China is still considered by many in the West to be a manufacturing hub and a tech laggard. This view, which was true for most of the early 2000s, is rapidly changing because of the recent boom in technology investment. Startups are emerging by the thousands throughout China. Beijing is considered the “Silicon Valley in China.” Today, thousands of startups go through an accelerator or incubator program in China each year.
Many people mistakenly believe an accelerator and an incubator are the same. The major difference between an accelerator and an incubator is that an accelerator aims to accelerate an existing business, whereas, an incubator aims to turn great, innovative ideas into a business. So, accelerators generally focus on scaling a business while incubators focus on innovation.
Accelerators are essentially ‘training schools’ for expanding startups. Accelerators generally offer startups a specific amount of capital and guidance in exchange for a percentage (usually 6-8%) of ownership in the company. The capital contribution and ownership stake differs from accelerator to accelerator. Accelerator programs are short, 3-4 month programs that help startups run and expand their business, often with the ultimate goal of finding additional investors. Training usually includes workshops and mentorships with industry experts. The culmination of most accelerator programs is “demo day,” where each startup showcases its company through a pitch. Many accelerator programs focus on a specific industry or product/service type.
Incubators tend to be less structured than accelerators and take a much larger share of ownership. An incubator brings in an outside management team to manage an idea that was developed internally. Incubators can be sponsored or run by VC firms, government entities, or corporations. Like accelerators, incubators tends to focus on a specific product/service type or industry. Below are some of the top Chinese accelerators and incubators by city.
Beijing:
Microsoft Accelerator Beijing offers a 4-6 month accelerator program for later-stage startups looking to scale their business.
Sinovation Ventures is an incubator that invests in Series A and Series B stage startups in specific technology areas, such as connected devices (IoT), developer tools, and EdTech.
Shanghai:
Chinaccelerator accepts two classes of startups each year to move to Shanghai for three months to participate in its accelerator program. Chinaccelerator focuses on internet startups.
Founders Space offers an accelerator program in Shanghai to startups of different types and industries.
InnoSpring helps startups expand their business in China and around the world.
Shanghai Valley helps global entrepreneurs successfully enter the Chinese market or utilize resources and capital in China to grow in the international markets.
Startup Leadership is an incubator for innovators worldwide with a Shanghai branch.
Shenzhen:
HAX—HAX accepts two classes of startups each year to move to Shenzhen for 111 days to participate in its accelerator program. HAX focuses on hardware.
Deciding whether to apply to and take part in an accelerator or incubator program is a very company specific and personal decision. There are many options both in China and throughout the world. The pros and cons should be carefully considered and weighed. If you have more accelerators and incubators to add to this list, please let us know at editor@globig.co.
To learn more about Globig’s decision to participate in an accelerator program, read our COO Ann Stewart Zachwieja’s article, The Startup Dilemma: Do We Have Time To Accelerate? MergeLane is a Yes.
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