Author: Sam Hecht

What is the difference between accelerators, incubators and co-working spaces and which model is best suited for your start-up?

Accelerators and incubators are often used interchangeably when referring to programs for startups, but these two models differ in their functions and structure.

Accelerators. Startup accelerator programs are often structured by a
group of mentors that spend a fixed amount of time with a single company.
During this period mentors help start-ups build their business and solve
problems. To enter accelerator programs, start-ups usually have to apply and,
if accepted, they receive a small investment in exchange for a minor equity
position. Through mentors, start-ups can access their business network and
expedite growth. This program usually ends with a “demo day”, where ventures
pitch to an audience of qualified investors (or accredited investors[1]).

Incubators. Startup incubator programs are usually initiated earlier on than accelerators. Unlike accelerators, incubators operate with an open-ended timeline (i.e., a more long-term approach). Incubators
aid companies in refining their ideas, building their business plan, working on
product-market fit, identifying intellectual property issues and expanding
their network in the startup ecosystem. Incubators do not usually provide
capital to startups like accelerators do, and are often funded by universities
or economic development organizations. The main purpose of an incubator is to
allow a startup to become stronger before becoming independent.

Co-working Spaces. Finding affordable office space is a challenge that startups frequently encounter. Increasingly, startups have turned to co-working spaces where a number of different companies rent workspace and share it together. This is attractive for startups as it is significantly less expensive than having their own dedicated office space and allows for synergies with other start-ups and more established companies.

For more information regarding the above, please do not hesitate to contact us.

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Information made available on this website in any form is for information purposes only. It is not, and should not be taken as legal advice. Should you have any questions, please do not hesitate to contact us (provided that there is no conflict of interest).


[1] See the definition of
“accredited investor” at section 1.1 of Regulation 45-106 Respecting
Prospectus Exemptions,
available at: https://lautorite.qc.ca/fileadmin/lautorite/reglementation/valeurs-mobilieres/45-106/2018-10-05/2018oct05-45-106-vofficielle-en.pdf; and https://lautorite.qc.ca/en/professionals/regulations-and-obligations/securities/4-distribution-requirements-41-101-a-46-201/45-106-prospectus-exemptions/.

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