Accelerators/incubators are the hotbed of startups. If you are a startup and you have not received any funding, there is no more worry. This planet is now filled with startup incubators who will be happy if you bask in their love!
I spoke to a number of startups and they mentioned that the volume of incubators never helps them. Most of the time they go frantic since they cannot decide where to apply or join. The biggest part is what incubators are offering and what or how much are they taking in form of equity. Naval Ravikant, the founder of Epinions, AngelList and Venture Hacks, calls these incubators the new age school for entrepreneurs.
What is a business incubator?
A business incubator is a program that has been designed to help entrepreneurs develop successful companies. These incubators are hubs of resources and services and powerful network of people. The history of incubators dates back to 1959 in USA with the commencement of the Batavia Industrial Center under the leadership of Joseph Mancuso in a warehouse. After that this concept of incubation started spreading out to UK and Europe. The National Incubation Association in US has around 7000 incubators across the globe. Now it has reached a stage of a renaissance since the last few years as startups are rising to change the world for the good. Today apart from physical incubators, there are virtual incubators as well.
Why do startups look out for incubators?
StartupsFM spoke to a handful of entrepreneurs across US, UK and Asia and many have varied views on what they look out for. Some say that they look at the portfolio of an incubator while some look out for mentors or even lucrative funding options. What a startup needs depends highly on what stage it is. If a startup is having steady revenues and trying to grow, it will use an incubator to expand. Similarly a startup which is still in its nascent stage will use an incubator as their launch pad. Many startups in fact also look to join an incubator to get into US and grow from there. This is applicable to those who stay in distant land and cannot access the active startup ecosystem in US or as found in Europe. The money is always beneficial but more than that it is the powerful networking and the mentoring that matters the most to a startup planning to go big. There have been notable stories like Dropbox, Airbnb and more who went big after they were incubated in Y Combinator.
How should you select an incubator for your startup?
Do your homework for the incubators you shortlist
Just don’t join an incubator because it promises some money in some far distant land. Do your in-depth research on the incubator. Go out and ask questions on popular forums, use Quora to get your answers. The best is if you can get in touch with some previous startup who has been through the same incubator. Get hands on knowledge on the incubator and then hit the apply button.
Check proven track record
You will always want to spend those three or six months somewhere worthwhile. It is always worth traveling and taking all that headache if you get into a well acclaimed incubator. Check portfolio and also cross-check them as much as possible. Don’t leave a stone untruned to get deeper into those vital statistics. See who is the founder of the incubator. Find him/her on Linkedin and try to connect.
Select a niche incubator
Join incubators that caters to your domain. Now if you are starting up and innovating something related to Green Revolution, there is no point joining a Tech incubator. That is always a misfit.
Look out for good mentors
Mentors are investors since they help drive innovation. It is important to have mentors in an incubator just like having a good professor. They are the ones who give back a lot to the startup ecosystem and has real time knowledge of executing ideas. They help startups develop valuable relationships and a strong network.
Show me the money!
See what incubators are offering as perks, funding and help. While they are offering, they will also have their own share in form of equity. These should be made transparent. The money is definitely a great boon but more important is how much your startup is growing and how fast. Demo Day is another marquee advantage that incubators offer where you get to pitch in front of innumerable potential investors and partners.
Check out top 15 Incubators:
- Y Combinator
- DreamIT Ventures
- LaunchBox Digital
- Capital Factory
- Ben Franklin TechVentures
- Environmental Business Cluster
- EnterpriseWorks at the University of Illinois
- Tech Wildclatters
- The Brandery
Want to know more? Reach out to us. We would be happy to help.
Image Courtesy: From Msnscarlson’s Flickr stream
Written by Debleena, Editor-StartupsFM