Startups know that connecting, networking and collaborating are key to success. Accelerators, incubators and coworking spaces all facilitate interaction in different ways. So how do you know what is right for you? The answer is, of course, it depends.
To start your evaluation process, you need to know how each works and what value they offer. A description of each is provided below.
You have to apply to an accelerator. Once accepted, startups typically receive three to four months of benefits including:
- a workspace for their team
- small amounts of seed capital in exchange for an equity stake in the company (averaging about $25,000 for roughly 6% of the company, according to Professor Yael Hochberg of MIT Sloan School of Management)
- mentorship (from experienced entrepreneurs, investors or other experts)
- formal networking opportunities
- introductions to resources, such as investors or mentors
But there are other models, too. Springboard Enterprises is a virtual accelerator and resource hub for women-led businesses in technology, media and life sciences. The program focuses on the talent of the entrepreneur as well as the enterprise, and includes in-person and virtual access to relevant expertise. While they don’t provide financial support, companies recruited to participate have access to Springboard’s global expert network while they grow, as well as beyond the exit of their company.
To potential investors, big-name customers and executive team members, graduating from a top accelerator is the equivalent of receiving an Ivy League degree.
If joining an accelerator sounds like a fit for you, check out this list of the best programs according to Forbes magazine.
Incubators provide early-stage companies with a number of benefits in exchange for a small equity stake (5-15%) or a low-to-no upfront fee for benefits such as:
- a workspace
- business development opportunities including legal, accounting, marketing and intellectual property training.
- access to a vetted network of resources, such as mentors, angel investors and venture capitalists.
Some incubators are independent, while others are sponsored or run by VC firms, government entities and major corporations, among others. Typically, there is an application process or companies are referred to the incubator by trusted partners. Incubators can be focused on a specific market or vertical, such tech, or they can be general in scope. Incubators can have a geographic preference or recruit nationally and internationally.
If incubators sound like a fit for you, visit the International Business Innovation Association.
Coworking spaces offer a shared working environment for people not employed by the same organization. They are an alternative solution to the isolation that work-at-home professionals and independent contractors frequently feel.
Coworking spaces are also attractive to startups and small companies that don’t know their long-term space needs and don’t want to make a long-term real estate commitment. Coworking spaces offer:
- a shared workspace
- fast and easy start up
- access to coffee, a kitchen, printers, conference rooms
- affordable support staff
- the ability to quickly scale up or down as the needs of your business change
Some coworking spaces offer an occasional educational event, but they are more an excuse for networking than formal education. Coworking is for people who are interested in the synergy that comes from working with other entrepreneurs and go-getters who value collaboration and organic collisions.
Relationships made in coworking spaces can lead to collaboration and mentorship, but that happens informally. It is not part of the plan as it is with accelerators and incubators.
If you think coworking might be a good fit for your team, check out Symmetry’s list of the top 100 coworking spaces in the U.S.
So there you have it: Three ways to approach getting the right workspace and support for your new business. Talk to us on Twitter and let us know where you plan to land: @Ventureneer and @myturnstone.