Incubators, Accelerators, and New Choices for Entrepreneurs

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Incubators and Accelerators

Wild times in Southern California—VC firms contracting and incubators/accelerators exploding!  You can’t turn around in SoCal without running into new incubators.  No one even seems to know the exact count, but its somewhere between 20-30, as of last week.

Ben Kuo at SoCal Tech did us all a big favor by publishing his Complete Guide to Southern California Incubators.

But no one is talking about the tradeoffs (yet).  Take Incubators vs Accelerators–incubators typically expect you to BYOM (bring your own money), while Accelerators offer between $20-50k investments to those they admit.  The catch?  The accelerators want a substantial chunk of equity in exchange for that cash.  After all, it is a business and the owners of the accelerator clearly expect that equity to pay off.

Is it a good trade?  That depends upon the amount of “acceleration” you get.  If the mentorship and purported powerful investor networks pay off, it’s a steal.  If not, that’s expensive equity.

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