Gone are the days when it took a huge amount of money to start a business. Today, we live in an era where anyone having a great business idea can start on their own. All you need is a website/page/channel to begin with. But, what next? How is the journey covered from here to grow a successful startup? Well, we are going to shed light on this journey today.
According to NASSCOM, India stands today as the third largest startup ecosystem in the world. Interestingly, startups in fintech, healthcare, e-commerce, and aggregators are rapidly on the rise. In such a scenario, with a new business idea taking birth in every nook and corner of the ecosystem, right mentoring is becoming a necessity. As Raman Roy (Chairman, NASSCOM) rightly said, “Today, Indian ecosystem is flooded with innovative ideas and needs the right channel and guidance in terms of acceleration, scaling up and funding”.
Thus, startup incubators and accelerators are need of the hour. Now, we shall understand the role played by both in this journey of starting, scaling up the business. Generally, they are perceived to be same but they are certainly not. For this, let us begin by defining the incubators first.
Starting up: Incubators Are Your Savior!
Incubators support the startups in their initial stages in expanding their operations, decision making, etc. They do not pour in any money physically but become a guiding light for budding entrepreneurs. So, they are an efficient way to help in the beginning stage of a startup.
Scaling up: Accelerators Have Your Back!
Accelerators are different from incubators in various aspects. Unlike incubators, accelerators do not shy away from investing in the startup. Now, let us see some core features of startup accelerators –
1. They focus on a specific domain of expertise and choose startups accordingly.
2. They have a competitive selection process for funding startups.
3. They invest for an equity stake in participating startups.
Unlike incubators, startup accelerators have a pre-defined time-frame for every startup they invest for next stage of expansion. The accelerators also provide right mentoring to startups helping them to scale up in a targeted time-frame.
Thus, choosing the right kind of accelerators is of utmost importance. The right kind of collaboration goes a long way in shaping up the long-term outlook for startups. Also, research about the accelerators before approaching them helps immensely in choosing the right one.
So, choose wisely to grow organically.