So which comes first – accelerator or incubator?
Answer: Accelerators. It’s simple: accelerators are precursors to incubators. Accelerators support a cohort of very early-stage, growth driven businesses (and very early stage innovators) through an intense process of education, mentorship, and financing over a period of a few months, culminating in a public event or “demo day.” The accelerator program may run for only three or six months. For many types of businesses, three or six months is not sufficient time to create a successful business. Yes, it certainly can be sufficient for app companies, but many other types (from software to medical device) need more time and assistance to get on the path for success.
This is exactly where incubators fit: they can be an excellent next step for companies that have completed an accelerator program. Why? Incubators provide services—including mentoring, advice from subject matter experts, connections to a network of resources, access to markets and customers, preparation for funding and access to an investor network—over the course of an 18 month to 2 or 3 year period (depending upon the type of business). Rather than having a cohort-based program, incubators are individualized for each company’s specific needs. Companies that graduate from incubators have obtained their first customers and sales, and early funding. They are more mature when they graduate.
So, if you are considering whether an accelerator or an incubator is the right program for your community, university or corporation, consider that you may need both. And, if you have an accelerator, consider connecting to an incubator (or creating your own incubator) to assist those companies that need more guidance post-accelerator. You’ll be more likely to have companies with successful outcomes.
Guest Author: Carol Kraus Lauffer
Principal, Business Cluster Development
Since joining Business Cluster Development (BCD) as a Principal in 2002, Carol has helped 60 clients across the U.S. to plan and create successful strategies and programs that support entrepreneurship, create new businesses, move innovative products to market, and build strong ecosystems, resulting in economic diversification, job creation, business engagement, technology commercialization, and economic growth. Prior to joining BCD, Carol was Managing Director of Panasonic’s corporate, venture-backed incubator in Cupertino, California and a Principal in its $100 million venture fund.
Carol has more than 30 years of experience in economic development and management. As a dedicated member of the industry, Carol has served on association boards, including the International Business Innovation Association (InBIA, formerly NBIA) and the International Economic Development Council (IEDC). She held the post of Chair of the Board of Directors of InBIA in 2010-11. Carol is a course instructor for both organizations’ certification programs, and a frequent speaker on best practices for business acceleration/incubation, entrepreneurial support organizations and targeting technology clusters for economic development. In April 2015, InBIA honored Carol with the President’s Award for Lifetime Achievement, recognizing her significant contributions to the association and the industry. Carol earned a Master of City Planning from the University of Pennsylvania and a BA from Northwestern University. You can find more information on Carol and BCD here.