What is a Business Accelerator?

by Startacus Admin

A little while ago, we discussed what exactly a business incubator was and the benefits it offered. In a similar vein, we're now turning our attention to business accelerators.

At this point, you may be thinking “What’s the difference - aren't they the same?” and whilst there are certainly similarities, they're both quite unique in their own way.

If you're curious to find out a little more, then read on...

The most important and perhaps the key difference worth mentioning between the two is finance.

Business accelerators focus on funding and accelerating your business from early stage startup (potentially still at the concept stage) to scaling and revenue generating, whereas incubators tend to focus more on mentoring, networking and in office support. All of these things are absolutely essential for a fledgling business, but when you want to start off, sometimes finance and the fear of being able to support yourself is a massive deterrent and will stop you from taking the plunge.

If you decide to take up space in an accelerator, your time is usually limited to a short period of about 3-4 months and the business accelerator will usually give you a small level of investment / pre-seed investment to help you progress. It is never usually a massive amount (but can be) but it will hopefully increase your chances of investment and venture capital from third parties outside of the accelerator.

There will be an application process, whereby you apply alongside other startups to enter that period or year's accelerator programme. Successfully shortlisted startups who are deemed to have the potential for development and growth will then enter the accelerator programme. A typical accelerator programme will often end with a demo or pitching day, where all the startups will pitch their business ideas to potential angels and investors. 

In short, a business accelerator is there to help you get your business model fully in place, start a financial domino effect and hopefully be the start of financial growth and security for your business. In return for this investment, most accelerators will expect startups to give up a little equity or share of their business.

Most accelerators will offer mentoring support from successful entrepreneurs. These entrepreneurs are usually individuals who are interested in helping out the local startup or business scene and who have proven experience in creating and building successful businesses. The support that they provide can make all the difference. After all, having guidance, expert advice and support from a seasoned pro can help you make the right decisions for your business, particularly when it's time for you to leave the accelerator. 

In essence then, if you’re still in the very early stages with your business and need a little time to refine your business plan and investor pitch, an accelerator programme may be the right path to take. 

If you'd like to find out a little more about Business Accelerators, you may also like to read:

• MassChallenge UK Finalists revealed
• 25 Startup Terms you’ll probably hear and need to understand
• Kath Preston of Oxygen Accelerator chats to Startacus

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Published on: 23rd May 2015