What Is a Startup Incubator?

Incubators for startups are programs designed to nurture early-stage companies, providing a collaborative environment where founders can develop their ideas. Incubators typically offer shared office space, plus access to other resources that can be expensive for new startups, like CAD software, 3D printers, and simulation software.

Many business incubators are run by local universities, government agencies, or non-profits, and their goal is to promote economic development and innovation in specific industries in their area. For example, they might focus on biotech, clean energy, or advanced manufacturing. No matter what industry, finding the right incubator can help hardware startups navigate the challenges of early-stage development.

What Is a Startup Accelerator?

Accelerators are intensive programs designed to rapidly grow early-stage companies that already have a minimum viable product (MVP). Think of it as a boot camp for your startup, pushing you to achieve in months what might otherwise take years.

Like incubators, accelerators provide a workspace and access to free resources like software, but only for the duration of the program rather than long-term. Accelerators also typically provide seed funding in exchange for equity in your company, which can range from tens of thousands to hundreds of thousands of dollars. The idea behind accelerators is to help startups scale quickly. 

Benefits of Incubators and Accelerators

It’s not always about accelerators vs. incubators – the two programs have a lot in common, too. No matter which one you choose, you can expect to see a combination of benefits like:

  • Knowledge sharing: Through mentoring and networking, you’ll gain insights from experts who’ve built successful companies. You can learn best practices and get help troubleshooting technical issues, refining your business model, or navigating regulatory hurdles.
  • Relationship building: You’ll also build lasting relationships with mentors and others in your industry. Meet potential partners, suppliers, or customers through the program’s network. Build relationships with industry leaders who can open doors for your startup.
  • Free resources: These programs often let you access expensive equipment and software without the upfront investment, allowing hardware startups to iterate on designs quickly without breaking the bank. You can also take advantage of discounted services for things like legal, accounting, or marketing.
  • Talent attraction: Business accelerators and incubators both let you join a community of driven entrepreneurs and skilled professionals. You’ll attend networking events where you can meet potential co-founders and top talent who want to work with innovative startups.
  • Funding opportunities: One of the biggest benefits is that you’ll be introduced to investors who are actively looking for promising startups. Some programs even offer direct funding or connections to grant opportunities.
     

Incubators vs. Accelerators: The Main Differences

Let’s get down to it: It’s time to discuss accelerators vs. incubators so you can decide which one is right for you.

Growth Stage

Incubator programs are perfect for startups who are at ground zero. You’ve got a brilliant idea for a game-changing product, but you’re not quite sure how to turn it into a business. Maybe you’re still figuring out timelines, tinkering with prototypes, or exploring different markets. Incubators provide the time and space to figure it all out.

Accelerator programs, on the other hand, are for startups that have already taken off. You’ve got a working product, some early customers, and a solid business plan. Now you’re ready to hit the gas and scale up fast.

Funding

Startup funding is an important consideration. Incubators typically don’t provide direct funding. They’re often backed by universities or government programs, so they’re more focused on nurturing ideas than writing checks. But they’ll still provide free resources and help you connect with potential investors.

Accelerators usually offer some seed funding in exchange for a small equity stake in your company. They’re often run by venture capital firms looking for the next big thing. Both can help you get in front of investors, but accelerators are more likely to have direct connections to funding sources.

Number of People

Business incubators and accelerators both focus on early-stage startups, but not exactly the same stages. Incubators often accept solo entrepreneurs or very small teams. For example, you might be an engineer with an innovative idea for a new type of sensor, but you haven’t yet brought on a business co-founder. An incubator can give you the support to develop your idea further and potentially find team members.

Accelerators typically look for startups with at least a small team. For instance, you might have a technical founder who developed the product, a business-focused founder handling strategy and operations, and potentially a third founder focused on sales or product management. This team structure shows that you’re ready to divide responsibilities and scale quickly.

What You'll Learn

Incubators for startups focus on the basics: You’ll learn how to validate your product idea through customer interviews and market research. You’ll get guidance on creating and testing prototypes, often with access to necessary equipment. Incubator programs will teach you how to develop a business model canvas and understand your target market.

Accelerator programs focus on scaling your existing business. You’ll learn advanced fundraising strategies, including how to structure deals and negotiate with investors. They’ll teach you about customer acquisition at scale, often bringing in experts on digital marketing or sales. You’ll also learn about how to build a team and company culture as you grow.

Mentorship and Networking Opportunities

Both accelerators and incubators help you make connections, but in different ways. Incubators offer flexible mentorship from diverse experts, helping you tackle early-stage challenges. Networking happens naturally as you work alongside other startups and attend various events.

Accelerators provide more structured mentorship focused on rapid growth. You’ll work closely with assigned mentors to refine your business model and prepare for fundraising. Accelerator networking is fast-paced, with a tight-knit startup cohort and opportunities to pitch to investors at demo days. 

Length of the Program

Incubators support the full process of taking your idea from a sketch on a napkin to a market-ready product, so they typically run for 1 to 5 years. Hardware startups often have complex development cycles, and the longer timeframe means you can go through multiple iterations of your product and business model.

Accelerators for startups are more fast-paced. They’re designed to compress years of growth into just a few months. They can be intense, but there’s a purpose: To fully prepare you for the fast-paced world of high-growth startups. 

Application Process

All of these differences between accelerators and incubators mean that the application process differs, too. For incubator programs, you’ll submit a detailed description of your product idea, explaining the problem it solves and why you’re uniquely positioned to solve it. But you probably won’t need to submit much more than that, like a business plan.

Applications for accelerator programs can be more involved. They often require a pitch deck outlining your business model, market opportunity, and growth strategy. You’ll need to show metrics demonstrating traction, such as user numbers or revenue growth. You should also be prepared to explain your team’s background and why you’re the right people to execute on this idea.

How to Choose Between Accelerators vs. Incubators

The discussion of incubators vs. accelerators comes down to understanding where you are in your startup journey and what you need to succeed. Here are some questions to ask yourself:

  • Where are you in your startup journey? If you’re still in the idea phase, an incubator is probably your best bet. If you have a working product and early customers, an accelerator can take things to the next level. 
  • Do you need funding? If you need some seed money and are okay with giving up a small slice of your company, an accelerator might be the way to go.
  • Do you have a strong team? Can you build one? If you don’t have a team yet and you’re not quite ready to build one, an incubator is probably the right choice.
  • How much time can you invest? Incubators give you time to breathe and develop at your own pace. But if you’re ready to eat, sleep, and breathe your startup for a few months, you might thrive in an accelerator.
  • What’s available? Can you relocate? Take a look at what’s available in your local startup ecosystem. Sometimes, the best option is the one that’s closest to home.

Remember, there’s no one-size-fits-all answer. Accelerators and incubators are made for different situations, goals, and needs. Whichever you choose, you’re taking a big step towards turning your startup dreams into reality. So take a deep breath, assess your options, and get ready to take your hardware startup to the next level.