I admit that at one point in my career I didn’t know the difference either. In fact, at one point I thought they were the same thing. Understanding the difference is important. Especially, if you are considering working with one.
Here is the difference in a nutshell as explained by Plum Alley’s Deborah Jackson (see article below).
- Accelerators take single-digit portions of equity in companies in return for small amounts of capital and mentorship. They’re generally truncated into a three to four-month program at the end of which the start-ups “graduate.”
- An incubator, on the other hand, brings in an external team to manage your idea and takes a much larger amount of equity compared to accelerators because they allow more time for the business to be successful.