Entrepreneurs

Accelerators, Incubators, Coworking Spaces: What's the Difference?

90% of new startups fail. In fact, most companies won’t survive past their fifth year. Innovation hubs like accelerators, incubators and coworking spaces can make all the difference for companies looking to scale.

The question is: what exactly is the difference between an accelerator, incubator and coworking space? Is there one? And which one is right for your company?

We’re looking at the main differences between these three by highlighting what they offer companies, as well as showcasing some of the most notable startup spaces in Canada.

It’s important to note that there is no hard and fast rule when it comes to these innovation hubs — what each space offers is fluid and depends on their individual business model. For example, some spaces that don’t offer seed investment might still consider themselves an accelerator, while other hubs might say they’re none of the above.

With that mind, let’s break it down.

 

Accelerators

 

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The truth is that accelerators and incubators are extremely similar, some would even argue that they are the same thing. In fact, they are so similar that Hockeystick Database groups accelerators and incubators together in its advanced search function.

The root of their difference lies in their names. Accelerators aim to, you guessed it, accelerate the growth of existing companies so they can mature and reach that next stage.

 

Learn more about how accelerators can help founders scale their companies.

 

They tend to operate on a set schedule, with member companies working with mentors on their businesses. Getting accepted into an accelerator usually involves a selective and competitive application process.

 

Accelerators at a glance:

  • Small seed investment from the accelerator
  • Access to large mentorship network and programming
  • Supportive environment for companies looking to scale
  • Private office spaces for companies
  • Small amount of company equity goes to the accelerator 

 

Incubators

 

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Incubators are looking to do just that — incubate early-stage, often disruptive, business ideas and give them the best possible conditions to grow.

Unlike accelerators, they do not operate on a set schedule. There is usually more focus on mentorship at incubators and many are industry-specific, supporting only companies that fall under a certain vertical.

Incubators also offer startups a shared working space where they can refine their ideas, work on product-market fit and network in the ecosystem.

 

Incubators at a glance:

  • Gain vital business connections at the early stage of your company
  • Work closely with like-minded people and businesses
  • Small amount of company equity usually goes to the incubator

 

5 notable Canadian accelerators and incubators:

  • Founderfuel (Montréal, Québec)
    • Offers workshops, advisors and mentors that help develop strategies to conquer the market
    • Specialized in supporting tech startups achieve long-term projects through their 12-week program
  • Merck Invention Accelerator (Edmonton, Alberta)
    • For early-stage human and animal health therapeutic companies looking to reach their next milestones
    • Designed to help maximize the success of emerging health technologies
    • Best suited to small enterprises or early-stage scientific researchers planning to bring their technology to patients or healthcare providers
  • Creative Destruction Lab (founded in Toronto, Ontario with locations across North America)
    • Works with startups that employ innovations in technology and business models with a promising chance of providing massive improvements to economic productivity and human welfare
    • Best suited to early-stage companies with links to university research labs
    • 9-month program gives an objectives-based mentoring process with the goal of maximizing equity-value creation
  • Propel ICT (Saint John, New Brunswick)
    • Works with companies in all 4 Atlantic provinces
    • Focused on building up tech entrepreneurs and fostering economic growth in Atlantic Canada
    • Intensive accelerator program takes startups from the early stage to become investment ready
  • LaunchPad PEI (Charlottetown, Prince Edward Island)
    • Non-profit incubator that supports the growth of new technology companies in PEI
    • Provides an anchor for foreign businesses looking to immigrate and grow in PEI
    • Does not take equity, instead is there to help your company grow and succeed

 

Explore 81 innovations hubs available to entrepreneurs in the Toronto-Waterloo startup ecosystem.

 

Coworking Spaces

 

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Coworking spaces are perhaps the most self-descriptive of the bunch. Companies, even if it’s just one entrepreneur, can rent everything from a single desk to an entire office, with the option to rent more space as they grow. Most coworking spaces don’t take equity and don’t offer investment.

NYC-based coworking space WeWork describes itself as, “A place you join as an individual, 'me', but where you become part of a greater 'we'.” Currently, WeWork has Canadian locations in Toronto, Montréal, Vancouver and Burnaby, with the company announcing it will be opening 20 more Toronto locations by 2020.

 

Coworking spaces at a glance:

  • A space to call your own
  • Private meeting rooms
  • Flexibility to expand as your company grows
  • Networking opportunities with fellow entrepreneurs

 

5 notable Canadian coworking spaces:

  • Workspace Atlantic (Atlantic Canada)
    • 3 locations across Nova Scotia & New Brunswick
    • Affordable shared co-working and virtual office membership packages that gives them the freedom to work when and where they want
  • Acme Works (Toronto, Ontario)
    • For small businesses, freelancers and startups looking to transition out of isolated work environments
    • Members have access to a network of experts, lawyers, accountants, marketers and senior executives
  • Cowork Penticton (Penticton, British Columbia)
    • Landing pad for professional residents new to the area
    • Bridge in the gap that helps entrepreneurs find their place in the local business community
  • The Workaround (Toronto, Ontario)
    • Offers space and support to working parents who need flexibility
    • Strives to remove some of the barriers that come with working at home or from your local cafe
  • La Gare (Montréal, Québec)
    • Collaborative and welcoming space for entrepreneurs, designers, creators, artists, self-employed workers and small teams
    • Training sessions and events that allow members, local entrepreneurs and experts from various disciplines to share their knowledge

What’s Right For Your Company?

Finding the space that works best for you and your team depends a lot on what stage your company finds itself in, and what resources are most vital for your growth. In fact, many companies will work in all three types of spaces as they scale.

Whatever the name, all of these innovation hubs play a crucial role in the development of companies, as well as the broader ecosystem, as entrepreneurs turn their big ideas into real, innovative solutions.

How do you think the ecosystem should categorize innovation hubs? Tell us what you think! 

 

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