As more peple venture into entrepreneurship, so does the number of tech hubs increase. According to Global telecoms industry body GSMA’s Ecosystem Accelerator, an increasing number of investors and innovators are committed to growing the local startup ecosystem in Africa, and this has seen the number of technology hubs across Africa double in less than a year. The report stated that a total of 314 tech hubs and incubation centers were recorded in July 2016, an increase from the 117 centers that were recorded by the World Bank in 2015.
For entrepreneurs looking to get fund and scale their startups, these tech hubs have become a go-to place, offering accelerator and incubator programmes where startups are provided with work space, mentorship and funding opportunities.
If you’re a first time founder, you’ll probably be nursing the idea of being part of such community. Before you take the big leap of applying for any of these programmes, you should first understand the key difference between an “accelerator” and “incubator”. This would help you know which would be right for your startup.
They both offer entrepreneurs good opportunities. Founders get help to quickly grow their business and they often better their chances of getting Venture Capitalists to invest in their startup at a later point. Still, they both have different frameworks for startup success.
Startup Incubators
Incubators specialize in growing new and early-stage businesses. They are a good way of moving a business from pre-startup into its start-up phase before acceleration, and will begin to introduce you into the world of entrepreneurship.
They can be perfectly described as business schools, taking entrepreneurs with promising ideas and teaching them how to run a successful startup. They offer resources like office space, legal counsel, and even seed investment – typically in exchange for a small amount of equity.
Startup Accelerators
The most distinct difference between accelerators and incubators is the time frame of each. Accelerator programs are a tool for rapid-growth companies. They work with startups for a short and specific amount of time, usually from 90 days to six months. While incubators can be seen as tool for the “childhood” of a startup, accelerators can guide entrepreneurs from “adolescence to adulthood.”
The primary function of accelerators is connecting startups with mentors, guidance, and resources. Accelerators also offer startups a specific amount of capital. In exchange for capital and guidance, accelerators usually require a very little percent ownership of your company.
Accelerators or incubators?
Which is right for you?
If you’re really not sure where you sit, then ask the company that you’re applying about what they are and what they do. It’s important to also know that even incubators and accelerators may misuse the terms, or may have different goals. Be sure that it can benefit your business, and avoid wasting time applying for things that won’t be of benefit to what you’re doing.
