Startups seeking help to get their business off the ground have a number of options when it comes to funding and support – from meetup groups all the way up to engaging VC funds.
Another increasingly popular option is choosing to join an accelerator or incubator. There are now 59 such schemes in the UK, according to Telefónica, with 12 incubators and 24 accelerators in London.
Although different, accelerators and incubators often get lumped together. In this article we will explain the differences between the two and provide some advice on the various pros and cons. We’ll also list some of the top schemes in the UK and provide links so you can apply.
What is an accelerator?
Startup accelerators are fixed-term, group programmes that include mentorship and training and end in a public pitch event or demo day.
Accelerator programmes all differ, but they tend to work by getting startups to apply for a three or four month scheme based within the host company’s offices, during which time they receive mentoring and guidance.
The company may choose one or two startups to partner with. They can also invest in them in return for a stake, or subsume the startup into the host company.
- An opportunity to work with a top company, learn from them and get access to their customers
- Access to support and funding
- Refine business model
- Can boost likelihood of attracting investment further down the line
- Can feel like a ‘winner-takes-all’ exercise
- Watch out for the host company’s terms e.g. exclusivity
- Huge variety in quality across different accelerators so do your research
Here are some of the top tech accelerators in the UK:
- Entrepreneur First
- J Labs (plus other L Marks incubators – read more here)
- Oxygen Accelerator
- BBC Worldwide Labs
- Ignite 100
What is an incubator?
The main purpose of an incubator is to help startups to grow. They are collaborative programmes which help people solve problems associated with launching a startup by providing a space to work, seed funding, mentoring, training and other benefits.
Incubators differ from accelerators in a number of ways. They tend to allow startups to physically base themselves within the incubator for far longer – months or even years. They are also more likely to be run by non-profit organisations like universities, government bodies or civic groups.
- Long-term support including office space
- A collaborative environment where you can learn from other startups
- Investors may take larger share of the business in return for longer, more in-depth support and investment
- Programmes can drift without time limits and clearly defined expectations
Here are some of the top tech incubators in the UK:
- The Imperial Incubator
- Open Data Institute
- EcoMachines Incubator
- Google Campus
- University of Manchester Innovation Centre
Here’s what the experts say
“Big corporates have scale. If you are a B2B startup working with a large corporation in your vertical, you can pilot your product and gain insights from their customers. That is a huge advantage,” says Gary Stewart, director of Telefónica’s startup accelerator Wayra.
“However, entrepreneurs need to approach accelerators just as they would an investor. They need to do their research, check their portfolio and check the pros and cons involved,” he adds.
“A great idea, when paired with a focused team, is far more likely to raise angel and Venture Capital funding and accelerators can be a great way to refine their model, whilst widening the net for entrepreneurs to partner with A-grade talent,” George Whitehead, chairman of the Angel Cofund, says.
"Accelerators can be brilliant, but they certainly differ in terms of output, focus and - in some cases – quality,” says Ben Fletcher, chairman of Growth Builder.
“The top accelerators attract the best companies and the best mentors, but I'm not sure not all accelerators deliver the same benefit. It's definitely a case of caveat entrepreneur.”