When founders are thinking about starting and launching a business, there are several models that are uniquely beneficial and can help bring your business vision to fruition. Two of the most well-known models for starting and launching successful and sustainable businesses have become accelerators and startup studios. Although both models provide efficient strategies for building a business, they have a few key differences. To determine the best model for your business, this article details the key differences between accelerators and startup studios according to Startup Studio Insider, a collaborative blog for startup studio enthusiasts interested in all things startups.
Let’s dive into how each of these business models helps develop thriving startups and the key benefits each can offer to founders and their teams.
Breakdown of Accelerators
Startup accelerators support early-stage companies by providing education, mentorship, and temporary financing. The accelerator provides a fast-tracked crash course to all companies within a cohort to promote and expedite scalable growth. At the end of an accelerator program, the participating companies can showcase their accomplishments to potential investors in a culminating event called ‘demo day.’ The event gives founders and their teams the opportunity to highlight the important work that they are doing, their successes to date, and the potential of the business, in the hopes of generating interest and gaining the backing and financial support of investors.
It’s important to note that dozens of companies may graduate from an accelerator program, but only a handful will survive the first year on their own. Some of the most notable accelerators include Y Combinator, TechStars, and Plug and Play. They have risen to the top over the years, aiding in the launch of successful companies such as Airbnb, Classpass, SoloFunds, and more.
Breakdown of Startup Studios
Startup studios help expedite growth through education and shared resources by investing much earlier than accelerators. In fact, startup studios invest at the earlier stages of a business idea to ensure that their portfolio companies are equipped with a team of proven builders and operators. Then they generate ideas internally, while some accept external pitches.
The selection process is also very rigorous. A startup studio may see hundreds of ideas pitched, but they will likely only accept one or two to move forward with. Startup studios invest their time, money, and resources into these startups. Beyond launch, studios maintain a relationship and provide shared resources for their portfolio companies to facilitate long-term success.
Some of the top startup studios include Atomic, Wilbur Labs, and Rocket Internet. They are making waves in developing successful, thriving businesses across various industries that solve real problems for consumers. Companies like Hims/Hers, VacationRenter, and even Dollar Shave Club have been launched with the help of studios.
Differences between Accelerators and Startup Studios
Type of Clients
- Accelerators work with pre-existing, early-age startups.
- Startup studios build companies from concept to launch and beyond.
Funding
- The goal of an accelerator is to prepare a company for future funding vs. providing funding to fuel the business.
- Startup studios provide ample funding to launch and operate the startup.
Focus of Program
- Accelerators are more education-focused, acting as a mentorship program for the founder.
- Startup studios are more resource and collaboration-intensive in all stages of business development.
If you’re more of a visual person, check out this chart from Startup Studio Insider, that balances out the key differences between accelerators and startup studios.
Now that you know the key differences between startup studios and accelerators, you can start evaluating your options and decide which model is right for you! While both accelerators and startup studios are viable options for entrepreneurs, their approach and end results are vastly different. Make sure that you understand what kind of needs and expectations you have for your business and take it from there. For more insightful information about startup studios, check out Startup Studio Insider on Medium.
