Corporate Accelerator Definition

What Is an Accelerator, and What Is It Not?

Overview: The first article in this six-part series provides some foundational background on accelerators (what they are and what they are not) as well as a brief history of the rise and growth of corporate accelerators.



Defining Accelerators

The term accelerator is thrown around loosely. Incubators are described as accelerators, accelerators are described as incubators, and the institution that inspired this phenomenon (Y Combinator) calls itself a “new model for funding early stage startups.”

Recently, researchers have tried to mitigate this confusion by clearly defining different startup support models. Two of the researchers on the forefront of accelerator research, Susan G. Cohen and Yael V. Hochberg, define a seed accelerator as follows:

A fixed-term, cohort-based program, including mentorship and educational components, that culminates in a public pitch event or demo-day.” -Cohen, Hochberg

Accelerators are sufficiently different from their incubator counterparts. The chart below provides a visual representation of these distinctions.


Angel Investors



1 - 5 Years


3 - 6 Months





Business model

Rent; non-profit


Investment; can also be non profit



Competitive, ongoing

Competitive. cyclical

Venture stage

Early or late




Ad hoc, HR, Legal


Seminars, classes


Minimal, tactical

As needed by investor

Intense, by self and by others

Venture location




Accelerators, then, are typically of limited duration – a period of immersive education. They help startups define and build products by identifying promising customer segments and by securing resources such as seed capital, employees, and work space.

A huge consideration for innovators and entrepreneurs is that accelerators open doors and networking opportunities. Program participants gain access to peers and mentors who include successful entrepreneurs, program graduates, venture capitalists, angel investors, and corporate executives.

Distinguishing the Corporate Accelerator

The corporate accelerator closely mirrors independent seed accelerators but there are important distinctions: the objectives of corporate accelerator programs are driven by corporate objectives and these programs are largely owned and run by organizations not traditionally in the business of working with startups.

There are also other differences between corporate and seed accelerator programs, processes, and outcomes.

Figure 2: Key differences between independent accelerators and corporate accelerators



Corporate Accelerators



Mostly financial


Mostly strategic

Source of objectives



Sponsoring company


Mostly private (e.g. partnerships)


Corporations. Bias towards large, information firms.

Areas of interest

Mostly technology, but also healthcare, finance, energy, education, and life sciences

Mostly technology, but also media, commerce, finance, healthcare, and education

Industry of interest

Most programs are generalist. Some are specialized


Information, transport, retail, finance, services, healthcare, and others



Selective (some below 2%)


Selective (some below 2%)


Seed stage

Seed / growth stage


Mentorship, workshops, and investor relations

Often add specialized, corporate resources












63% of all programs


Critical part of business model



Demo days


Sometimes internally only



Mostly cash negative

Mostly cash negative


Not relevant for most


Some strategic gains


Some programs are

First positive indications

A Short History of Modern Startup Accelerators

The accelerator concept didn’t emerge in a vacuum; rather, it is a concept that grew out of a need for an improved process behind VC investments.

In March of 2005, Paul Graham and Jessica Livingston came to the conclusion that current trends in VC investment were lacking. They suggested that VCs should make frequent, smaller investments, as opposed to fewer, larger investments. With the help of Robert Morris and Trevor Blackwell, the team, under the name “Y Combinator,” started the Summer Founder’s Program to test out this theory.

The Summer Founder’s Program pulled from a mix of traditional seed funding and business-incubator traits. The program gave bright college students a chance to create something amazing with their friends, while at the same time, allowed Y Combinator to uncover an important new strategy for venture capitalists: making multiple, small, and synchronous investments across a cohort of startups. That first Summer Founder’s Program provided a spark that disrupted the investment world. It essentially created a system that gave venture capital the ability to scale.

Y Combinator created a system that:

  • Targeted a large number of startups, thereby distributing risk and increasing chances of breakout success;

  • Accelerated exits either through acquisition or cohort dropout; and   

  • Improved over time as graduated cohorts came on as both mentors and investors in the system.

Y Combinator is just accelerating a process that would have happened anyway.
— Paul Graham, 2005

This new system did not go unnoticed. The early success of Y Combinator inspired other investors and, within several years, similar programs started to emerge. Early efforts included the following:

  • 2005:  Y Combinator first cohort

  • 2007:  Techstars first cohort

  • 2007:  SeedCamp first cohort

  • 2008:  Dreamit ventures first cohort

  • 2008:  AlphaLab first cohort

  • 2009:  Founder Institute first Cohort

Figure 3: Total US accelerators by year   


The Rise of Corporate Accelerators

Five years after the emergence of Y Combinator, corporations began to experiment with the accelerator model. Among the first corporate accelerators: Citrix (USA), ImmobilienScout (Germany), Microsoft (USA), and Telefónica (Spain).

This phenomenon emerged at a time when firms were holding on to record amounts of cash and were looking for low-risk growth opportunities in wake of the Great Recession. Corporate accelerators allow companies to investigate startups that are aligned with their strategy while leveraging their current workforce and providing minimal amounts of capital. These factors, combined with the increasing interest in innovation among CEOs, created a fertile ground in which corporate accelerators thrived.

By 2016/2017, there were 188 total accelerators and 71 active corporate accelerators.  

Figure 4: Corporate Accelerator Adoption, 2010-2015


Advantages to Using Corporate Accelerators

Corporate accelerators exist at the sweet spot between a number of variables: risk level, capital investment, access to the external ecosystem, and engagement level. This positioning offers a wide variety of incentives for corporations.


  • Access to talent: Startups can provide a source of high-quality talent for the hosting corporation. Through an accelerator program, a corporation is able to observe startup teams and upon completion of the cycle potentially bring team members on board, either through an acquisition or by targeting specific team members.

  • Proximity to emerging technology and trends: Startups occur naturally at the cutting edge of technology. By immersing themselves in the startup ecosystem, corporations gain insights into new technologies and business models (among other things) that can be applied to other business segments.

  • Open-source R&D: Corporate accelerators provide a venue for multiple industry-specific experiments. Corporations can observe how new ideas succeed or fail without having to deal with the costs or logistical hurdles associated with traditional R&D.  

  • Financial returns: If the corporation chooses to take equity stake in participating startups, the corporation may experience financial gains if the startup grows rapidly or is acquired. (Deloitte)

  • Innovative culture: When a corporation is engaged with the startup ecosystem, the entrepreneurial mindset rubs off on the company’s culture. Internal employees have the opportunity to become mentors, attend seminars, and interact with the startups. These new ideas help spur innovation throughout the company.

  • New partnerships: The creation of a corporate accelerator sends a signal that a corporation is committed to engaging the external innovation system. Other corporations within the industry often seek guidance or partnerships with corporate acceleration leaders. (Forbes - Microsoft)


Corporate Accelerator Models

Not all corporate accelerators are the same. According to Yael Hochberg in “Innovation Policy and The Economy,” there are five main variations of the corporate accelerator.

  1. Corporate Involvement in Existing Accelerators: Corporations and their executives can join existing accelerators as mentors or investors.

  2. Outsourcing Accelerator Creation: A corporation can contract with an independent group to run the accelerator on its behalf.

  3. Joint Accelerator Partnerships: Corporations can partner with other corporations to create joint accelerators (usually focused around an industry).

  4. In-House Accelerator with an External Focus: Corporations can create their own internally powered accelerator with outside applicants.

  5. In-House Accelerator with an Internal Focus: Corporations can create a completely internal program that accelerates internal teams.

Each of these models can succeed in an appropriate environment, but the selection of one model over another is dependent on the company's needs and available resources.

Figure 5: Model considerations by dimension

Innovation Horizon




Involvement in Existing Accelerators



Speed, Little resource requirement, access to innovative ideas, builds relationships

Hard to internalize, risk of talent drain

Outsourcing Accelerator Creation



Avoid logistical hurdles, proven success, existing network, external mentors, speed

Price, control/independence, hard to pivot

Joint Accelerator Partnerships



Less resources, industry partnerships, larger network of resources and mentors, more publicity

IP considerations, control/independence, competition over startups, speed

In-House Accelerator (External Focus)



Complete control, clear alignment with strategy, access to innovative ideas

Price, logistical hurdles, speed

In-House Accelerator (Internal Focus)



Innovative culture, employee empowerment, complete control, clear alignment with strategy, complete transparency, ability to stop, start and pivot

Lack of external ideas, speed

While corporate accelerators may seem like all the rage these days, they’re not always appropriate for every company – and they’re not the only option. Accelerators are just one part of the innovator’s toolbox for interacting with the startup ecosystem. Explore other possible innovation tools here.

It’s important to fully understand the corporate accelerator before committing to creating one.  

Up next in corporate accelerators, Accelerator Design – Duration, Location, Focus, and Learning