Startups

The entrepreneur’s guide to accelerators and incubators

Source | Teach evaluation asia .com  |  BY:Bhaskar Choudhuri, Marketing Director India

Around the world, accelerators and incubators have become a popular option for early-stage startups serious about growth, longevity and bucking the dire statistics. Roughly 90% of startups fail and these supportive programmes are seen as a way to boost a venture’s chances for success. But as is the case with many emerging phenomena, researchers have failed to keep up with the varying models and structures of today’s accelerator and incubator market. This leaves entrepreneurs with substantial gray areas when determining which programme will help their early-stage venture rise to the top.

The terms “accelerator” and “incubator” are often thought of as synonymous. Although some programmes take a hybrid approach, accelerators and incubators typically differ in duration, approach and revenue models—making them far from one-size-fits-all solutions. Whether you’re a startup considering the next step or an executive keen to stay up-to-date on the business ecosystem, consider this your ultimate primer on today’s accelerator and incubator industry.

 

The accelerator and incubator markets today

Founded in 2005, Y-Combinator is widely considered the first accelerator and quickly spawned the rise of similar programmes that connected early-stage entrepreneurs with investors and mentors who, in theory, turbocharge their growth. Techstars launched in 2006, and the accelerator market has been growing rapidly ever since.

Europe currently leads the way with the largest number of accelerators globally. Yet the unexpected growth of Latin American accelerators has made the region an up-and-coming launchpad for startups and investors in the region have already infused more than $31M into local startups. Asia, and Singapore in particular, are also seeing major accelerator action as governments and corporations tap into the booming startup markets and their accompanying revenue potential. In the U.S., the number of accelerators has doubled each year between 2008 and 2014. And while Europe boasts the most accelerator programs, the U.S. and Canada are investing nearly 50% more in businesses growth. Globally, accelerators have invested more than $191M in more than 8,800 startups

Although the growth of the incubator industry has been slower, it’s undergoing a revival. Incubators that once saw members as simply a paycheck keeping them afloat are expanding to offer real value. With nearly 7,500 incubatorspopping up in major global cities in Europe, Asia, the Middle East, the U.S. and South America, these programs have helped myriad companies take root and grow. Their tools, resources and services, along with their network of angel investors, venture capitalists, and experienced entrepreneurs, provide startups with a backbone of support as they navigate the often stormy waters of a saturated startup market.

Accelerators and Incubators have seen a drastic rise in popularity, and more growth is on the horizon. Global business needs have given way to hybrids that offer a combined model of the best features of both, such as access to discounted legal services, workshops, mentors and seminars. Individuals and business giants are seeing the value of supporting future business growth, and are launching more support programs to revolutionise the future startup landscape. The competitive nature of accelerators means they’ll give more weight to startups in specialised and emerging niches such as Big data analytics, Fintech, IoT and Artificial Intelligence.

 

What to know about accelerators

Accelerators, as their name implies, take growth seriously, and typically condense a 2-year scaling process into just a few months. These programs are intense and not for the faint of heart. As Tech Republic puts it, these startup greenhouses are designed to place the most promising sprouts in the right environment for healthy, fast, guided growth.

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