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CMA Final · Entrepreneurship and Startup · The Entrepreneurial Ecosystem

An incubator in an Indian university offers a student venture subsidised workspace, mentoring, access to a network of investors and shared services over a fixed period, usually in return for a small equity stake or fee. How does an incubator mainly differ from an accelerator?

An incubator nurtures very early-stage ideas over a longer, flexible period with space, mentoring and networks, whereas an accelerator runs a short, intensive cohort programme for ventures that already have a product, aiming to speed up growth and investor readiness. The other statements wrongly describe their funding or regulatory roles.

  1. AAn incubator invests only in listed companies, while an accelerator invests only in unlisted ones
  2. BAn incubator nurtures very early ideas over a longer, flexible period, while an accelerator runs a short, intensive, cohort-based programme for ventures that already have a product to speed up growthCorrect
  3. CAn incubator provides debt funding only, while an accelerator provides grants only
  4. DAn incubator is a government regulator of startups, while an accelerator is a stock exchange platform

Explanation

Incubators support nascent ideas with space, mentoring and networks over a longer and flexible duration. Accelerators run fixed-term, intensive cohort programmes for ventures with an existing product, aiming at rapid scaling and investor readiness. The other options misstate the investment type, funding form or institutional role of both.

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