I’m working on a project at Booth on innovation spaces, which naturally took to me to the topic of incubators and accelerators. These terms are frequently used interchangeably; but after doing some research, I’ve found that there are important and useful differences.
INCUBATORS VS. ACCELERATORS
Incubators tend to work with earlier stage start-ups while accelerators often work with companies that have made more progress and frequently already have customers and revenues; incubation programs last longer, typically between two and five years, while accelerators focus on rapid development over a shorter time frame, typically 3-9 months; and incubators, in addition to taking a fairly large equity stake (10-20%), charge fees, while accelerators usually don’t charge a fee and take a smaller equity stake (usually single digit, in the 6-9% range). Both types of programs tend to provide capital, access to mentors, advisors, and professional services, and share a goal of helping start-ups become viable businesses.
Check out this list of incubators and accelerators that are focused on the food, beverage, consumer goods, and agriculture spaces. And if you’re an entrepreneur looking to launch a new CPG business, you might enjoy this list of U.S. culinary incubators.