Coworking spaces, incubators, and accelerators happen to be three concepts that are used often in the startup community. Each of these options is advantageous for building a new business, and has something to offer based on your personality and requirements. Understand the difference between them and which one you need to choose based on your requirements.
These spaces provide you with a dedicated office or desk that you may rent at anytime that you wish. These types of spaces are available in all sizes and shapes, and as many as 14,000 spaces are estimated to be in operation across the globe. It is a community comprised of like-minded people who work in the same space together for collaboration and growth. SOMAcentral is an example of a coworking space suitable for startups. They have been around from the early days of coworking spaces and have well-known alumni such as Mashable, AngelList, Grammarly, and Instagram. You may choose to start in a coworking space and as with SOMAcentral’s alumni, as your startup grows, you may decide to rent more space and move to your own office.
Many of these spaces also extend mentorship and advice to startups via networking sessions, events, and dedicated services. These offer you a workplace at a competitive rate, ensure a superior level of security, and also extend shared office facilities. You can handle your own creative work with your team or on your own, irrespective of how major the project is. You may even collaborate with some other creators working in your adjacent space. No seed investment is involved in coworking spaces, and they do not ask for equity from you.
These are meant for startups that are in the initial stages of being established. These concentrate more on mentorship, do not work on a specific schedule and are generally operated by groups and companies that are industry-specific. Idealab is a tech incubator that has been in the market for a long time; they have created over 150 firms. A few incubators also extend shared space to startups in a coworking ambience. Most of these will ask for a percentage of your equity.
If you have recently launched a startup, incubators can be appropriate as these promote fresh ideas and aid in launching businesses. You have to generally apply for a 1-year program to join an incubator. These aid in the growth of businesses, offer a nice workplace, and can offer scientific support for your idea.
A few incubators are situated at universities that offer you the possibilities for extended research. You can even get access to scientific equipment at those places, although they do not always offer funding.
Incubators and accelerators have many similarities as programs, and can assist in your business growth via funding opportunities and mentorship. Accelerator programs run on a specific schedule and extend mentorship that boosts the growth of your startup. The majority of these are extremely competitive.
In case you opt for an accelerator, you will obtain a small seed investment as well as access to an expansive network of mentors. However, you will need to give up a small percentage of business equity.
If you have launched your company already but wish to set up a network and draw capital investments, you will find that such programs are better for you. Accelerators tend to work as per a specific schedule. They offer expected results and mentorship within a specific period of time. They also offer networking, intensive mentorship, workspace, and seed investment. Additionally, you can get training on how to ensure faster business development.
Which One Should You Choose?
Deciding which option is best will be a very personal choice for you as well as your business. It is based on your future plans and the maturity of your startup. Your choice should be based on various factors:
- Your needs and requirements. In case you badly need investments, you can be assisted by accelerators. These will offer you access to a network of alumni that can let you establish robust partnerships. However, these will need a portion of your equity.
- Level of development of your startup. You can use an incubator in case you have just begun your operations but have not yet launched a startup. In case you have more interest in drawing investors and setting up partnerships, it can be better to opt for accelerators.
- Your own expectations and plans. In case you require a creative and flexible space for the implementation of your creative ideas, coworking spaces might be a better idea. You can also find partners and various other service providers that will assist you.
Whether you select a coworking space, an incubator, or an accelerator, maintain the focus on your own startup. Try to outsource the administrative tasks related to your company to specialists. There are benefits of each option. Make sure that you start with the one that is most appropriate for your business. That said, it is not necessary for you to stick to only one option for your business. If you wish, you may use all three options as needed at various stages of the development of your startup organization.
Photo Credit: Mark Morgan