Startups seeking help to get their business off the ground have a number of options when it comes to funding and support - we detail a number of them here.

Another increasingly popular option is choosing to join an accelerator or incubator. Research from Nesta, the innovation foundation, estimates that as of 2017, there are 205 incubators and 163 accelerators operating in the UK, which support between 3,450 and 3,660 new businesses each year and offer financial support to the tune of £33 million annually.

Image: iStock/Rocket01
Image: iStock/Rocket01

Startups and incubators are often lumped together, meaning confusion surrounds what differentiates them. The emergence of co-working spaces-cum-incubators also blurs the lines further.

However, there are some important differences that are vital to know if you're thinking of taking your startup down this route. In this article, we will explain the differences between along with the pros and cons of each.

In addition, we list the top schemes in the UK and provide links so you can apply with a click of a button.

What is an incubator?

The main purpose of an incubator is to help startups at a very early stage 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.

To access a full directory of startups and incubators in the UK, see this page from gov.uk.

Pros:

  • Long-term support including office space
  • A collaborative environment where you can learn from other startups

Cons:

  • 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:

What is an accelerator?

Startup accelerators are generally fixed-term, group programmes that include mentorship and training and may end in a public pitch event or demo day.

One of the main differences between incubators and accelerators is that accelerators are generally considered to be tailored to later stage startups, whereas incubators are more suited to very early stage business ideas. Therefore, accelerators are more focused on providing help to scale up a fledgling business.

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.

Research from Nesta also found that accelerators are generally less reliant on public funding than incubators, and are more likely to be funded by corporations. The same research also found that although incubators are spread evenly across the UK, half of accelerators are concentrated in the capital. However, Birmingham, Bristol, Manchester and Cambridge are also heating up in terms of the number of accelerators setting up shop.

To access a full directory of startups and incubators in the UK, see this page from gov.uk.

Pros:

  • 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

Cons:

  • 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: