What are business incubators?
Incubators are participatory programs designed to help new entrepreneurs succeed. It assists the entrepreneur in providing training, guidance and problem solving associated with his startup, and provides him with access to financing by linking it to investors. The incubators also provide shared workspaces that facilitate the entrepreneur’s work and enable him to contact other entrepreneurs by creating a mini-entrepreneurial environment for exchanging experiences. Thus, the first goal of the incubators is to make the emerging project successful and develop it.
A new concept has recently emerged in the field of business incubators, a virtual incubator like the one Startup incubator. Most of these services are provided by default via the Internet and without the need to be in a physical location. This will reduce costs and allow more entrepreneurs to join.
What are business accelerators?
Accelerators are very similar to business incubators in terms of providing the same services, but the fundamental difference is the duration of incubation and the quality of incubated projects. Where business accelerators offer their programs in a specific period, usually six weeks or three months; thus, the program will have a start and an end for a specified number of emerging projects that will start on the journey together during this period.
What is the difference between business incubators and business accelerators?
So the concept of business accelerators and business incubators has many similarities and points in stock, but there are fundamental differences as well. The common point is that incubators and accelerators are primarily aimed at helping startups, and new companies grow by providing assistance and advice. Its services can be in the field of marketing or financial management and the provision of a consulting or supervisory staff specializing in the subject of corporate law or expanding relations between large investors who support the project as a whole. It also provides specific financial support for projects.
The essential difference between Accelerator and Incubator is the duration of incubation and the quality of incubated projects.
Incubators keep projects incubated for more extended periods (more than six months and up to years), and promising projects are chosen but less mature and require a lot of development, modernization, experiences and support to grow.
As for accelerators, they only choose up-and-coming and semi-completed projects in terms of maturity, mechanism of work and profit, and their ability to reproduce. Therefore, she wants and embraces these projects for a period of between one and six months. So that it accelerates its growth dramatically in this period. So, you are short to work in a few months, which requires a year or years if the entrepreneur worked alone !!
Thus, the selection criteria are more stringent in the accelerators. For example TechStars Speeding
Only ten projects choose from among the thousands of projects that apply for incubation !!
Many of these incubators in the Arab world are supported by governments to provide their work free of charge.
If these accelerators and incubators are private (not subsidized by the government), they will provide their services based on obtaining a percentage of the company (the pilot project) Equity. Or, less often, it is in the form of a loan.
Because accelerators provide services in less time, they usually get 6-8% of the company.
As for incubators, because of the extended support period and the increased risk (due to the presence of fewer criteria for accepting incubation), their percentage may reach 20%.