From working out of a garage to relocating for an industry-specific accelerator program, startups have more options than ever about where to work and how to build their businesses. Among the most popular are coworking spaces, business incubators and accelerators.
You might think these terms are interchangeable, or that they are simply buildings or workspaces. While they often do offer space, the true purpose of all three is to provide entrepreneurs with services necessary for growth. And although they are all designed around the same mission, key differences separate them.
Determining the right next choice for your startup is all about understanding the stage you are in and the fit for your current needs. So what are the differences between coworking, incubators and accelerators, and what are your options in Western New York?
Coworking brings together freelancers, telecommuters, business owners and small teams into a shared, professional workspace at a reduced cost. Key amenities of traditional office spaces are typically included — desks and meeting rooms, internet, mailboxes, a kitchen and free coffee.
Many coworking spaces offer tiered memberships and payment structures to provide flexibility for companies as they evolve — from a shared hot desk or open space to drop on occasion, to a full, dedicated office suite rented by an entire team on a monthly basis.
Building community is a key focus for coworking spaces, yielding a built-in network of like-minded innovators with whom members can interact, collaborate and build business opportunities.
Coworking may be right for you if:
- You are a solo entrepreneur, small team, or work remotely.
- You need affordable, flexible space.
- Building community is important.
Incubators nurture startups and entrepreneurs by providing an array of resources and support in the most critical, vulnerable growth periods for early-stage companies. This includes office space — and possibly even coworking space — but also coaching and mentorship, connections with investors and funding opportunities and business support services.
Most startups who choose to locate in an incubator have significant potential to scale but are still developing and proving their capabilities and business model. Unlike accelerators, there is no specific timeline or end point in an incubator, and companies typically do not have to give up equity to participate.
Incubation may be right for your startup if:
- You need affordable, flexible space.
- Building community and connections is important.
- You’re an early-stage startup building your idea, product or business model.
- You’re looking for business support and mentorship.
For a list of Buffalo-based incubators, see the Western New York Incubator Network (WIN).
Startup accelerators are competitive, cohort-based programs with a defined curriculum and timeline — generally a few weeks or months. Some require companies to relocate, and others are virtual.
Accelerators are designed to quickly boost high-growth, scalable startups, often in exchange for equity. Most startups who are selected for accelerator programs already have a business model in place and have proven out a minimum viable product. Thus, the goal of many accelerators is to prepare startups for fundraising, with coaching and education being key components.
An accelerator may be right for your startup if:
- You have proven your concept and have a business model in place.
- You are looking to significantly accelerate your business.
- You are preparing to raise money and looking to network with investors.
43North is an accelerator and startup competition based in Buffalo, serving startups around the world.
Hybrid option: Universities can provide all three
Another option you may not have considered is to seek out entrepreneurial resources available at your local universities. With new inventions, technologies and companies spinning out at a rapid pace, universities often put significant effort into fostering innovation and entrepreneurship.
In Western New York, the University at Buffalo brings together all elements of coworking, accelerators and incubators through programs and services to support businesses in their earliest stages and put them on the path to viability.
In addition to the features described above for each type of program, startups who work with UB gain access to the university’s faculty and business experts, student interns, benefits to operate tax-free for 10 years through STARTUP NY, opportunities for hackathons or innovation sprints and access to cutting-edge technologies. UB also uniquely features lab space and omics experts for life sciences startups, as well as a computational powerhouse and expertise for software, artificial intelligence and data analysis companies.
Working with a university may be right for your startup if:
- You’re looking for a holistic solution that encompasses everything coworking, incubators and accelerators offer.
No matter the path or location you choose, all of these programs provide significant benefits to budding entrepreneurs.