| An incubator gives a team space to grow its startup and an active network of like-minded entrepreneurs who can offer support through advice or potentially lucrative contacts. | Purpose: | Accelerators push startups to hone their business approach and figure out quickly if it should be pursued or scrapped. |
| They are usually backed by a university or government-supported group. | Who runs them | They are often backed by industry groups or a group of venture capitalists for profit. |
| This varies in that participants "rent out" an office space that can cost anywhere from zilch to a couple hundred dollars a year. Usually no stake in equity is required, but some higher-profile incubators take a big cut of the companies, about 20 percent or more. | Funding | Each company is given some seed money and in return the accelerator gets a single-digit percentage of equity that's usually 5 to 7 percent. |
| There is often no end date. Once in an incubator, a business can stay there until it grows too big for the space or if it fails. | Duration | These have specific start and end dates. It usually is a three-month program. |
| Most incubators are much more accepting than accelerators. However some higher-profile ones only allow ideas from people who already have established a business relationship with the incubator. | Exclusivity | Though accelerators are increasingly popular, the most top-tier ones have an acceptance rate between 1 and 3 percent. |
| It is a collaborative work environment that creates a network of support, resources and connections to potentially lucrative business contacts. | Biggest strength | Accelerators are equipped with experienced mentors who give strategic guidance through different iterations of the business. At the end of the program, the startups present the business to several potential investors. |
Source: The National Business Incubation Association, additional reporting.