Every Startup Gains From An Incubator Or Accelerator Every startup can benefit from the right incubator or accelerator, if they are realistic about their needs.

By Martin Zwilling

Opinions expressed by Entrepreneur contributors are their own.


A question I often get as an adviser is whether or not to join a business incubator or accelerator as a way to move forward faster and smarter and increase the odds of business success. The simple answer is always yes, but like any other resource, finding the right one depends on your implementation stage, your own expertise, and what's available in your geographic area.

According to recent statistics from the International Business Innovation Association (InBIA), there are about 7,000 business incubators and accelerators worldwide, with over 90 percent being non-profit and focused on incubator programs for community economic development. I find that this type offers the most value to new entrepreneurs or startups in the early idea stage.

Related: 5 Questions Every Startup Should Ask Before Choosing an Incubator

On the other hand, if you can qualify for membership in a top-ranked accelerator, such as 500 Startups, AngelPad or TechStars, you will get a rigorous development program, top-quality professional guidance, and some seed funding to move you ahead of the crowd.

Most advisers agree that only serious and established entrepreneurs will likely qualify or survive the more rigorous accelerator programs, while first-time entrepreneurs at the idea or early implementation stage will benefit most from less demanding local incubator programs. Here are some of the key parameters that will help you decide where you fit in this spectrum:

1. Your commitment to the entrepreneur lifestyle.

Most incubators start their program with some aptitude and business acumen tests. If you are still "testing the waters" of starting a business, these tests and discussions with peers will give you a reality check on your passion, determination and real dedication to the startup lifestyle.

2. Direction, mentoring and resources required.

Most serial entrepreneurs are beyond the capabilities of incubators and all but the best accelerators. They already have relationships with outside experts and advisors, and should evaluate organizations based on funding potential, connection to key people and access to members of interest.

Related: Incubators Aren't Only for Tech Startups

3. Costs, returns in equity and funding access.

A few incubators and most accelerators provide some seed funding for startup entrants, ranging from $10,000 to $150,000 and expect a chunk of your equity in return. The best ones also charge an up-front participation fee for services provided. Costs may limit your interest or ability to join.

4. Credentials of the accelerator organization.

In my experience the value received from any incubator or accelerator is highly correlated to quality of the leaders and the people in the accelerator. I recommend that you do your "due diligence" with prior graduates before applying. Good facilities and support services are not enough.

5. Access to funding partners after exit.

Y Combinator was able to groom so many successful startups that they could virtually assure later venture capital investments to their graduates. TechStar graduates have about an 80 percent funding rate. The average startup has only a 3 percent chance of find funding with no help.

Once a startup decides which accelerator would be a good fit, the next challenge is the application and selection process. The process is often competitive and very difficult. The quality of the team is usually more important than the product or the business plan. Most look for diverse, fierce, coachable and execution-oriented teams first and foremost.

During the most recent cycle at Y Combinator, only 126 out of 6000 teams that applied were accepted, so incubators and accelerators can be very selective. All recommend that you be focused and specific on the market problem you solve, have a truly unique solution and be able to describe in detail how you will acquire customers. No surprises in this advice.

Related: 10 Industries Benefiting From Incubators

Thus my conclusion is that every startup can benefit from the right incubator or accelerator, if they are realistic about their current support, mentoring, and funding requirements. But the application process can be very competitive, and expensive in terms of equity and cash. Your challenge is to make the right tradeoffs, with limited resources and time. Your future as an entrepreneur depends on it.

Wavy Line
Martin Zwilling

Veteran startup mentor, executive, blogger, author, tech professional, and Angel investor.

Martin Zwilling is the founder and CEO of Startup Professionals, a company that provides products and services to startup founders and small business owners. The author of Do You Have What It Takes to Be an Entrepreneur? and Attracting an Angel, he writes a daily blog for entrepreneurs and dispenses advice on the subject of startups.

Editor's Pick

She's Been Coding Since Age 7 and Presented Her Life-Saving App to Tim Cook Last Year. Now 17, She's on Track to Solve Even Bigger Problems.
I Helped Grow 4 Unicorns Over 10 Years That Generated $18 Billion in Online Revenues. Here's What I've Learned.
Want to Break Bad Habits and Supercharge Your Business? Use This Technique.
Don't Have Any Clients But Need Customer Testimonials? Follow These 3 Tricks To Boost Your Rep.
Why Are Some Wines More Expensive Than Others? A Top Winemaker Gives a Full-Bodied Explanation.

Related Topics

Business News

'All Hell Is Going to Break Loose': Barbara Corcoran Issues Warning About Real Estate Market, Interest Rates

The "Shark Tank" star appeared on FOX Business' "The Claman Countdown" this week.

Growing a Business

The Best Way to Run a Business Meeting

All too often, meetings run longer than they should and fail to keep attendees engaged. Here's how to run a meeting the right way.


Working Remote? These Are the Biggest Dos and Don'ts of Video Conferencing

As more and more businesses go remote, these are ways to be more effective and efficient on conference calls.

Business Plans

How to Change Careers: A Step-by-Step Guide

Want to make a career change without compromising your finances or future? Check out this step-by-step guide on how to change careers to learn more.


The Best Paying Jobs in Consumer Services

Are you looking for a job that pays well in consumer services? Check out this comprehensive breakdown to learn all you need to know.

Money & Finance

What Is Annual Income? Here's How to Calculate It.

Want to know how much money your business or personal budget brings in each year? Discover how to calculate annual income in this detailed guide.