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Start-Up Incubators and Accelerators: A Smart Way of Gaining Access to Mentors, Partners, Investors, and Other Critical Start-up Resources

the number of start-up incubator and accelerator pro- grams in the Unites States continues to grow. Incu- bators are organizations that provide start-ups with shared operating space. They are sponsored by universi- ties, city or county governments, or nonprofit organiza- tions. Incubators also provide start-up businesses access to networking opportunities, mentors, and shared equip- ment. Incubators typically do not ask for equity from their participants and do not provide seed funding. They were very popular in the 1980s and remain an important part of
the entrepreneurial ecosystem in many areas.
Accelerators are a newer concept. They are mostly for-profit organizations that offer a small amount of seed funding in exchange for small equity positions in the com- panies that participate in their programs. Most accelerator programs admit start-ups in cohorts, and put the start-ups through a 10- to 15-week intensive program. The accel- erator typically offers free office space, perks such as free WiFi and web hosting, weekly meetings with mentors, and coaching on how to put together an effective inves- tor pitch. The programs normally cumulate with a “Demo Day” which provides the participants the opportunity to pitch their business ideas to a group of investors, men- tors, and reporters. The better programs will have 200+ investors present at their Demo Days. The greatest advan- tage of getting into either an incubator or accelerator pro- gram is the mentorship opportunities they provide. They are also fertile places for entrepreneurs to meet potential cofounders, business partners, and investors.
The two most well-known accelerator programs are Y
Combinator and TechStars. Y Combinator is located in the Silicon Valley. It provides $120,000 in funding for 7 percent equity in each start-up it admits. Its participants are admitted in two, three-month sessions per year. It doesn’t offer office space. Instead, its program includes “office hours” where its start-up founders meet individually and in groups with Y Combinator partners for advice. Founders also participate in weekly dinners where top-flight guests from the Silicon Val- ley ecosystem speak to the founders. Y Combinator’s motto is “Make Something People Want.” TechStars is similar to Y Combinator in that it is a three month program. It provides
$18,000 in funding for a 6 percent equity stake. Started in Boulder, CO, it has expanded and now has 26 programs that are organized around cities and themes. TechStars has offices in Atlanta, Chicago, Boulder, New York City, London, Seattle, and several other cities. Examples of the themes on which it focuses include Alexa (voice-powered technology), Internet of Things, music, and retail.
While admission to Y Combinator and TechStars is very competitive, there are a growing number of start-up incubators and accelerators in American cities. Most are accessible to hard-working start-up founders with promis- ing business ideas. Many focus on a particular industry or sector, such as food, medical devices, software, mobile, or technology. To illustrate how prevalent start-up incubators

and accelerators have become, the following is a list of start-up incubators and accelerators in five American cities. You can identify the start-up incubators or accel- erators in your area by speaking to local entrepreneurs or investors or by conducting a simple Google search.
Capital Innovators is a start-up accelerator located in St. Louis. It provides tech start-ups $50,000 in seed fund- ing, office space, access to weekly networking events, and follow-on funding opportunities.
Excelerator Labs is an intensive summer accelerator in Chicago. It selects 10 companies every spring to partici- pate in a 13-week intensive summer program. The program is unique in that it attracts mentors from across the country who work with the participants on a one-on-one basis.
Capital Factory is an Austin, TX start-up incubator/ accelerator and coworking space. It also hosts meet-ups and other events for aspiring entrepreneurs. Its accelerator program offers mentorship opportunities and connects its entrepreneurs with investors. In 2015, more than 50,000 entrepreneurs, programs, and designers were involved in Capital Factory programs and events.
EnterpriseWorks is part of the University of Illinois’ Research Park. It’s a start-up incubator that hosts early- stage tech firms that are commercializing research emerg- ing from the university’s labs. It is a hub of activities and its clients include start-ups focused on fields such as chemical sciences, biotechnology, software development, and material sciences.
Food-X is a New York City-based business accelerator that is focused on launching food-related businesses. Its three-month program provides up to $50,000 in seed funding, coworking space with other food entrepreneurs, and access to a world-class network of food companies, investors, and press. Each week, participants meet with 3—5 expert mentors to test, validate, and accelerate their food ventures.