This document provides an overview of incubators, accelerators, co-working spaces, and internal corporate accelerators. It discusses the reasons for establishing these programs, including driving economic growth, innovation within large companies, and empowering communities. The key aspects of each model are outlined, including value propositions, cash flows, equity structures, and methodologies used. Tips are provided for creating successful programs, such as ensuring the right expertise and networks are in place and that the model is adapted to the local context. The overall purpose is to introduce common concepts around these programs to entrepreneurs and businesses.

1. Incubators,
Accelerators &
Co-­Working Spaces
BRIDGING THE
GAP BETWEEN
IDEAS &
RESULTS

2. Content
1) Introduction
2) Why Create an Incubator, Accelerator or Co-­‐Working Space
3) Incubators
4) Accelerators
5) Internal Corporate Accelerators
6) Co-­‐Working Spaces
7) Creating your own Incubator, Accelerator or Co-­‐Working Space

3. Introduction
Over the past 10 years we have seen a significant rise in the number of
Incubators, Accelerators and Co-­‐working Spaces cropping up across the globe.
This has largely been due to a rise of investment in the startup scene, driven
predominantly by innovations in the mobile, online and digital space.
Incubators and Accelerators aim to help startups mature to a point where
they are viable to attract significant investment. They are very selective in the
Startups they accept because their main source of income is based on an
agreed share of future profits generated by the startups which become
successful businesses.
Co-­‐working Spaces have also become a lot more common due to the rise in
the Startup scene, as small businesses seek to work in shared work
environments which are cheaper than dedicated office space.
As we enter the so called ‘4th
era of Innovation’ corporates are feeling a great
necessity to Innovate. Large corporates, in their aspiration to innovate like
startups, have realized that they can leverage the lessons, tools and
methodologies developed in the Startup scene to drive their own innovation.
As a result corporates are developing Internal Corporate Accelerators.
The following deck is intended to introduce you to some of the common
concepts which are fundamental to these different Programmes. In this fast
moving age of Innovation it is critical for any aspiring entrepreneur or
business to be aware of and understand this particular landscape.
Lets begin…

4. Why Create an Incubator, Accelerator
or Co-­Working Space
There are various reasons why a business, government, research institute or group of entrepreneurs might
want to establish an Incubator, Accelerator or Co-­‐Working Space. Below are just some of the reaons. The
reason or ‘the Why’ will ultimately dictate which Programme is adopted as well as the exact business model
developed. It is therefore important to start with theWhy.
A CSR Programme
Social Incubators and Co-­‐Working Spaces are created
by company CSR programmes and governments in
order to empower and uplift under-­‐developed
communities. They serve as platforms for
community members to work with mentors and
investors to identify opportunities and solve
problems whichexist intheir communities.
A Semi Independent
Corporate Capability to Focus
on Radical Innovations
Businesses create Corporate Incubators
and Corporate Accelerators to create an
innovation capability free from the
beuroctratic and BAU contraints of the
parent Company. This gives them the
necessary freedom to take calculated
risk and be measured against a different
set of performance indicators.
A Business
Because you see it as a business opportunity and you
are passionate about empowering promising
bussinesses and entreprenuers. Well run Incubators
and Accelerators can be highly succesful businesses.
Uber and Linkedin are well known examples of
companies which came out of Acclerators which are
now highly respected and succesful in their own
right.
Drive Growth and Economic
Prosperity
Incubators, Accelerators and Co-­‐Working
Spaces are often set up in specific
locations as part of a strategy to drive
growth.

5. Incubators
Incubators run time-­‐boxed programmes for promising young startups. The application process to get into an Incubator is
usually very competitive. Incubators work with the startups in their programme to get them to a point where they are ready
and worthy offurther investment from a network of Angel Investors which is associated with theIncubator.
Tip 1 Adapt the model to the
realities of your region, if none
exist, build a new one.
Tip 2 Acquire the best expertise.
You will be shaping peoples lives.
Tip 3 Establish a healthy ‘online’
& ‘offline’ network of Investors
and Entrepreneurs.
Angel&Investors
StartupSeed$Funding
$10,000.
$20,000
Initial$
Equity$
+/. 6%
Share$of$
Initial$Equity
Fee$for
access
Angel&InvestorsStartup
Angel&Investors Startup Mentors
Salary
Incubator
Successful&Startups
Receive&further&Investment
Angel$
Investment
Further$Equity$
Share Negotiated
Incubator&Cash&and&Equity&Flow
1.$Startup$gives$up$initial$equity$to$Incubator$+/. 6%
2.$Angle$Investors$Pay$Incubator$to$get$access$to$Startups$at$
the$end$of$the$Incubation$Process
3.$Share$of$initial$equity$given$by$all$the$startups$allocated$to$
Angel$Investors$
4.$Seed$funding$given$to$Startups$to$develop$their$business$ in$
the$incubator$$10,000$. $20,000
5.$Depending$on$whether$Mentors$are$volunteers$or$
employees$they$will$be$paid$a$salary
6.$Startups$who$manage$to$secure$Angel$Investment$after$
from$their$time$in$the$Incubator$give$up$further$Equity$to$
Angel
1 2
3 4 5
Mentorship
Workshops
Hackathons
Exposure&to&Network
Value&Proposition&of&Incubator
. Mentorship$to$early$stage$start$ups$and$
entrepreneurs.$
. Developing$startups$to$the$point$where$their$$
business$ ideas$are$eligible$for$Angle$Investing.$
. Delivering$Investment$Ready$Propositions$ to$
Angel$Investors
Methodologies&Used
. Lean$Startup
. Customer$Development$Cycle
. Minimum$Viable$Product$Development
. Rapid$PrototypingCash$Flow$&$Equity$out$of$Incubator
Cash$Flow$&$Equity$into$Incubator
6
3I6&Month&
Programme

6. Accelerators exist to catapult late-­‐stage startups, whether they have been incubated or not, to exceptional heights.
Through an intense programme they help prepare startups for ‘Series A’ funding which is usually provided by Venture
Capitalist firms. There is a far greater focus on Business development in Accelerators as compared to concept
development during incubation.
Accelerators
Tip 1 Ensure you are tapped
into online platforms where
VC firms can find you.
Tip 2 Ensure that Startups have at
least one paying client by the end of
the Accelerator to prove that it is
client-­‐ready.
Tip 3 Ensure your Accelerator
has adequate resources to
enable the rapid
development of Startups.
VC#Fund
Startup
VC#Funds
Late#Stage#
Startup
Late#Stage#
Startup
Mentors
Some%pay%
Mentors,%others
Don’t.
Accelerator
Successful#Startups
Receive#VC#Investment
VC%Investment
Further%Equity%
Share%and%Profits%
Based%thereupon
Accelerator#Cash#and#Equity#Flow
1) Take%Equity%from%Startups%accepted%into%Programme
2) Receive%a%Management%Fee%from%the%funds%linked%to%the%
Accelerator
3) Capital%is%provided%to%startups%to%develop%during%
Accelerator%Program
4) Payment%of%Overheads%such%as%Mentors%and%Premises
5) Startups%which%receive%further%VC%funding%give%up%
further%equity%to%VC%fund.%Those%which%go%on%to%be%
successful% share%profit%according%to%equity%shares%to%VC%
and%back%to%the%Accelerator.
1 2
3 4
Value#Proposition#of#Accelerator
P Provide%Startup%with%Credibility%by%virtue%of%
its%participation%in%the%Accelerator.
P Help%Startup%develop%their%pitch%to%
Investors.
P Prepare%Startup%for%its%first%Customer
P Provide%Startup%with%Legal%advise%including,%
due%diligence,%Intellectual%Property,%Term%
Sheet%Negotiations,%Valuation.
P Provide%VC%firms%with%viable%and%mature%
Startups,%ready%for%Series%A%funding.
Cash%Flow%&%Equity%out%of%
Accelerator
Cash%Flow%&%Equity%into%Accelerator
5
3#Month#
Programme
Business#Mentorship
Workshops
Exposure#to#VC#Network
Often%VC’s%
demand%
a%seat%at%the%
table%of%a%
startup
Fund#Managers
+/P20%%of%
Funds%gains$18P$20,000%
Capital%provided
Management%
fee
Accelerator
Profit%or%‘Exit%
Share%’According%
to%Initial%Equity%
Share

7. Internal Corporate Accelerator
The Internal Corporate Accelerator is a special class of Accelerator. It is formed as a semi-­‐independent function of a parent
company and is focused on generating ideas, testing these ideas using methods such as rapid prototyping and the customer
development cycle and then further developing successful prototypes into products and sometimes separate businesses.
Corporateaccelerators should operateas semi-­‐independent entities, free from the daily constraint ofBusiness as Usual (BAU).
Tip 1 Must ensure that corporate
accelerator is well networked
outside of the parent organization.
Tip 2 Funding for projects
should be appropriately sized at
different stages of development.
Not too much and not too little.
Tip 3 Ensure that the leaders and
Mentors allocated are the right
people for the job. This may require
external hires.
Value Proposition of Corporate
Accelerator
-­‐ A structure relatively free from the day
to day constraints of BAU
-­‐ A place to test ideas and fail fast
-­‐ New streams of revenue from spinoff
products and businesses
-­‐ Enables the realisation of an innovation
mandate.
-­‐ Radical and disruptive innovation
-­‐ Give an organisation the ability to
adopt the lessons learnt from the
startup sector to drive and implement
new ideas.
Methodologies
-­‐ Rapid Prototyping MVP
-­‐ Customer Development Cycle
-­‐ Lean Startup
Internal(Corporate(Accelerator
Parent(Company
Portfolio(of(spinoff(products(and/or(businesses
Dedicated(Budget(Allocated
(Accelerator(can(motivate(for(more)
Incubator(given(relative(freedom(
to(allocate(between(projects
Share(of(Profits
reinvested(in(
Accelerator
Share(of(Profits(Taken(
by(Parent(Company

8. Co-­working Space
Co-­‐Working Spaces are about creating a vibrant community for small businesses and entrepreneurs where
they can work and if desired network and collaborate with each other. Co-­‐working spaces provide all the
infrastructure and services of a fully equipped office space. These resources are shared by the occupying
entrepreneurs and business who all pay rent to theowners of thespace.
Tip 1 Engineer the facilities
and services on the real
needs of the local
entrepreneurial community.
Tip 2 Geographical Location is critical.
Ensure it is located near an existing
community of Entrepreneurs or has
good transport links
Value Proposition of Co-­‐working
Space
-­‐ Bringing creatives and business
people together to create a vibrant
multidisciplinary community.
-­‐ Some have a focus on social
upliftment, in which case they
provide a shared office & or
studio/workshop infrastructure that
would otherwise be lacking in the
community.
-­‐ Provide local community of
Entrepreneurs with Seminars,
Workshops, training, networking,
hackathons.
-­‐ Hot desks for daily, weekly,
monthly, annual rental.
Tip 3 Offer services
based on the real needs
of the entrepreneurial
community
Co-­‐working Space Cash Flow
1) Co-­‐working Space
receives rental.
2) Some Co-­‐working Spaces
receive Subsidization
3) Main expense for a Co-­‐
Working space are
overheads
Co#working*Space
Government*or*Corporate
Business,
Entreprenuer,* Freelancer
Overheads
Some*Co#working*
Spaces*are*subsidised*
but*usually*they*
are*private*and*
independent*
businesses
Rental*+*Service*Fees
Seminars
Workshops.
Training.
Hackathons
Rental,*Staff,*
Essential*Service
1 2
3

9. Creating your own Incubator, Accelerator
or Co-­Working Space
Create a model for your local
context
It is important to recognize that the exact
business model which you use and value
proposition you offer should fit the constraints,
challenges and opportunities of your available
network of stakeholders. You cannot simply cut
and paste a successful model from elsewhere in
the world and expect it to work.
Create a clear vision and plan
-­‐ Ensure you have a good value proposition for
all stakeholders involved.
-­‐ Design your model and Business plan. Include
a good Digital Strategy.
-­‐ Assemble the appropriate capabilities:
business analysis, prototyping, Technical
capabilities, Entrepreneurial Credibility and
Industry Experience.
-­‐ Build a strategic network of Entrepreneurs,
Investors and Educators.
Grow organically
In the case of Corporate Accelerators It is always best
to start with at least one project identified as having
high potential and developing an accelerator around
it. Allocate the relevant people and team to optimise
success. Thereafter allow the accelerator to grow
organically according to what works and what
doesn't’t. Do not make the mistake of thinking that
by creating a magnificent space, great ideas will
necessarily follow and be successfully accelerated.
This almost never happens
Work hard to find the right people to
work with you in creating a success
The strengths of your partnerships will define your
success. Reputation is key to the success of
Incubators and Accelerators.
Get in contact for advise on how we may be able to
assist you in creating an Incubator, Accelerator or Co-­‐
Working Space. Tel: +27 11 463 2205

10. Contact us
24 Peter Place, Lyme Park,
Bryanston, 2191, South Africa
Tel: +27 11 463 2205
Email: ia@innovationagency.com