{"id":2650,"date":"2022-03-15T03:03:05","date_gmt":"2022-03-15T03:03:05","guid":{"rendered":"https:\/\/uk.legalvision.com.au\/?p=2650"},"modified":"2025-07-02T00:41:43","modified_gmt":"2025-07-01T23:41:43","slug":"difference-between-startup-accelerator-incubator","status":"publish","type":"post","link":"https:\/\/legalvision.co.uk\/startups\/difference-between-startup-accelerator-incubator\/","title":{"rendered":"What is the Difference Between a Startup Accelerator and Incubator?"},"content":{"rendered":"\n<p><span data-preserver-spaces=\"true\">If you own an early-stage startup company or have an idea for a startup business model, you may have come across startup incubators and startup accelerators. However, you may not be entirely sure what they are and how they differ from one another. This article will explain the difference between a startup accelerator and incubator, as well as the risks.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Overview&nbsp;<\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">There is no hard and fast legal definition of either an accelerator or incubator. The terms can be used in various ways depending on the context, and both have grown in popularity.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">In general, incubators tend to provide business support activities to nurture small businesses and help them develop and de-risk their business idea for later stages of growth.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Accelerators share many similarities with incubators, but they tend to have a financing element so the accelerator platform can share in the company&#8217;s growth. They are also more selective when choosing their partner businesses, often requiring businesses to apply as part of a cohort rather than on an unfixed basis.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">We will now consider the two terms in more detail.<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Startup Incubators&nbsp;<\/h3>\n\n\n\n<p><span data-preserver-spaces=\"true\">While startup incubators can provide various services depending on the platform, most tend to be physical spaces that provide early-stage companies with a supportive environment to grow a business model or business idea in exchange for paying the business incubator rent or a fee.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">This fee also entitles your startup to access their network, including angel investors and corporate finance professionals with experience working with early-stage startups. There may be frequent conferences, seminars, and other networking events designed to inspire and excite startup owners.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Incubators generally do not limit the duration your business can access their services, so long as you pay your rent or associated fees. <\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Some incubators may provide special tools or facilities, such as labs or advanced computer hardware and software.&nbsp;<\/span><\/p>\n\n\n\n<div class=\"box box--icon box--info\">\n<p><span data-preserver-spaces=\"true\">Below is a list containing some common services and perks associated with incubators:<\/span><\/p>\n<ul>\n<li><span data-preserver-spaces=\"true\">co-working spaces (similar to WeWork);&nbsp;<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">access to professional networks;&nbsp;<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">workshops and seminars; and&nbsp;<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">mentoring and training.<\/span><\/li>\n<\/ul>\n<\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Startup Accelerators&nbsp;<\/h3>\n\n\n\n<p><span data-preserver-spaces=\"true\">The most distinguishing feature of accelerators is that they tend to be platforms created by or on behalf of investors t<\/span>o<span data-preserver-spaces=\"true\"> d<\/span>evelop<span data-preserver-spaces=\"true\"> investment opportunities. As a condition of accepting a spot with an accelerator, you will usually have to sell equity in your company.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">In this sense, accelerators are similar to venture capital (VC) funds in that they are professional investors seeking to acquire equity in seed-stage businesses. However, they differ because the<\/span>ir structure resembles<span data-preserver-spaces=\"true\"> a course or competition. As a result, the platform&#8217;s selection criteria tend to be quite rigorous, w<\/span>ith limited spots available<span data-preserver-spaces=\"true\">.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Accelerators tend to be for a fixed period, and instead of paying a fee, your business will give up a portion of its equity. Your business may also receive additional cash during or at the end of the program.&nbsp;<\/span><\/p>\n\n\n\n<div class=\"box box--icon box--info\">\n<p><span data-preserver-spaces=\"true\">Below is a list containing some common services accelerators provide:<\/span><\/p>\n<ul>\n<li><span data-preserver-spaces=\"true\">capital financing (usually equity);&nbsp;<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">training and mentoring;&nbsp;<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">access to professional networks; and&nbsp;<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">business support, such as accountants and corporate financiers.&nbsp;<\/span><\/li>\n<\/ul>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\">Which One is Best for My Business?<\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">This will depend on:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span data-preserver-spaces=\"true\">the particulars of your business;&nbsp;<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">the sector you operate in; and&nbsp;<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">your business&#8217;s financial position.&nbsp;<\/span><\/li>\n<\/ul>\n\n\n\n<p><span data-preserver-spaces=\"true\">That said, speaking generally, accelerators might be better suited to businesses actively prepared and looking for outside equity fundraising. Conversely, incubators might be more appropriate for businesses that do not intend to grow quickly soon or need third-party financing.&nbsp;<\/span><\/p>\n\n\n\n\n<a href=\"#content-next\"\n   class=\"block p-4 mt-10 text-xl font-bold text-center text-white no-underline bg-gray-800 rounded-t-xl\">\n    Continue reading this article below the form\n    <i class=\"text-xl fa-regular fa-arrow-down\"><\/i>\n<\/a>\n<div class=\"px-6 pt-10 pb-12 mb-10 text-center bg-gray-100 rounded-b-xl sm:px-12 test\">\n    <div class=\"mb-8 text-2xl font-bold text-orange\">\n        Need legal advice?\n        <br>\n        <span class=\"text-lg not-prose\">\n                            Call <a href=\"tel:+448081968584\" class=\"not-prose\">0808 196 8584<\/a> for urgent assistance.\n                <br>\n                Otherwise, complete this form, and we will contact you within one business day.\n                    <\/span>\n    <\/div>\n\n    \n\n<div class=\"not-prose flex justify-center text-left 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This ensures that they are qualified and eligible to offer investment advice.&nbsp;<\/span><\/p>\n<\/div>\n\n\n\n<p><span data-preserver-spaces=\"true\">Likewise, like all equity financings, you will be selling a portion of ownership in your company to a third party. This usually means you will lose some<\/span> degree o<span data-preserver-spaces=\"true\">f control over your business<\/span>. Therefore,<span data-preserver-spaces=\"true\"> you should weigh this against the benefits partnering with an incubator may bring.&nbsp;<\/span><\/p>\n\n\n\n<div class=\"box box--warning box--icon\">\n<p><span data-preserver-spaces=\"true\">Do not feel pressured to enter into any transaction until you have had the chance for an independent solicitor (and, in some cases, an accountant experienced in corporate finance) to review the terms of the transaction.&nbsp;<\/span><\/p>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\">Key Takeaways<\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">S<\/span>tartup i<span data-preserver-spaces=\"true\">ncubators and accelerators are platforms that provide different services depending on your business&#8217;s needs and growth phase. A startup incubator is more focused on providing services in exchange for rent or some other service fee, whereas an accelerator is more like a seed-stage venture capital fund because they usually look to acquire a portion of ownership in your company.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">If you need further guidance, our\u00a0experienced <a href=\"https:\/\/legalvision.co.uk\/startup-lawyers-lp\/\">startup lawyers<\/a> can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. So call us today at <a href=\"tel:+448081968584\" class=\"AVANSERnumber dynamic-number\">0808 196 8584<\/a> or visit our<\/span> <a class=\"editor-rtfLink\" href=\"https:\/\/legalvision.co.uk\/membership\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">membership page<\/span><\/a><span data-preserver-spaces=\"true\">.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Frequently Asked Questions&nbsp;<\/h2>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1647312808826\"><strong class=\"schema-faq-question\"><strong>What is a startup accelerator?<\/strong><\/strong> <p class=\"schema-faq-answer\">A startup accelerator is a platform operated by professional investors that look to partner with seed-stage companies. In exchange for providing your business with advice, resources, and often seed funding (i.e., growth capital), they will look to obtain a portion of ownership in your business.\u00a0<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1647312814281\"><strong class=\"schema-faq-question\"><strong>What is a startup incubator?<\/strong><\/strong> <p class=\"schema-faq-answer\">Incubators provide a suite of services for startup businesses designed to motivate and stimulate business growth. They commonly include on-site workspaces, resources and networking events for a service fee or rental payment.\u00a0<\/p> <\/div> <\/div>\n<div class=\"not-prose m-feedback-prompt\">\n    <!-- Thumbs up\/down bar -->\n    <div class=\"m-feedback-prompt__main\">\n        <div class=\"m-feedback-prompt__title\">Was this article helpful?<\/div>\n        <div>\n            <!--span class=\"m-feedback-prompt__button--text\">Thanks!<\/span-->\n            <button type=\"button\" class=\"m-feedback-prompt__button m-feedback-prompt__button--yes\"\n                    data-analytics-link=\"feedback-prompt:yes\" aria-label=\"Agree\">\n                <i class=\"fa-regular fa-thumbs-up fa-3x\"><\/i>\n            <\/button>\n            <button type=\"button\" class=\"m-feedback-prompt__button m-feedback-prompt__button--no\"\n                    data-analytics-link=\"feedback-prompt:no\" aria-label=\"Disagree\">\n                <i class=\"fa-regular fa-thumbs-down fa-3x\"><\/i>\n            <\/button>\n        <\/div>\n    <\/div>\n\n    <!-- Feedback form -->\n    <div class=\"m-feedback-prompt__form\">\n        <div class=\"m-feedback-prompt__form--thanks \">\n            <div>Thanks!<\/div>\n            <p>\n                We appreciate your feedback \u2013 your submission has been successfully received.            <\/p>\n        <\/div>\n        <form id=\"contact-form\" class=\"m-feedback-prompt__form--form\" action=\"\" method=\"post\">\n            <input type=\"hidden\" id=\"authenticity_token\" name=\"authenticity_token\" value=\"9eb4f72322\" \/><input type=\"hidden\" name=\"_wp_http_referer\" value=\"\/api\/wp\/v2\/posts\/2650\" \/>            <input value=\"https:\/\/legalvision.co.uk\/startups\/difference-between-startup-accelerator-incubator\/\" type=\"hidden\" name=\"currenturl\"\n                   id=\"currenturl\">\n            <input value=\"What is the Difference Between a Startup Accelerator and Incubator?\" type=\"hidden\" name=\"currenttitle\"\n                   id=\"currenttitle\">\n            <label>\n                <!-- display on thumbs-up -->\n                <span class=\"m-feedback-prompt__feedback m-feedback-prompt__feedback--yes\">\n                    Can you tell us <span class=\"font-semibold\">why<\/span> you found it helpful?\n                <\/span>\n\n                <!-- display on thumbs-down -->\n                <span class=\"m-feedback-prompt__feedback m-feedback-prompt__feedback--no text-lg\">\n                    How can we better improve this article?\n                <\/span>\n                <textarea name=\"feedbackmessage\" id=\"feedbackmessage\" required><\/textarea>\n            <\/label>\n\n            <div class=\"m-feedback-prompt__form--error\" id=\"form-submit-error\"><\/div>\n            <button id=\"submit-contact-form-button\" type=\"submit\" name=\"commit\" class=\"m-feedback-prompt__form--submit\"\n                    data-analytics-link=\"feedback-prompt:submit\">\n                Submit            <\/button>\n        <\/form>\n    <\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>If you own an early-stage startup company or have an idea for a startup business model, you may have come across startup incubators and startup accelerators. However, you may not be entirely sure what they are and how they differ from one another. This article will explain the difference between a startup accelerator and incubator,<a href=\"https:\/\/legalvision.co.uk\/startups\/difference-between-startup-accelerator-incubator\/\">Continue reading <span class=\"sr-only\">&#8220;What is the Difference Between a Startup Accelerator and Incubator?&#8221;<\/span><\/a><\/p>\n","protected":false},"author":13461,"featured_media":559,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"2146,2039,1405,1358,2243,2332","_relevanssi_noindex_reason":"","editor_notices":[],"footnotes":""},"categories":[31],"tags":[105,608,647,648],"class_list":["post-2650","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-startups","tag-startup-founder","tag-startup-owner","tag-startup-accelerator","tag-startup-incubator"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.1.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Difference Between Startup Accelerator and Incubator | LegalVision UK<\/title>\n<meta name=\"description\" content=\"Are you a startup founder who is unsure of what a startup accelerator and incubator are? 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