Incubators and Accelerators

Around the world there has been an explosion in the number of accelerators to the point where those not in the know might think that this is all relatively new.

In fact, the concept of accelerators morphed from incubators and can be traced back to the 1980s and the accelerator model came to life in the mid-2000s.

But let’s take a step back. What is the difference between an incubator and accelerator?

An accelerator provides support in terms of seed capital, mentoring and training for a short period of time — usually no more than four months — in exchange for an equity stake. The start-up has already developed the idea and needs support to get to the next level.

An incubator will bring in an external management team to help manage an idea that was developed internally in order to get the product or service to market. Generally, the incubator seeks a bigger portion of equity, as more work is involved in developing the idea in order to turn it into a thriving business model.

Today, there are hundreds thousands of incubator programs around the world. Idealab are credited with bringing the incubator model to the tech world back in the mid 1990s whereas Y Combinator and TechStars pioneered the accelerator model in the mid-2000s.

Along the way there have been an explosion of incubators and accelerators. Some have had success, while others have failed spectacularly. The problem often lies when the teams have little experience in running companies in that particular segment of the market, or start-ups working with the wrong individuals/companies.

Top universities such as Harvard and Stanford now offer incubator and accelerator programs and there are top-tier programs all over the world, but one of the key components for selection must be the team on offer and the ability they have to drive the product or service to a successful business level.

There have been different models out there such as the Founder Institute, which offers tuition plus equity, while organisations such as General Assembly, TechHub and a sea of others have created valuable revenue generating modes combining entrepreneur education and collaborative workspaces.

In Australia, there are accelerators and incubators in almost every state. There is PushStart, Venture Incubator Space, BlueChilli, iLab, Gold Coast Innovation Centre and AtomicSky amongst a wealth of others.

For the full list go to

Most people accept that most start-ups will fail but what is less discussed is that most accelerators will also fail. And in the journey to failure, most accelerators will fail to add the necessary magic to a start-up to push it into the rarefied ‘successful start-up quadrant’.

And so like choosing your founding partner, or choosing the right venture capital partner, choosing the right accelerator is critical. Think carefully about whether you need an accelerator and if you do be very clear on the gaps that you are looking to fill. And then do your homework.

It is imperative you get the right mix at the beginning because this is crucial to the success or not of your idea. Don’t just think that because the accelerator or incubator has good facilities or its mentors have a good reputation that they will help bring your business idea to fruition, as they still might not be the right fit for you.

Speak to as many people as you can in the field along with other start-ups. As long as you are not a competitor, other start-ups should be willing to offer some helpful advice.

You need to decide which incubator or accelerator program will drive you and your team to develop your idea to its full potential and whether you can see yourself working with them into the future because a valuable business connection at the beginning of your business, should remain so throughout your journey.