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Launching a business

What’s the Difference between an Accelerator and an Incubator?

Burgess COMMENTARY

Peter Burgess

ACCELERATORS, RESOURCES, THE WATCH ... What’s the Difference between an Accelerator and an Incubator?

The terms are used interchangeably, but the two are not the same. In fact, they’re very different.

Both offer office space; incubators allow you to stay longer.

The keyword for accelerator is ‘action.’ For incubators: ‘function.’

Accelerators have a stake in your success, and will do everything they can to see to it that you are successful, even after you’ve been through the initial program (many entrepreneurs are not aware of that): an investor is an investor, and a good accelerator is invested in you from start to eventual exit.

New York has a plethora of co-working spaces (which can also offer help, depending on who else is in the space, and some investors hold office hours there), several accelerator programs and a few incubators, NYU Poly, inSite and WeWork Labs being among the better known.

Companies that come out of incubators have been known to get funded: a good company is a good company, no matter where their offices happen to be.

Reddit, dropbox, sendgrid, taskrabbit and airbnb all came out of accelerators, and this that’s a very abbreviated list.

Are these programs critical to your success? Not necessarily, but they can and do help you to turn what your concept into a viable business, complete with value proposition and a path to revenue, clearly stated. Accelerator programs are an excellent option for early stage entrepreneurs to consider because they offer a vast array of benefits that will literally propel your startup forward. They offer classes to help you get your business investor-ready, and industry/subject matter experts as mentors are available to help when you get stuck.

Investors also pay attention to companies that go through these programs: they’ve been pre-vetted. Then, come Demo Day, the investors come to you.

Starting any entrepreneurial endeavor is like jumping out of an airplane before you know that the parachute fully works. Something can always go wrong. With accelerators, good to know there’s an instructor there, and you know he/she’s got your back.

In following through with our discussion about accelerators, AlleyWatch has an event coming up on this very topic that we would love for you to attend:

AlleyWatch and StartupOneStop are pleased to present:

Accelerators and How They Can Benefit Your Company, March 12, 2013

There are important deadlines are coming up with key New York-based accelerators. Featured will be representatives from three NYC-based accelerators (Murat Aktihanoglu, ER Accelerator; Mark Wachen, DreamIt Accelerator; Kelly Hoey, WIM). They will introduce themselves and tell you about their programs. Then you’re welcome to ask whatever questions you’d like. This will not be your typical panel event. We’ve limited the number of attendees, too, to help give everyone a chance to ask his or her questions – and get the answers, straight from the source. Find out for yourself what the differentiators are, and which one might best suit you.

Our final panelist is Doug Krugman, (WebThriftStore), a serial entrepreneur and former VC, who decided to launch his latest venture by going through an accelerator program (ER Accelerator). There must have been a reason for it. Come find out – and hear about accelerator programs, from both sides of the equation.

Register here, and get your questions ready.

Bonnie Halper is Editor-in-Chief of AlleyWatch and also writes and curates the StartupOneStop.com newsletter, which focuses on startups and entrepreneurs, and is currently being read is 50+ countries around the world.