As an entrepreneur, you would have certainly heard of the concepts of accelerators and incubators, which even though are easily mistaken to be synonymous, are in fact two very different things.
Both offer startups with great opportunities in the early stages and help them grow their business quickly. An added bonus is that if you have been a part of either of them, the better your chances of attracting a Venture Capitalist later on.
How do you determine which one is relevant to you? How do you select which accelerator or incubator is best for your business? How do you go about approaching one?
This week, I will be addressing these questions, the different frameworks they operate on and hope that it will help you take a step towards the right choice for your venture.
Very simply, which will be easy to remember too, accelerators ‘accelerate’ the growth of an existing start-up while incubators ‘incubate’ new ideas, business models and more.
Accelerators are more focussed on expanding your business and making it grow whereas incubators are more inclined towards new ideas and innovation.
The time frames
Accelerators always work on a set time frame, usually a few months. It is not uncommon to see a good accelerator help a startup create more business in six months than what it could have achieved in two years.
Incubators on the other hand do not operate on fixed timelines and there have been many instances where a new venture has been under the wing of one for nearly eighteen months.
Incubators usually do not offer capital and are usually themselves funded by universities, financial institutions, the government or even organizations trying to better the country’s economic development.
Accelerators however do invest in the startup in return for equity, simply because their objective is to scale business. Since they are going to be invested in your venture, the success rates of working with an accelerator is usually high.
Both incubators and accelerators offer an environment of mentorship and include ample opportunity to network by industry leaders and seasoned entrepreneurs.
Many also offer a shared co-working space where the different startups they support operate under one roof, thereby allowing access to peer feedback as well.
How to choose which one is right for you
Incubators usually just invest time and resources in your business and their reasons for doing so is that supporting local, budding entrepreneurs is part of their mandate. If you just have a business idea and want to fine tune it further with their mentorship, then an incubator is perfect for you. They will also be able to help with legalities such as intellectual property, creating a business model etc.
However, remember that it is not on the incubator to make your business an instant success so even if your startup a bit slow on growth and less scalable, you can easily work with one and leverage your association to make things right.
Getting through an accelerator is a lot more competitive and they usually only pick ventures which are scalable and can show growth within a few months. While your startup can certainly be in the early stages, preparedness is a very important factor for attracting an accelerator.
You have to invest time for the application process, have presentations, pitch notes, videos, infographics, numbers – the works handy before you apply for one. Don’t forget that you also may need to demonstrate a prototype of the product, so keep that ready before you pitch.
You will be competing for a few available slots with hundreds of startups like you, so you must put your best foot forward.
Accelerators for Startups in India:
- YES Fintech by YES Bank in partnership with T-Hub, Anthill Ventures and LetsTalkPayments
- Y Combinator – They have invested in the likes of Airbnb, Dropbox, Reddit and more. Indian start-ups funded by them include ClearTax and RazorPay
- Venture Nursery – An angel-backed accelerator focussing on media and entertainment, retail and education
- T-Labx – focussing on internet and mobile startups
- Thought Factory – launched by Axis Bank in partnership with Zone Startups
Incubators for Startups in India
- Amity Innovation Incubator – supported by DST, Ministry of Science & Technology, Government of India
- IAN Incubator – by the Indian Angel Network
- Startup Launchpad – A private incubation centre and initiative from ODW Inc which help startups across the country.
- Nadathur S Raghavan Centre for Entrepreneurial Learning (NSRCEL) – an open incubator set up at IIM Bengaluru which does not distinguish between alumni and non-alumni
- SINE (Society for Innovation & Entrepreneurship) – hosted at IIT Mumbai
- Startup Village – Based out of Kochi, it is the country’s first incubator to be jointly funded by the public and private sector.
You can also visit Startup India’s website https://www.startupindia.gov.in/ and get access to more incubators and accelerators in India.
Personally, I believe that the best way to approach an incubator or accelerator is networking. It is an important part of being an entrepreneur and you must invest the time and resources to be present at industry events and platforms or reach out contacts from even the faintest references.
Don’t hesitate to talk to people and always have an elevator pitch ready; you may never know when you need it.
Aditya Rathnam, the co-founder of Kamcord once said, “Speed is often the biggest weapon a startup has” and I couldn’t agree more.