- Accelerator incubator – Paul Graham’s Y Combinator, YC for short, which was founded in 2005, has seen its “startup school” model imitated around the globe. As the Godfather of accelerators, YC has put 1,801 companies through its program grindstone, yielding the likes of Stripe, Airbnb, Doordash, Coinbase, Instacart, Dropbox, Reddit, and Zapier.
- YC program details – A perfect example of what an accelerator program might offer participants is this January 2016 YC Fellowship: Participating companies receive $20,000 in exchange for a 1.5% equity stake.
- Progam differences – Both programs differ in scope: Accelerators are usually short, intense programs with a limited number of participants, while incubators may or may not have a program in place but typically offer a workspace to entrepreneurs. Each demands an equity percentage in exchange for a small amount of cash and entry into the program.
- Market dimensions – According to the no-longer-available resource library of the National Business Incubation Association (NBIA), “As of October 2012, there were over 1,250 incubators in the U.S., up from only 12 in 1980. NBIA estimates that there are about 7,000 business incubators worldwide.” In June 2013, U.K.-based F6S, a resource for startups, listed 412 Accelerators, Contests & Programs. Today, F6s lists 25,523 Accelerator/Programs. Since F6S data is crowdsourced, it’s neither complete nor entirely reliable.
Accelerators and incubators play a crucial role in the global entrepreneurial community. NBIA estimated that North American incubators assisted about 49,000 startups in 2011 alone. At the time, the industry was estimated to employ 200,000 workers and generated annual revenues of nearly $15 billion.