When it comes to scaling startups, there are many programs that these fledgling companies can go through in order to achieve growth at a lightning pace. Some work with accelerators made for startups, others with incubators, and some launch their startups with the help of a venture studio.
Both startup accelerators and startup studios are used to help young companies grow and succeed, but they are not interchangeable models. Startup accelerators provide funding and mentorship, while startup studios provide a space for companies to work and often also offer funding and mentorship post-launch.
Startup accelerators are often used interchangeably with startup studios, but startup accelerators provide more funding and mentorship, while startup studios provide a space for companies to work and often work part and parcel with the startup to create successful launches.
In a startup studio, for example, the studio team may be responsible for technological development and project management, while the startup team will be responsible for sales and marketing.
Still not sure of the differences? Not to worry - in this article, we'll be digging deeper into the differences between startup accelerators, startup studios, and venture studios. Take a look:
What Is A Startup Accelerator?
A startup accelerator is a program that provides funding and mentorship to young companies with the goal of helping them grow and succeed. The startups that form as part of accelerators typically have an MVP or prototype and may have received some sort of early seed funding.
Some of the benefits you can expect from being part of a startup accelerator include:
- Funding: Most startup accelerators provide funding to the companies that participate in their program. This can be in the form of equity, debt, or a combination of both.
- Mentorship: One of the most valuable things an accelerator can offer is mentorship from experienced entrepreneurs and industry experts. This guidance can be instrumental in helping young companies get a leg up in existing markets.
- Community: Participating in a startup accelerator often gives companies access to a supportive community of entrepreneurs and investors who can help them navigate the challenges of starting and scaling a business. This can include access to other startups and founders in similar circumstances. Most accelerators also work with angel investors, venture capitalists and other industry experts
Many successful startups have come from the accelerator space. Some of the most famous startup accelerators include Y Combinator, 500 Startups, and TechStars. These accelerators have helped launch some of today's most successful companies, including Airbnb, Dropbox, and Reddit.
What Is A Startup Incubator?
A startup incubator fulfills many of the same needs as a startup accelerator but is usually targeted to startups that are still in the ideation phase, versus accelerators that work with later-stage startups.
The benefits of being part of a startup incubator include:
- Space: One of the biggest advantages of being in an incubator is the access to testing space. It allows these companies to incubate their ideas and get key feedback early on in the startup process.
- Funding: Many incubators offer to fund the startups that participate in their program. This can be in the form of equity, debt, or a combination of both.
- Mentorship: Many incubators also offer mentorship from experienced entrepreneurs and industry experts. This guidance can be instrumental in helping young companies understand their product market fit and how to achieve it profitably.
- Community: Participating in an incubator often gives companies access to a supportive community of entrepreneurs and investors who can help them navigate the challenges of starting and scaling a business.
What Is A Startup Studio?
A startup studio is a company that provides space for young companies to work and often also offers funding and mentorship - although this isn't always the case. At NineTwoThree, for example, we have experts in engineering, design, IT, and people ops. We fill in the financial, legal, marketing, and funding gaps through our partnerships.
Oftentimes, we even find the exact right client/founder that already has finance, legal, sales, marketing, and funding expertise and is looking for design and product building.
The benefits of working with a startup studio include:
- Space: Startups often need a lot of space to grow and develop their products and services. A startup studio can provide this space for companies at an affordable price.
-Proven processes: This model is all about repeatability, which means that they can draw from previous launches to smoothe the way of the startup they are partnered with.
- Funding: Startup studios often provide funding to the companies that work in their space. This can be in the form of equity, debt, or a combination of both.
- Mentorship: Startup studios are often led by experienced entrepreneurs who are happy to share their wisdom and help young companies grow and succeed.
Some of the most famous startup studios include The Garage in London, Betaworks in New York City, and Matter Ventures in San Francisco. These studios have helped launch some of today's most successful startups, including Buzzfeed, Warby Parker, and GitHub.
Venture Studios Versus Startup Studios
The two terms - venture studios and startup studios - are often used interchangeably, but there are some key differences between the two that are important to understand.
Venture studios are focused on helping companies grow and scale their businesses. They provide funding and mentorship, as well as a space for companies to work. This focus on growth makes them ideal for startups that are looking to take their business to the next level.
Startup studios, on the other hand, are focused on helping companies get off the ground. They provide space and funding, as well as mentorship, but they don't typically focus as much on helping companies grow and scale.
This difference is important because it means that venture studios are better suited for more established startups, while startup studios are better suited for young startups that are just starting out.
How do Venture Studios Compare To Startup Accelerators?
When it comes to choosing between a startup accelerator and a venture studio, there are a few key differences that you should keep in mind.
While both are methods of achieving growth, the stage in which your startup is will have a big impact on which option will be the best fit. Accelerators are good for startups in the early growth stages and can bring key benefits in the form of funding, mentorship and more.
Venture studios on the other hand are more like startup or venture factories. They do help businesses scale, but they are usually targeted towards more established startups that already have an MVP or Product Market Fit.
If you’re a later stage startup with a pre-existing market looking to build a new web or mobile app solution for your industry, get in touch with NineTwoThree Venture Studio. We’re the leading mobile development agency in Boston and we have more than a decade of experience bringing world-class technological solutions to life.