Business Accelerator vs. Business Incubator
Business incubators and business accelerators provide advice, guidance and various forms of support for businesses in the startup phase. The key difference between them is that business accelerators, as the name suggests, compress the timescale for starting up by operating as a type of boot camp. Business accelerators claim to help entrepreneurs hit the ground running; business incubators nurture the business in its startup phase, allowing it to develop at its own pace.
Business incubators provide new businesses with office space and shared facilities, such as telecommunications systems and Internet connections, in a dedicated building. According to The New York Times, there are around 1,200 incubation centers in the United States, as of 2011. Entrepreneurs can also access advice and guidance from professionals such as accountants, marketing consultants and business advisers who are associated with the incubation center and act as mentors. Entrepreneurs typically stay in an incubation center for three to five years, although there is no maximum period.
Many business incubators are run by nonprofit organizations such as government groups and economic development agencies. Some universities offer specialist incubation centers where entrepreneurs can tap into the research activities on campus or take existing research and turn it into a commercial business. Some incubation centers in different regions offer industry-based facilities. In Silicon Valley, for example, the focus is on technology startups, while in Kansas, farming incubators are common, according to USA Today.
New businesses find that rents are lower in incubation centers -- typically 25 to 50 percent less than commercial rents, according to USA Today. They benefit from networking opportunities, the mentoring and professional advice available and the contacts with other entrepreneurs that provide a stimulating environment for growth. Sponsors of incubation centers see the benefit of developing successful businesses that will bring further employment to an area and contribute to local economic growth.
Business accelerators share some of the characteristics of incubators, offering professional advice and guidance to startups. However, the incubation period is very short and intense. According to Bloomberg Businessweek, accelerators aim to turn business ideas into prototypes or products that are ready for market in a matter of months. Sponsors provide initial funding and expertise to small groups that can demonstrate a great product idea. In return, the sponsors take a small equity stake in the new business, which might be around 6 percent, says Bloomberg Businessweek.
急速PC28彩票The emphasis in business accelerators is on rapid growth and a successful product launch. At the end of the period, the entrepreneurs have the opportunity to make a pitch to venture capitalists to obtain further funding. A business accelerator is therefore more suitable for startups that want to reduce time to market, rather than grow gradually. The government sees benefits of increased employment and improved competitiveness for the country and has set up a program called the Startup America Partnership to provide support for business accelerators.
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