TLDR

  • Goal - The goal of accelerators is typically to “accelerate” the growth of existing companies whilst incubators “incubate” ideas or early stage companies, placing a focus on disrupting and innovative ideas.
  • Structure & duration - Accelerators are far more structured than incubators meaning they are shorter and intense.
  • Alignment - The structured nature of accelerators mean that cohorts are strongly aligned, beginning and graduating (through ‘demo days’) at the same time.
  • Eligibility - Incubators tend to only accept companies or ideas that come through certain channels or in certain industries. Accelerators are open to anyone but are much more selective and acceptance rates are competitive.

Accelerators and incubators are terms often used interchangeably and presumed to mean the same thing. However, there are a number of defining features that differentiate accelerators from incubators that founders should be aware of.

Goal

The goal of accelerators is to “accelerate” the growth of an existing company i.e. to achieve two years of business building in the space of a few months. Incubators on the other hand “incubate” existing ideas or companies, focusing on stimulating innovation around disruptive ideas and supporting nascent companies in becoming stronger before becoming independent.

Structure & duration

One of the most notable features that distinguishes accelerators from incubators is their limited duration. Accelerators last anywhere between three to twelve months whilst incubators are much more open-ended, lasting anywhere between one to five years.

The established, set time frame and finite duration of accelerator programmes means accelerator programmes are far more structured compared to incubators.

This structured nature of accelerator programmes creates a strong alignment between participating companies/individuals, with cohorts starting and graduating together. This often results in the formation of notably strong relationships and communal identities.

Graduation on accelerator programmes typically takes place through a demonstration day (‘demo day’) where companies pitch to an audience of investors. Incubators on the other hand are not cohort-based and companies ‘graduate’ on an ongoing, ‘ad hoc’ basis.

Eligibility

Incubators also tend to have set criteria for who can join and usually only work with companies and ideas that come through certain channels or operate in certain industries. However, if you meet these criteria, incubators tend to be less selective than accelerators and accept participants on an ongoing basis.

On the other hand, the application process for accelerator programmes occurs once or twice a year and is open to anyone. This does, however, mean the threshold for being accepted onto accelerator programmes is high and competition for places is stiff - acceptance rates for Y Combinator, for example, are approximately 1-2%.

Funding

Finally, accelerators are funded by an existing company whilst incubators tend to be independent. Incubators can, however, have connections to VC firms, universities, angel investors, major corporations or government bodies.

If you’ve spotted any inaccuracies in this post, please let us know. We want to make sure we are offering the most update to date and accurate information. Feedback is always welcome.