonymous. Then we will present their unique characteristics so you’ll never confuse them again. Without further ado, here’s everything you need to know about accelerator and incubator programs:

The similarities

Both incubators and accelerators have one real aim at heart: to help your company become more valuable. This is done in a myriad of different ways, but mostly it involves providing guidance to reach that said goal. Both offer access to a productive, shared environment, and all the resources and tools that you can use to make your business thrive.

By receiving feedback from peers, getting into collaborative projects with like-minded entrepreneurs, and getting solicited advice from professionals regarding your business plan and future strategies that should be implemented, both accelerators and incubators are basically trying to give you wings so you can fly.

Incubator programs

As the name suggests, an incubator program is there to help you in the earliest stages of your business. If you have a brilliant idea but no clue how to set things in motion, incubators will help you take the first steps on your entrepreneurial journey. They do not have a set deadline by when your business needs to make it on its own, so an incubator can actually mentor startups for quite a long period of time, which can even last over 18 months.

Their goal is to support local ideas and help local startups turn their ideas into reality, and there’s not too much pressure on the amount of time a business needs to “make it.” Since incubators are generally financed by universities or various local economic organizations, they don’t actually fund businesses. They also don’t take an equity stake in the startup businesses that they help out, this is mostly a characteristic of accelerator programs.

Startup accelerators

Like incubators, accelerators also describe the type of activity they do in their name. They basically ensure that an already established company with an identified business model goes through rapid growth with the help of the accelerator’s mentorship program. Unlike incubators, business accelerators have a set timeline that can last anywhere between 3 to 6 months, during which your startup needs to prove that it can make good use of the capital the program provides.

Since accelerators provide money to startups in exchange for equity shares in the companies, the pressure is much bigger for them to help build a profitable business once the deadline is reached. At the end of the program, startups and companies have the opportunity to present their businesses to potential investors. While this might seem like an easy and straightforward process, you should know that the competition to get into accelerator programs is quite fierce, to say the least. You already need to have a set business model in place (an idea is not enough), and it needs to be not only scalable, but also ‘investable’ with the potential to grow rapidly in a short amount of time. Formal applications need to be sent in, pitches need to be made, and even if you think you have the best business model in the world, you still might not make it into the set number of chosen ones, since a nationwide selection is involved.


Now that you know the ins and outs of both types of programs, it’s time to do a bit of introspection to see where your business stands at this exact moment. If you’re at the very beginning of your entrepreneurial journey without a set direction, then incubators can put you on the right path towards success. If you already have an established business model and are looking for a bit of financing to help your business get off the ground, then you should definitely check out accelerator programs. Whichever path you may choose, make sure it’s in line with your business stats and your future goals.

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