Accelerators and Incubators..how to become self-sustaining

Over the past decade, there has been a rise of accelerators and incubators around the start-up community.  Start-ups from fin-tech to fashion to software to cannabis.

Accelerators are usually places that founders apply to and if accepted they spend an extended amount of time in the program.  Many of the programs really help the founders accelerate their business with the curriculum that they have set forth.  That includes mentors that come in and speak to the founders.  Also, a community sitting under one roof who are focused on the same thing although their businesses are different, the camaraderie plays a big part as well as the start of a business, no matter the content, has many of the same issues.

Accelerators are models where the company running the accelerator puts in an amount of cash to own a piece of the business from the beginning although they continue to help as they move forward because they have skin in the game.

Incubators vary.  Some of them are run by VC’s while others are run by organizations from the Government to companies with real estate that is committed to putting start-ups under one roof.  We are seeing more of these incubators from Grand Central Tech to the Navy Yards.  They are committed to helping these young companies grow yet many of those models do not take a piece of the companies but they do help from bringing in speakers, creating community, giving advice, etc.  Even at Hot Bread Kitchen, they manage a program for young food companies.

One of the things that I have talked to a few of the people running incubators is to shift their model a bit.  They are not doing as much as an accelerator but they are providing a huge solid to these start-ups.  I would suggest that every company that gets space in an incubator gives 1% to that “landlord” and even take it to another level where those companies could have a tag line “powered by the incubator”.  It creates a solid brand for those incubators and links a community together of everyone who comes through that space.  If one of those companies take off and the payoff is large then there will be a pot of cash that will pay for other programs in the space or if lucky, the rent for many years to come