Business Incubators FAQs

Business Incubators are organisations developed to reduce the chances of failure of start-ups by offering sustainable and fundamental entrepreneurial support. Incubators enable entrepreneurs and innovators to find the necessary support and resources to build and maintain a successful start-ups. Incubators are seen as a powerful tool for supporting both small business growth, and a variety of socio-economic needs, such as job creation, technology transfer, reviving economic activities at local and regional level, poverty alleviation and economic integration of previously disadvantaged groups.

Business incubators in South  Africa are funded by government grants from various government entities. Others are funded private sector companies, investors. Others are self funded from the proceeds (rents or membership fee) received for services provided to the participants.

Business incubators generate income by charging participants for the services they render. Most incubators do not make money as they are created to build a business community around them. They therefore, survive through receiving grants from stakeholders 

Accelerators "accelerate" growth of an existing company, while incubators "incubate" disruptive ideas with the hope of building a business model and company.

Accelerators therefore, focus on scaling a business while incubators often focus more on innovation and business development.

Accelerator programs usually have a set timeframe in which individual companies spend anywhere from a few weeks to a few months working with a group of mentors to build out their business.  

Typically, the accepted companies have already demonstrated fast growth and a minimum viable product (MVP). They’re often given a small seed investment and paired with mentors from the accelerator’s vast network.

Incubators, on the other hand, begin with companies or single entrepreneurs that may be earlier in the process and they do not operate on a set schedule. Incubation programmes can take up to a period of 3 years.