Entrepreneurs Stepping Into The Startup Space

Category: Entertainment

Presentation Description

No description available.


Presentation Transcript


Entrepreneurs stepping into the startup space are often exposed to an entirely new business world. They are no doubt brave hearts as peddling their new ideas, may have a background in finance, but often find themselves lost in conversations with people throwing around jargons like angel investor, co-founder, venture capital, seed funding, and the list is pretty long. Another misconception that happens from early entrepreneurs is the use of incubator and accelerator interchangeably as synonyms, which is understandable but incorrect.


Both of these programs, namely incubator and accelerator, provide guidance to startups, as well as help advance their business model and strategies. The main goal of them is to groom the startup to become valuable in the eyes of investors. However, the key differences are present between accelerators and incubators. The differentiation between the two becomes more apparent while examining the selection and investment process. Incubators support startups stepping into the world of business in the beginning stages of building their company. The startups may have a business idea to bring to the marketplace, but they lack in execution process of their business model and direction to transition from innovative idea to reality.


Accelerators help grow the existing companies with an idea and business model in place. These programs build upon the startups’ foundations to make them presentable to investors and key influencers. Incubators invest time and resources to help advance local startups. They aim to generally create jobs or find solutions to license intellectual property. Startups are a channel to achieve both. Incubators have less pressure to deliver startups that can grow fast. Nurturing and supporting local startups is part of their charter. This is the reason even a slow growing or less scalable business constitutes a good incubator candidate.


Accelerators use a more conventional and formal business model for entry into their program. Those who participate must apply for a select number of slots in the program. Accelerator programs are very competitive as the accelerator must select the top startups from across the country. Those top startups are scalable, investable and have to show an ability to grow rapidly within months. These two programs, namely both incubators and accelerators, create an environment of collaboration and mentorship. It enables the startups to share a space, as well as have access to a host of resources and peer feedback. Both of them also offer mentorship from seasoned entrepreneurs and business experts.


Usually, incubators do not provide capital to startups. They are often funded by universities or economic development organizations. Incubators also don’t usually take an equity stake in the companies they support. On the other hand, accelerators do invest a specific amount of capital in startups . That they do in exchange for a predetermined percentage of equity. For this investment, the accelerators have a bigger responsibility in the success of the startup. Entrepreneurs should look for the right fit while deciding which program is right for their startup. Most startups could benefit from being in an incubator, but fewer are a fit for an accelerator.

authorStream Live Help