Incubators, accelerators, and coworking spaces are three common terms that are often used in the startup community. All of these options are beneficial for the development of a new business. Each of them has something to offer depending on your needs and possibilities. So what’s the difference between them and which one should you choose?
Incubators are suitable for beginner startups as they foster new ideas. They usually work without a set schedule and have the focus on mentoring and helping to launch the business. To join the incubator, you need to apply for the program which usually lasts for a year.
Incubators help your business to grow, provide a decent workplace and give you a chance to network with the like-minded people. They are generally industry-specific and can give a science side to your idea.
Some incubators are located at universities providing you with the extended research possibilities. You may also access scientific equipment at those spaces. However, they do not always provide funding. And not all of the incubators ask for a part of equity. As they are industry-specific, they sometimes lack interdisciplinary collaboration.
Accelerators provide services in exchange for equity. They also have programs you should apply for. Please note that you’ll have to overcome competition as only about 2% of applications get accepted. Such programs are usually intensive and quite short. Nevertheless, they will ensure a fast growth of your business.
Those who have already launched their companies but want to establish a network and attract capital investments will find these programs more beneficial. Accelerators work according to a set schedule; they provide mentorship and expect results within a defined period. They give you seed investment, workspace, intensive mentorship, and networking. They also coach you on how to develop your business quickly.
Coworking spaces are the locations that provide a workspace for a reasonable price. They also offer shared office facilities and ensure a high level of security. Here you can do creative work on your own or with your team no matter how big it is. You can also collaborate with other creators working next to you. Coworking spaces do not provide any seed investment, but they also don’t ask for your equity.
You can use all three types at different stages of your startup development if you want to. There is no need really to stick to only one. When choosing where to start, pay attention to the next factors:
The level of your startup development. use the incubator if you’ve only started but haven’t launched the company yet. However, if you are more interested in attracting the investors and building partnerships, accelerators can be more useful to you.
Your requirements. If you need investments badly, accelerators will help you out. They will also give you the access to a network of their alumni where you’ll be able to build strong partnerships. But they will require a part of your equity.
Your plans and expectations. Coworking spaces may be a good idea if you need a flexible creative space to implement your creative ideas. Here you can also find partners and other service providers that can help you.
There also some pitfalls you should avoid during the decision-making process. The first one is thinking that there is one ultimate “success recipe” for every startup. It’s not so – you should discover it yourself instead. Indeed, accelerators and incubators may be helpful for your startup. But when picking one, research the alumni of the program you are interested in and think out of the box.
You should also decide whether it is necessary to give a part of your equity. You might find investors on your own instead without losing profit. Industry-specific locations can be very competitive. And low collaboration is possible between multidisciplinary creators.
Whether you choose a coworking space, an accelerator or an incubator, keep the focus on your startup and outsource the administrative burden to experts. There are advantages in each of the three options so be sure to benefit from the most suitable one!