Incubator vs. Accelerator: What’s the difference?

Both give you a jump start in developing your company, each one is very different. Here’s how.

By Ben Keeton

If you’re interested in getting your start-up into an accelerator or incubator there’s no shortage of options in our region. But these terms sometimes get thrown around. What is the difference between the two and why does it matter? We spoke with Bob Saunders, chairman and co-founder of XLerateHealth, a Louisville-based accelerator for early-stage, health-related companies, to find out the difference between the two and learn what a new company can expect at an accelerator.

Medical News: What’s an accelerator?

Bob Saunders: An accelerator typically is a physical space where a group of coaches and domain experts meet with young startup companies in a three to six month program to help them refine their business models through mentorship and guidance. Accelerators offer a cohort of young startups the opportunity to take advantage of rich mentor programs, workshops and group meetings in which the companies undertake rigorous testing of business assumptions and hypotheses through customer discovery in their specific market. Accelerator programs typically culminate in a demo-day, in which startups pitch their ideas to gain visibility and potentially obtain funding.

MN: How is it different from an incubator?

BS: Although both incubators and accelerators help nurture young startups, there are important differences in the type of guidance they offer. Accelerators feature a structured program with a defined start and end date, while incubators often do not have a structured curriculum or a specific timeline. Additionally, incubators tend to require a larger share of equity from participating companies.

MN: What kinds of companies work best with an accelerator?

BS: Early stage companies who require structured guidance and are looking for funding often benefit the most from accelerators. These companies are able to utilize the accelerator’s rich mentor system and learn how to make their businesses more likely to be commercially successful and ultimately attractive to investors.

MN: What are your expectations of that company?

BS: In our accelerator, startups are expected to embrace the lean startup model as developed by Steven Blank, Eric Reis and others. In order to get the most benefit from the program, they are required to get out of the building to do customer discovery, create and test a minimum viable product or service, understand the value proposition of the product or service to their target market. Over the three month session, they participate weekly in business model group discussion meetings in which each company presents their recent customer discovery activities, what hypotheses they have tested, what they have learned, how their business model has evolved as a result of these discoveries and what they plan to do in the coming week.

MN: What is the experience of the company that is going through the accelerator?

BS: This experience is immersive and intensive. Companies are expected to explore the entire ecosystem of their business from face-to-face encounters. Many times in healthcare, this often involves exploring a complex multi-sided marketplace (providers, payors, employers, regulatory authorities and experts, patients and their families, professional organizations, researchers, device and reagent manufacturers, laboratories, distribution channels, etc.). During this experience, companies benefit from their peers through cross-pollination of ideas and network sharing. They often establish the basis for long-term business relationships through the process.

MN: What happens after the startup graduates from the program?

BS: Upon graduation from the program, startups have a highly amplified understanding of their market and competition, and an increased chance of commercial success. Moreover, graduates frequently have established a growing customer base and have successfully raised funding for their business within six months of concluding the program.


XLerateHealth selects eight companies in second class

XLerateHealth announced it has selected eight companies to participate as part of its second class. The accelerator’s 13 -week intensive immersion program began August 4 and runs until “Demo Day” on October 30. Selected companies include:


Blue Sky Case Management is a conflict-free social service agency for Medicaid waiver participants living with Intellectual and Developmental Disabilities (IDD).


Count I t pioneers highly social, inter-company challenges, and automates the connection between corporate charitable giving and employee wellness.


The Gyroskope Family Network is an online content, gaming and social platform built for the aging population.


Lift3D (pronounced: lifted) empowers athletes, patients, trainers and wellness providers with real time movement data and analysis, in order to effect better outcomes and lower costs.


Medbiomarkers is a web platform seeking to accelerate the discovery, validation and utility of biomarkers for health monitoring, diagnostic and therapeutic applications


Myliance has developed the nation’s fi rst Resident Care at Home Concierge Model (RCaHC), which provides end-to-end personalized services (medical and non-medical) for the aging in place and disabled populations.

NEUROATLAS, LOUISVILLE, KY: NeuroAtlas is developing medical software that utilizes 3D non-contrast MR imaging (MRI) to detect and develop comprehensive analyses of several neurological disorders (including an initial focus on early diagnosis of Autism).


Personal Medicine Plus is a mobile health platform addressing underserved Medicaid and rural populations.

— Ceci Conway, marketing consultant, CeCi Conway Consulting