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In the journey of a startup, there are different challenges and thresholds at every step. While setup and the beginning may seem like the toughest part, growing, especially expanding globally, is also a challenging journey.
For entrepreneurs, the most important actors that can help them financially and spiritually are undoubtedly incubators and accelerator programs. These programs provide support to startups in various fields; from providing a physical workspace to mentorship and networking. And their scales, focus industries, and expectations from startups vary.
Before we start listing these programs, let's clarify the difference between these two often interchanged terms. When you think about the dictionary meanings of these words, the differences between the programs can be easily understood. Incubator programs aim to nurture a new idea and turn it into a company with a solid business model, while accelerator programs support existing companies in their growth stage. In other words, incubators focus on innovation, while accelerators focus on the business model.
These programs are mainly located in startup hubs like Silicon Valley, but nowadays, they exist all over the world. There are both regional and global programs, as well as local ones. The critical point here is to find the right time to join these programs and select the one that will benefit you the most. To do this, being knowledgeable is essential.
Incubator programs can be independent or established with the support of angel investors, government organizations, banks, or other large companies. They support early-stage companies, sometimes even entrepreneurs who haven't yet established their companies. Incubator programs can focus on the development of a specific industry or be open to various sectors. For example, incubator programs supported by banks often support startups that provide solutions to simplify banking processes, and a government concerned about climate change can establish an incubator program for entrepreneurs who can provide solutions in this area, and so on.
Incubator programs support early-stage ventures. Sometimes, a single entrepreneur can also be involved in developing their idea into a company. Startups can begin with a single person's brilliant idea, but to develop this idea, create a realistic business plan, find the product's place in the market, hire the right employees, and turn it into a company, entrepreneurs need support. Incubator programs are ideal places for this process.
Incubation centers usually provide shared workspace, a standard training program, mentorship, and the opportunity to participate in networking events. Meeting other early-stage entrepreneurs and becoming part of the startup network is one of the most important experiences to gain in incubator programs.
Accelerator Programs: Accelerator programs, as mentioned earlier, are ideal for more growing-stage startups. Joining these programs is much more challenging than incubator programs. The most popular programs are highly selective in the startups they accept. For example, Y Combinator, one of the most popular accelerator programs globally, only accepts 2% of the startups that apply, and another significant program, Techstars, selects only 10 out of 1000 applicants.
Accelerator programs generally work like this: they provide some seed funding to early-stage startups in exchange for a stake in the company. In return, they offer access to a broad mentor network. This mentor network includes successful startup founders, investors, industry experts, and more. Accelerator programs help speed up a startup's growth journey with these supports, allowing the startup to reach a stage that would normally take two or three years in just a few months.
Both incubator and accelerator programs are essential support mechanisms for the growth of young companies. Where and when to apply depends entirely on your needs!
Each of these global programs has produced successful startups and proven themselves. However, it's important to remember that joining these programs alone is not sufficient to succeed. Entrepreneurs who participate in the program should be active, pay attention to selecting the right mentors, and benefit from the experiences of successful startup founders.
Founded in 2005 in the USA.
Supports hundreds of startups annually.
Provides USD 500K in funding in exchange for 7% equity.
Offers a vast mentor network.
Successful startups: Stripe, Airbnb, Twitch.
Website: https://www.ycombinator.com/
Founded in 2006 in the USA.
Operates programs in various startup hubs.
Provides up to USD 500K in funding.
Offers mentorship and a 6-month program.
Successful startups: Digitalocean, Ginger.io, Outreach.
Web: https://www.techstars.com/
Founded in 2010 in the USA.
Has branches in multiple cities worldwide.
Supports over 2,000 companies.
Focuses on technology, e-commerce, finance, health, and food sectors.
Website: https://500.co/
European-based incubator program.
Supports early-stage startups in various sectors.
Provides €75K for 7% equity.
Offers up to €300K in additional funding.
Successful startups: Wise, Revolut, Hopin.
Website: https://seedcamp.com/
Founded in 2009 in Boston.
Operates in the USA, Israel, Mexico, and Switzerland.
Supports hundreds of entrepreneurs annually.
Doesn't take equity but offers mentorship and networking opportunities.
Successful startups: Bitso, Ginger, Hyliion.
Website: https://masschallenge.org/
Founded in Estonia in 2012.
Supports B2B SaaS startups.
Provides $50,000 in investment.
Successful startups: Bolt, Comodule, Skeleton.
Website: https://startupwiseguys.com/
Founded in London in 2015.
Invests in early-stage tech companies.
Offers incubation and acceleration programs.
Focuses on health, e-commerce, fintech, media, energy, and transportation sectors.
Successful startups: Shopcircle, Pergele, Storyblok.
Website: https://foundersfactory.com/
Founded in Silicon Valley in 2006.
Operates globally, including Europe, Asia, and the MENA region.
Collaborates with large corporations.
Supports startups in solving various industry problems with technology.
Successful startups: Paypal, Dropbox, Honey.
Website: https://www.plugandplaytechcenter.com/
Techsign, founded in 2017, has sought support to grow more robust since its establishment. Our first incubator center was Albaraka Garaj. We entered this incubator as a company with only one employee besides the founding partners. In this incubator, we developed our first product, a biometric signature, and made it market-ready.
We also applied to Istanbul Technopark and, upon acceptance, moved our office there. Taking advantage of the support and incentives as a new startup, we walked with more secure steps. Our office is still located at Technopark.
Getting support from an incubator center during the startup phase was a wise decision. However, despite the benefits of the first incubator experience, we could not give the necessary importance to this issue in the later stages. We couldn't focus on accelerator programs due to the busy schedule created by acquiring our first customers, solving problems, and improving our technology. Adding to this, the COVID-19 pandemic that broke out in 2020 further distracted us from considering acceleration programs. I think it's important to mention this as a self-critique, as it may be helpful for other entrepreneurs. Because there are optimal application times for the programs mentioned above, and when you miss these times, the program's conditions may no longer be suitable for you. This is what happened to us.
In 2020, considering the needs created by COVID-19, we developed our second product, KYC. After gaining strong customers in Turkey, we turned our focus abroad, and acceleration programs came back on our radar. We applied to many acceleration programs, but as I mentioned earlier, we had outgrown some of the highly successful programs. For example, Techstars. We made it to the top 2% of applicants who passed the first application stage of Techstars, but we did not proceed to the second stage because our valuation had doubled the maximum valuation set by the program. A similar process occurred with Expert Dojo, another incubator. The contract terms did not match our valuation, and we had to decline their offer. Finally, we found the right fit with the Texas-based Newchip program. This program did not invest and, therefore, did not take equity, making it the best program for our needs. The fee we paid to join the program was not significant because we received credits for platforms we were already using, such as AWS, Google Cloud, and Stripe. The mentorship, investment pitch consulting, and training we received through the program were invaluable.
The startup journey is challenging and filled with obstacles. We are eager to support startups on this journey and grow the ecosystem together. I hope this article is beneficial to young entrepreneurs. Additionally, I'd like to remind you that we offer our products to startups at affordable prices.
If you're looking to use technologies like biometric signatures, document management, and KYC (know your customer) in your startup's growth journey, you can contact us and get to know Techsign. Until next time, take care!
