Incubators, accelerators bolster startup economy.

• Author: Garvey, John
• Position: STATE of the STATE

Colorado's business incubators and accelerators are two reasons the state ranks so highly on startup growth and entrepreneurship. And while both are types of startup assistance organizations (SAO), they're basically apples and oranges.

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"Our job is to serve entrepreneurs, and our belief is that if we create great entrepreneurs, they'll create great companies --and those companies will be investable," says Toby Krout, managing director of Boomtown, a Boulder-based accelerator.

Accelerators apply a cohort model in which about 10 startups go through what amounts to a three-month boot camp, culminating in a demo day for investors. By providing funding, mentoring and introductions to capital and technical assistance in exchange for equity, they hope to propel young companies into their next stage of growth. Accelerators are sometimes criticized for serving investors over entrepreneurs, but Krout maintains that's not the case. Since January 2014, Boomtown has helped more than 70 companies achieve such milestones as seed funding and new product launches. More than 80 percent of Boomtown's alumni companies are in operation, with 71 percent generating revenue.

With a much longer time frame, often exceeding two years, incubators provide low-rent office space and other support, and place more emphasis on entrepreneurial skills training. Typically nonprofits, they generally aim to promote regional economic development and job growth by producing self-sustaining companies.

In contrast to accelerators...