Funding without equity
Same goal, different game. Here’s how to choose the right one for your startup.
Let’s talk about two startup buzzwords that get tossed around like confetti at a founder brunch: incubators and accelerators. They sound kind of similar, they both promise mentorship, and they both dangle the elusive carrot of funding, but they’re far from interchangeable.
If you're a first-time founder wondering whether to join that local university incubator or shoot your shot with a competitive accelerator that has a 1.5% acceptance rate, this one’s for you. We’re breaking down what each actually does, how they differ, and most importantly, which one can help you get funded faster.
Read this article till the end to get absolute clarity on the incubator vs. accelerator dilemma and make the best decision for your startup’s growth and fundraising journey.
Incubators: The Slow-Cook Option
An incubator is like the cozy coworking space version of startup support. These programs are generally low-pressure, low-stakes environments designed to help you get from an idea to something that kind of looks like a business.
You’ll usually get:
● Access to mentors
● Office space or tools
● Programming around idea validation
● Lots of time (they tend to last 6–18 months)
Here’s the catch: most incubators don’t invest capital, and many don’t even take equity. Instead, they’re often backed by universities, local governments, or nonprofit organizations focused on ecosystem building.
For example, a first-time founder in Chicago joined the University of Chicago Polsky Incubator with nothing but an idea for a food delivery system designed for elderly users.
Over 12 months, she refined her idea, built a scrappy MVP, and connected with local advisors, all without giving up a single share of her cap table.
Accelerators: The Startup Pressure Cooker
If incubators are gentle, accelerators are… let’s call them “motivationally intense.” These are fast-paced, equity-taking programs designed to rocket you from early traction to a venture-backable startup in a matter of weeks, usually 10 to 16.
Accelerators typically offer:
● Seed capital (often $100–$150K in exchange for 5–7% equity)
● Intense mentorship and workshops
● Investor intros (especially during a flashy Demo Day)
● A firehose of pressure, pitch prep, and growth hacking
For example, a healthtech founder with a working prototype joined Techstars Boston, received $120K in funding, and walked out of Demo Day with 3 term sheets and a $1.2M seed round. Why? Because accelerators know how to position startups for funding, they coach you on storytelling, traction metrics, investor targeting, and FOMO generation.
That said, accelerators are not for the faint of heart. You need some traction, a prototype, a few users, early revenue, or even a waitlist. If you're still debating your startup's name, you're too early.
Think of incubators as your startup sandbox: a safe space to build something without the ticking time bomb of investor ROI breathing down your neck.
Key Differences (Without the Chart, Just Real Talk)
Timing & Stage: Incubators are perfect for idea-stage founders when you’re validating a concept, building MVPs, or pivoting ten times before lunch. Accelerators are for startups with early momentum looking to speed-run toward funding.
Funding: Incubators often offer no capital. Accelerators almost always do, but they take equity. That can be worth it if they help you raise big later, but make sure you’re not giving up 7% of your company for “mentorship and vibes.”
One SaaS founder joined an incubator attached to a local university and left with $5K in grant money, an MVP, and 3 beta users. A year later, she entered an accelerator, gave up 6% equity, and raised $750K in seed funding 3 months post-graduation.
Pace: Incubators are a marathon. Accelerators are a sprint with no bathroom breaks. Choose based on your personality and product stage.
Network Access: Accelerators usually open bigger doors faster; think warm intros to VCs, weekly pitch practice with ex-operators, and Slack channels with 300 other alumni who’ve raised $20M+. Incubators are more focused on community, not capital.
Which One Gets You Funded Faster?
Short answer: Accelerators, hands down, if you’re ready.
Investors trust the brand-name ones (Y Combinator, Techstars, 500 Global) and often show up at Demo Day ready to write checks. YC grads have raised hundreds of millions post-program, but even smaller accelerators can give you the structure and storytelling you need to get funded.
A founder I know applied to YC after building a product inside a nonprofit incubator. The incubator gave her 12 months to explore. YC gave her 12 weeks to raise $1.5M.
BU, T, and this is crucial: if you’re too early and you jump into an accelerator prematurely, you’ll burn through your best intro opportunities too soon. Worse, you’ll hand over equity without being investor-ready.
How to Decide Which One’s for You
Ask yourself:
● Do I have a working MVP or just a deck and a dream?
● Am I looking for support or speed?
● Can I confidently pitch this in front of investors in 90 days?
● Am I okay giving up equity now, or do I want to wait until my valuation climbs?
If your answers are mostly early-stage, “I need time to figure this out” vibes, start with an incubator. If you’re saying “we’re live, growing, and ready to raise,” apply to an accelerator and start rehearsing your Demo Day walkout song.
Let’s Wrap It Up
Here’s the kicker: many successful startups do both. Start in an incubator while you validate, prototype, and define your roadmap. Then, once you’re growing and ready to raise, jump into an accelerator for the investor polish and capital boost. That’s exactly what one edtech founder did. She began with a year-long residency at a community incubator in Baltimore, built traction in underserved schools, and then joined 500 Global to prep for VC funding. One year later, she raised a $1.1M seed round and didn’t regret a single step.
Curious about which path is right for your startup? Visit Leadpreneurs for tailored advice and tools to help you navigate incubators, accelerators, and beyond.
Thank you for reading. Here’s to building smart, funded, and fearless ventures!