The Pros and Cons of Industry-Specific Startup Incubators

Startup incubators (or accelerators) have gotten very popular lately because they provide a lot of benefits to startup founders, from investor signaling to founder mentoring to fundraising opportunities. Their demand has risen so high that industry-specific incubators have appeared.

This is a natural evolution of the startup incubator model. Since each industry has its own dynamics, founders of incubators probably realized they can accelerate startups that much quicker if they provide industry-specific benefits.

But is this true? Are industry-specific incubators worth it?

On a high level, only a few incubators can really make a significant impact for a startup, whether they are general or industry-specific. If you are comparing these types of incubators for your venture, here are some pros and cons to consider:

Horizontal (general) incubators have:

PROS
  • Access to a wider network of investors
  • Access to a wider network of founders in their alumni network
  • A higher chance of getting you press in general tech publications
CONS
  • Little to no industry-specific guidance
  • Little to no industry-specific connections
  • A lower chance of exposing you to targeted and relevant investors
  • A lower chance of getting you press in industry-specific publications
  • A lower chance of industry-knowledgeable founders in their alumni network

Vertical (industry-specific) incubators have:

PROS
  • Access to targeted and relevant investors
  • Access to industry-specific guidance
  • Access to industry-specific connections
  • A higher chance of getting you press in industry-specific publications
  • Access to industry-knowledgeable founders in their alumni network
  • CONS
    • A smaller network of investors
    • A smaller network of founders in their alumni network
    • A lower chance of getting press in general tech publications

    I’m sure you can think of some exceptions to these points. Some vertical incubators are great at getting general press, for instance. The right choice for you depends on your needs, particular industry, and the strength of the industry-specific incubators open to you.

    It is also important to note that some incubators don’t mind if you participate in multiple incubators. There have been a few startups that have participated in both a general and an industry-specific incubator.

    Are there any other pros and cons I’ve missed? What do you think?

    Author: Mike Lee

    An idealistic realist, humanistic technologist & constant student.

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