I’ve always thought “brainchild” is a very appropriate term for an innovative idea. Because, in many ways, ideas really are like children. Give them the right environment and support, and they’ll flourish – developing and growing to reach their full potential - in many ways like a child.
At PwC, we support many entrepreneurs and their ground-breaking ideas as they progress from initial concept to commercial reality. For example, PwC Sweden supports the non-profit Norrsken Foundation, to help ‘impact entrepreneurs’ build businesses that help solve the biggest global problems, supported by mentoring from PwC Sweden. PwC UK’s Social Entrepreneurs Club enables ambitious social enterprises to tap into the skills of the firm’s people to support their growth.
For entrepreneurs starting out, there are many other sources of support and advice. Two that you’ll hear mentioned most often are ‘incubators’ and ‘accelerators’. So, what are these – and how do they differ?
First, incubators. As their name suggests, these play a role when the startup idea is still very much in its infancy. To join an incubator, you don’t even need to have set up a company yet: you just need an idea with potential, and the drive to bring it to market.
Many incubators are part of bigger organisations – universities, corporates, even governments – with an interest in commercialising innovation. And they often specialise in specific sectors like healthcare, or technologies like Artificial Intelligence or robotics. But what they nearly all share is that they provide coworking spaces that encourage collaboration and cross-fertilisation of ideas across a like-minded community, supported by advice from seasoned specialists.
While the COVID-19 pandemic has seen incubators’ physical coworking spaces go virtual, the collaboration they enable is continuing. And incubators also offer access to sources of early-stage funding to get a concept off the ground. They’re a particular focus for ‘angel investors’ seeking promising ideas that could pay off handsomely when they take off.
If incubators support the early stages of an innovation’s life, accelerators take it through school and out into the wider world. But while this journey normally takes years, an accelerator aims to do it in a much more condensed time frame – usually somewhere between three months to a year.
Accelerators achieve this by having a proven, repeatable process for scaling up innovative ideas, supported by professional mentors and advisers – consultants, accountants, lawyers, industry specialists, venture capitalists and so on – and sometimes a permanent advisory board of experts. Not surprisingly, they have very stringent entry requirements, with ratios like 100 applicants for every accepted entrant being common. Traditionally, those that have succeeded in getting in have had to relocate physically to where the accelerator is based, although that is becoming less of a requirement due to COVID-19.
Again, a vital aspect of the accelerator value proposition is access to capital. The programme usually ends with a pitch or ‘demo’ day, where the entrepreneurs present their ideas to an audience of venture capitalists and other investors. The goal is to tell a compelling story to convince them of the concept’s commercial potential.
Even when a company graduates from an accelerator with some venture capital behind it, it’s still considered a ‘start-up’. The goal is to progress from there to ‘scale-up’. PwC’s support for entrepreneurs with this step continues through several closely-tailored services – such as our PwC UK and PwC Germany Raise programme and ‘matchmaking’ with investors for companies needing funding; and our Scale programme, to help those managing a rapid growth trajectory.
As Blair Sheppard, Global Leader, Strategy & Leadership for the PwC network, discussed in his recent article and presentation at our PwCxSlush event, the world desperately needs entrepreneurs and their innovative ideas to address the huge challenges we face. Helping to nurture and develop these ideas is something everyone can get involved with and something I’ve enjoyed over the course of my career. Get in touch if you’d like to discuss whether an incubator or accelerator is right for your brainchild.
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