One of the big difference is in how the individual programs are structured. Accelerators programs usually have a set timeframe in which individual companies spend anywhere from a few weeks to a few months working with a group of mentors to build out their business and avoid problems along the way. Y Combinator, Techstars, and the Brandery are some of the most well-known accelerators.
Accelerators start with an application process, but the top programs are typically very selective. Y Combinator accepts about 2% of the applications it receives and Techstars has to fill its 10 spots from around 1,000 applications.
Companies are given a small seed investment, and access to a large mentor network, in exchange for a small amount of equity. The mentor network, typically composed of startup executives and outside investors, is often the biggest value for prospective companies.
Startup incubators begin with companies that may be earlier in the process and they do not operate on a set schedule. If an accelerator is a greenhouse for young plants to get the optimal conditions to grow, an incubator matches quality seeds with the best soil for sprouting and growth.
While there are some independent incubators, they can also be sponsored or run by VC firms, government entities, and major corporations, among others. Some incubators have an application process, but others only work with companies and ideas that they come in contact with through trusted partners. A good example of an incubator is Idealab.
Depending on the sponsoring party, an incubator can be focused on a specific market or vertical. For example, an incubator sponsored by a hospital may only be looking for health technology startups.