Most startups fail or experience problems because they lack the support of industry needed to increase their likelihood of succeeding. Startup founders looking for support often turn to incubators, accelerators, ventures, or startup studios. But, how do these business models compare to each other? This article explores the top four business model options to help founders determine which one is the best option for their startup’s growth.

Accelerators

Accelerators, as the term suggests, speed up the growth of an existing company, with a focus on business scaling, they provide investor access and mentorship to help early-stage startups get their products to the market faster.

Pros: If you have a winning product or idea, an accelerator can open up partnership opportunities, including funding and mentorship programs.

Cons: Accelerators have a set timeline of support, usually three to six months. Oftentimes, startups need a longer time frame of support, and in some cases, founders find this support to be too limited. This business model also prefers startups with a minimum viable product (MVP) and an established business model demonstrating rapid customer acquisition, which makes some startups not a good match for this business model. 

Incubators

The main goal of incubators is to nurture disruptive market ideas when developing a business model or company. They’re focused on innovation and offer various resources, such as office space at the foundational stages, even for founders without fully-fledged business plans.

Pros: With incubators, less pressure is placed on product launches and there is more emphasis on developing investment-ready business ideas instead. Most incubators accept founders who only have a promising business plan or idea, making them accessible to many aspiring entrepreneurs in need of expert guidance.

Cons: Incubators are mostly funded by non-profit groups like governments, economic development organizations, or academic institutions that mainly promote innovation. As a result, obtaining seed money from the incubator is not always possible.

Startup Studios 

Startup Studios, also known as venture studios, are companies that are entirely dedicated to making strategic decisions that aid in the launch and growth of new startups. And unlike accelerators and incubators, top startup studios do not work in a cohort. They, instead, partner with founders directly, as a co-founder, and expect some equity in exchange for their hands-on approach. And because startup studios only work on ideas they believe will be successful, the selection process involves extensive research, leading to highly refined startups ready for market penetration.

This resource-intensive startup studio model operates from the formation stage to the launch and is a great option for building industrial-scale, high-growth companies. They provide funding, human capital, mentorship, and much more, to repeatedly create businesses out of market-tested disruptive ideas.

Pros: Because startup studios only work on ideas they believe will be successful, the selection process involves extensive research, leading to highly refined startups ready for market penetration.

Cons: Not all founders are willing to give up a portion of their equity in exchange for using the startup studio’s resources. 

Startups and founders have a variety of options when it comes to finding the right support system to help them get their ideas off the ground. Startup studios, incubators, and accelerators are all popular options, each with its unique set of benefits. Founders should always do their due diligence when evaluating various startup studio programs to determine which model has the necessary resources to scale their company. Check out more content on our Startup Studio Insider (startupstudios.com) to get additional insights into the startup studio world.