Business development programs such as Incubator or Accelerator programs are used to support startups and scale-ups with resources and mentorship. Entrepreneurs can take advantage of the training and financing options provided by incubators and accelerators who also facilitate opportunities for collaborations with public or private sector stakeholders. 

Business Incubators and Startup Accelerators

Business incubator programs support early-stage startups or brand-new companies to expedite profitability and success by providing valuable resources such as free office space, mentorship, a collaborative community, equipment and networking opportunities with potential funding sources such as angel investors and venture capitalists. 

Startup accelerator programs expedite growth of existing companies that have developed business models and validated products in the marketplace. They provide mentorship, free coworking spaces, legal services to help secure intellectual property, collaborative work ecosystem and access to industry influencers and potential investors. They also provide their ventures seed investment and take equity stakes in the companies.  

Both Incubators and accelerators can be divided into applicability for startups in their ‘ideation’, ‘launch’ or ‘growth’ stages ensuring that whichever stage a startup is in, they are able to find a program that suits them. 

a. Ideation stage startup incubators

These are ideal for aspiring entrepreneurs with a business idea and seeking cofounders or early startups with a team. They assist founders in navigating the foundations of entrepreneurship and commercializing their ideas. They also offer programs for startups involving world-class training and coaching, accountability and discipleship and financial access for a startup journey. In Kenya, MBM Africa and Sinapsis are ideation stage startup incubators for flexible and adaptable founders willing to venture into various sectors. 

b. Launch stage startup incubators and accelerators 

Antler Kenya, Villgro Africa, The Land Accelerator, Nailab, MEST, @iBizAfrica, Catalyst Fund, Pangea Accelerator and The Baobab Network are some of the launch phase incubators and accelerators in Kenya with each focusing on different sectors and having different programs and strategies for growing businesses. Generally, they enable founders validate their business models, determine a go-to-market strategy, build brand recognition and acquiring customers and preparing for seed or next-round investment. They help entrepreneurs become investment-ready and prepare a presentation deck and proposals that will entice investors, consumers and potential partners. 

c. Growth stage accelerators in Kenya 

They provide startups with entrepreneurial skills, access to resources and a network of global investors that will allow them to expand their businesses. They may be sector agnostic where they assist startups expand by helping them develop a deeper understanding of their own businesses, articulate growth challenges and identify and craft a growth strategy. Some of growth stage startup accelerators in Kenya include Multichoice Africa Accelerator by C3, iHub and GrowthAfrica Accelerator.  

Incubator and accelerator programs are highly selective and the application pool is competitive. Entrepreneurs must meet an incubator’s specific criteria and submit a viable business plan as part of the application process. They also require evidence that one’s business has high potential to scale up at an exceptionally fast pace. 

Differences between Business Incubators and Startup Accelerators 

They both offer early-stage companies support and mentoring. The following are the key differences between these business development models: 

a. Stage of the venture 

Incubators focus on early-phase startups that are in the product-development phase yet to have a developed business model. They focus on speeding up growth of existing companies that already have a minimum viable product in the hands of early adopters with an established product-market fit. 

b. Seed funding 

Incubators do not typically invest capital into ventures but may ask for an equity stake in exchange for the valuable resources they provide. It is standard practice for accelerators to provide ventures with a seed investment in exchange for an equity stake in the company. 

c. Program timeline 

Incubators take a slower timeline taking one to two years to develop their ventures with the goal to incubate a business idea long enough to build a successful company. Conversely, accelerators run like a startup bootcamp and tend to have a set time frame of only three to six months. 

Should you use an accelerator or an incubator 

Specific needs of the company have to be accessed to help in deciding which business development program is best by identifying whether one is an early or late-phase startup. One needs to: 

a. Identify funding needs 

Incubators are an ideal choice for businesses undergoing setting up and building up their business models while accelerators support businesses looking for seed investment to help them scale up. 

b. Assess the sate of their business’s product 

Incubators are ideal for new businesses with no established viable business model that are still developing a product idea. Accelerators tend to be ideal for early-stage existing companies that already have a minimum viable product.  

c. Determine the timeline of your business 

Incubators help to support businesses over a longer period of time while accelerators work with businesses to scale up rapidly within a matter of months. 

Conclusion

Kenya’s well-established reputation as a pioneer in Africa’s innovation industry presents great future prospects for startups. At Netsheria International LLP, we are excited to see the Kenyan startup ecosystem improving and expanding further via knowledge-sharing and collaboration between local and foreign firms, government bodies, institutions, and startups through these accelerator and incubator programs in Kenya.  

The post Business Incubator VS Startup Accelerator appeared first on Netsheria.