What Is a Business Accelerator?

What Is a Business Accelerator?

Published: November 16, 2021

What Is a  Business Accelerator?

If you’ve watched the comedy TV series Silicon Valley, you probably have a vivid, if dramatized, mental image of what a business incubator is. Many people confuse business accelerators with incubators and similar programs. However, an incubator is a one-to-five-year program with minimal mentorship that can be entered early or late in a businesses life. A business accelerator, on the other hand, has the potential to offer more benefits and is designed only for the early stage of a small business.

What Is an Accelerator in Business for Small Businesses?

A business accelerator program, also known as a small business accelerator, supports early-stage businesses who intend to scale up rapidly. It provides entrepreneurs with financing, training, and mentorship. Unlike similar programs, accelerators are cohort-based, meaning that entrepreneurs are admitted in a “class” or cohort of up to fifteen business owners. 

This allows would-be small business CEOs to learn from and network with peers as well as mentors. Accelerator programs typically culminate in a “demo day,” on which entrepreneurs can pitch their companies to multiple investors.

The History and Current State of Business Accelerators

The first accelerator was launched in 2005 by an organization called Y Combinator; TechStars started the second a year later. Today, both are globally considered the gold standard in accelerators. Other such programs began to be widely implemented after 2008, and as of 2015, there were over 150 accelerators in the US.  

Who Can Benefit From Business Accelerator Programs?

  • Businesses poised to fundraise in general. Because accelerators are designed to help new businesses procure funding, they’re best for Businesses at a stage in which a focus on fundraising is appropriate.
  • Businesses seeking an edge on investor interest. “Graduating” from a high-quality accelerator program with brand recognition can make some investors more confident in a new company’s ability to thrive—and therefore more confident in backing them.
  • Businesses interested in objective evaluation. Because starting a new business can be both a lonely and risky process, some budding CEOs value the opportunity to compare their progress with that of others in their position and get feedback from mentors.
  • Community-minded businesses . Accelerators give new business owners interested in community-building a better chance at networking and collaborating with other local business owners. Accelerator graduates may also mentor future cohorts in a program.

How to Get Started With Local Business Accelerators

If you’re ready to accelerate your business growth, do your research to find the best business accelerators in your community or region. If you’re a growth-minded business in the Northwest Chicagoland area, consider applying for admission to a business accelerator program focused on one-on-one coaching with Next Level Northwest.  

Next Level Northwest is a business acceleration public-private partnership serving the Northwest Chicagoland region. We support regional and local businesses through collaborative and innovative initiatives to help grow the economy. Download our Program Overview (PDF).

Ready to take your business leadership to the next level? Download and prepare your application following this process today!