Incubators vs. Accelerators vs. Coworking Spaces
Coworking Spaces, Incubators, and Accelerators are frequently mentioned in the startup world. These three names may appear to represent the same thing to most people, but there is a significant difference between them, and your choice will be based on your demands and requirements from an office space. Startups are all seeking for the greatest spaces available so that they may grow into multi-million dollar enterprises, and each of the three provides them with unique surroundings in which they can thrive.
Because everyone will be commuting on a regular basis, one of the most crucial things is to choose an office space that is easily accessible for both you and your staff. Depending on what you require from your office space, you’ll have to choose between a coworking space, an incubator, or an accelerator.
For example, if you are a Nairobi-based business, you will want to hunt for a coworking space, an incubator, or an accelerator, and you will need to know the differences between all three. To help you understand them better, we’ve broken them down into sections so you can make an informed decision.
Coworking Areas
Coworking Space is one of the most well-known types of office space accessible today for startups. Almost every major city has one or more coworking spaces to assist startups in their growth, and every company, from a small startup to a giant corporate, is looking to take advantage of the coworking spaces’ flexibility and cost-effectiveness.
Coworking spaces are designed to give businesses with flexible and effective options without putting their finances at danger. They’re a fun and effective option to avoid a standard lease office while still gaining access to a large network of peers in the same field.
Coworking spaces are designed to give businesses with flexible and effective options without putting their finances at danger. They’re a fun and effective option to avoid a standard lease office while still gaining access to a large network of peers in the same field.
There is no set amount of time that a startup or business must work out of a coworking space. However, some coworking spaces provide incentives to businesses who are willing to sign a long-term lease. This is most common among entrepreneurs that are confident in their ability to make a profit. The rent is paid every month by those who want to run their businesses out of the coworking space.
Joining a coworking space does not require a lengthy application process. All you have to do is look for a coworking space in your area and inquire about available seats. Then you simply deposit the funds and begin working from the office space.
The sole disadvantage of operating out of a coworking space is the lack of financing possibilities. All of the startup’s stock remains with the founders, and you’ll have to find an investor on your own if you need seed money.
Accelerators
Accelerators are designed to help startups accelerate their growth. They invite only the most qualified startups, and each accelerator has its own set of requirements. Most accelerators, for example, would seek for firms that have a product but are not yet ready to grow it up. After that, these accelerators will invite these startups and connect them with venture capitalists and investors. One of the key reasons why businesses are usually wanting to join an accelerator program is for the fantastic networking opportunities.
When it comes to joining an accelerator program, there are some procedures that must be followed. There are periods during the year when the weather is very pleasant.
In exchange for the benefits and financial aid that accelerators provide to entrepreneurs, they demand equity in the company. In the United States, accelerators like as TechStars and Y-Combinator provide up to $300,000 per team while keeping less than 10% of the equity.
Being a part of the accelerators has a number of advantages for the entrepreneurs. Obtaining an organized program of procedures, market education, an investor network, an alumni database, and mentorship are among these.
Incubators
Incubator programs assist founders in coming together to form a firm. Incubator programs also assist businesses in obtaining their initial consumers, and they frequently operate in a specific specialty.
Incubators assist entrepreneurs in transitioning from an idea to a minimal viable product, as well as advancing to the market stage. There is no way of knowing how long the entire procedure will take, so it might take anything from six months to a year.
It’s difficult to get into an incubator program, and each one has its own application process. They are more likely to accept lone founders, and there are very few incubator programs that allow teams to participate.
The capital money is provided by incubators to the founders, but it is never deposited in its entirety. The first capital commitment might be as low as $5,000 or as high as $100,000. This is dependent on the incubator’s size and the startup’s requirements. The incubators demand a 5-12 percent equity stake from the entrepreneurs in exchange for the seed money.
Incubators are a benefit to the startup business and are extremely beneficial to entrepreneurs. The founders are not required to pay anything to join the program, work out of their office space, or use any of the amenities. Instead, they are given space and funding to start their firm, as well as a network of mentors to help them along the way.
