We casually refer to ‘incubators’ and ‘accelerators’ like they’re exactly the same thing. It’s easy to group Y Combinator, TechStars and all the rest as incubators, but the reality is that such organizations really fall into the definition of an accelerator.
That’s because an accelerator is usually defined as a program that — you guessed it — is meant to speed up the development of an idea. Say you have an idea for a startup. Maybe you’ve even started building it out. You go to an accelerator and they spend a set amount of time, usually a few months, helping you hone the idea and build it out. They introduce you to venture capitalists and mentor you. For all of this, you give up a small stake in your company.
Incubators traditionally take a larger stake, closer to twenty percent. These programs are usually more about building the infrastructure of a company than pushing forward on the idea. You still get connections, but you may stay in the program for a lot longer — years rather than months.
But people do throw the terms around interchangeably. There are programs with ‘incubator’ in the name that more properly fit the ‘accelerator’ definition.
The crucial definition is not so easy to find: you need to find out what the difference is for anyone you’re speaking to. That’s because you need to know what other people are using to split the difference between the two. You need to know what your cofounders are thinking so you can establish your strategies and decide if you want to apply to either type of program. You need to know what investors are thinking so you can make the right moves to get any capital you may need. You have to ask.
Image by Flickr user Jason Wesley Upton