Bridging the Gap Between Venture Studios, Incubators, and Accelerators

Nov. 7, 2017

BY TARA CARTER & SINÉAD CHEUNG

Executive Summary

The rise of entrepreneurship doesn't seem to show signs of slowing down. There are many options for companies just starting out. The "just right" model to follow varies by your financial situation, your available resources, and your position in the product to launch lifecycle, to name a few. Here we provide a concise overview of how Venture Studios bridge the gap between venture capital firms and incubators and accelerators, as well as outline the primary differences between three of the most prevalent startup paths: venture studios, incubators and accelerators.

Bridging the Gap

Venture Studios bridge the gap between venture capital firms and incubators / accelerators. They are essentially organizations that build companies using their own talent and direction in exchange for equity. They offer a model that solves a lot of the issues and inefficiencies that often trouble startups and emerging companies.

Differences Between an Incubator, Accelerator, and a Venture Studio

From the startup perspective, there are different paths an entrepreneurship can take in order to commence actioning in their idea. In order to identify the best path for your startup, it's important to understand the differences between Venture Studios, Incubators, and Accelerators. Below we examine each of these three models so you can make an informed decision on the roadmap of your emerging company.

Examples End Goal Equity
Venture Studio Tangelo  Obvious Venture   Prehype Revenue Share / Exit / IPO - Similar to venture capital and private equity firms, venture studios have the end sight of an exit / IPO. Although the means and method of obtaining equity may differ, as a stakeholder within the space, the horizon is always a ROI. Yes - Regardless of what type of venture studio, the type of investment and equity exchange includes some degree of talent, infrastructural support, and/or resource allocation in growing the venture.
Incubator T-Hub 
Code Launch
NA - Incubators are not focused on quick growth. Often times, their focus is placed on iterating over the discovery phase of a product or service idea. In some cases, the end goal may mean preparing a company for an accelerator program. No - Incubators take little to no equity in your company. They can afford to do so as many incubators are funded by grants through universities, allowing them to provide their services without taking a cut of your company.
Accelerator TechStars 
Y-Combinator 
500 Startup  
Initial Seed Stage Funding - Accelerators at the end of the day are focused on driving quick growth and valuation within a given company in preparation for initial funding Yes - Accelerators are known to provide funding. Approximately $20,000 of accelerator funding along with guidance is typically invested.
BY TARA CARTER & SINÉAD CHEUNG
ENTREPRENUERSHIP, VENTURE STUDIOS, INCUBATORS, ACCELERATORS