Incubators and Accelerators

The Philippines is known as a good testing ground to launch and nurture startups. Besides having a low-
cost living, the country has a growing number of young and tech-savvy population who speaks English.

 It's Affordable: Living costs are low, so startups can save money on things like rent and salaries.
 Lots of Young, Tech-Savvy People: Many young Filipinos know a lot about technology, which is
perfect for startups that need digital skills.
 English is Common: Since many people speak English well, it's easier for startups to talk to
customers and partners from other countries.
 Helpful Government: The government supports startups with things like tax breaks and
programs to help them grow.
 Money and Connections: There are investors and programs that can give startups money and
help them meet important people in the business world.

There is also plenty of room for upgrading like bridging the gaps in business services, tech, and financial
inclusion of the unbanked.

 Improving Business Services: This means making businesses work better and smoother. For
example, finding ways to make deliveries faster, improving how customers are treated, or using
new tools to manage money more easily.
 Tech Upgrades: This is about using new technology to make things easier in businesses. For
instance, using computers and phones to do tasks faster, selling things online, or using smart
machines to help with work.
 Helping People Join the Money System: Some people don't have bank accounts or ways to
handle money easily. Bridging this gap means finding ways for them to use digital banking, get
small loans, or learn how to manage money better.

There is actually a misconception from early entrepreneurs about who is really an accelerator and an
incubator. Here are some of the differences of incubators and accelerators:

Definition

 Accelerators: Focus on existing businesses that are looking to accelerate their growth and scale
their operations. These businesses have typically already launched their products or services and
are seeking rapid growth and market expansion.
 Incubators: Target early-stage startups and new small businesses that are in the initial phases of
development. These ventures may still be refining their product or service, establishing their
business model, and working on market validation.

Objective

 Accelerators offer a wide range of resources, services, and mentorship to help startups grow
and scale their businesses rapidly. They often focus on specific growth objectives, such as
market expansion, product development, or fundraising.
 Incubators provide mentorship from industry leaders and experts, helping startups improve
their business plans and navigate hurdles during the beginning stages, nurturing startups in their
early stages.
Time Period

 Incubators allow entrepreneurs to nurture their ideas and convert them into fully functional
business models over an unlimited period.
 Accelerator programs have a fixed duration, usually three to four months, to ensure rapid
growth and scaling.

Business Model

 Accelerators' Business Model: They have lots of experienced people who help startups.
 Incubators' Business Model: They have a smaller group of mentors who give more focused help
to startups.

Entrance/ Selection

 Accelerator all can apply so the programs usually receive numerous applications from early-
stage companies, so they are highly selective with their acceptance process.
 Incubators usually, you need to meet specific criteria or get selected to join an incubator.
They're more selective about who they work with, they often prioritize supporting many
different kinds of startups.

Equity Ratio

 Accelerators take 6 to 8% equity stake

"Equity stake"- percentage of ownership that an investor will acquire in a startup

For example, when an accelerator offers an 8% equity stake in a startup, it means the investor gets
8% ownership of the company. This ownership comes with rights like voting on company decisions
and possibly getting a share of profits or dividends. Having an equity stake also means they can
access information about how the company is doing and what it's up to.

 Incubators no equity stake was taken

Resources

 Accelerators usually have a lot of resources like money, mentors, and connections. They focus
on helping startups grow quickly.
 Incubators have fewer resources compared to accelerators. They provide basic support like
office space and guidance, and they're more about long-term help for startups in their early
stages.

Areas

 Accelerators help startups in technology-related areas like websites, mobile apps, and IT
because they can grow quickly and have a lot of support available in those fields.
 Incubators focus on industries like biotechnology (making medicines and treatments) and
medical technology (creating new medical devices) because these industries often need more
time and special expertise to develop new products. They also work on physical products
because they can have a big impact on important areas like healthcare and the environment.

Selection Process
  Accelerators, the selection process is often competitive because they look for startups with high
growth potential and innovative business models. They want to invest in companies that can
quickly scale up and make a big impact in their industries. This competitive selection ensures
that the accelerator can attract the best startups and maximize their chances of success.
 Incubators often have a competitive selection process based on the available space and
resources they can offer. Since they focus on providing longer-term support and nurturing
startups through their early stages, they may have limited capacity to accommodate many
startups at once. Therefore, startups may need to compete for a spot in the incubator based on
the available space, resources, and the fit with the incubator's focus areas and goals.

Services

Accelerators:

 Fast-Testing and Validation: Accelerators help startups quickly test their ideas in the market and
validate whether there is demand for their products or services. This process helps startups
refine their offerings and strategies.
 Mentoring Support: Experienced entrepreneurs provide guidance, advice, and mentorship to
startups. They share their knowledge and insights to help startups navigate challenges and make
informed decisions.
 Seed Funding: Accelerators offer initial funding or investment (seed funding) to startups. This
funding helps startups cover early expenses and kick-start their growth.

Incubators:

 Management Support: Incubators provide support in various aspects of startup management,

such as business planning, operations, and strategic decision-making. They help startups
develop solid management practices.
 IP Rights Assistance: Intellectual Property (IP) rights are crucial for protecting inventions and
innovations. Incubators assist startups in understanding and securing patents, trademarks, and
copyrights for their ideas.
 Networking Opportunities: Incubators facilitate networking events, workshops, and connections
with industry experts, investors, and potential partners. This networking helps startups expand
their contacts and collaborations.
 Access to External Financing: Incubators help startups access additional funding from external
sources like investors, banks, or government grants. They assist in preparing funding proposals
and connecting startups with financing opportunities.

An incubator is like a supportive environment for startup businesses and new entrepreneurs. They
provide a range of services to help these startups develop their products and ideas. This support
includes things like training, assistance with management, help with protecting their intellectual
property (like patents and trademarks), access to resources, and sometimes even shared office spaces
and facilities. Today, many incubators are offered by universities, colleges, and educational institutions,
as well as by economic development agencies and government organizations. These incubators play a
crucial role in nurturing and growing new businesses by providing them with the tools, knowledge, and
support they need to succeed.
An accelerator is like a specialized program designed to help businesses grow quickly. It has a set
duration, usually with mentorship and educational components included. The program often culminates
in a public pitch event, where businesses showcase their progress and ideas. The main goal of an
accelerator is to support rapid business growth and facilitate a successful product launch. At the end of
the program, businesses get the opportunity to pitch their ideas to investors and secure financial
assistance for further growth and development. It's a way for startups to accelerate their progress and
access valuable resources and connections within a short timeframe.

Minimum/Most Viable Product (MVP) as the most basic version of your product that you can launch to
see if people like it.