The idea of supporting startups through incubators and accelerators has been in use since the late 1970s. Maintaining growth in a startup by yourself is not easy, no matter how great the idea is. Therefore, startup founders begin seeking assistance and support in the early stages of their business in order to develop a refined process and avoid pitfalls that can hamper their success.
Startup incubators are organizations that support young entrepreneurs to set their companies by offering them mentoring and networking opportunities. You will find free shared or low-cost workspaces, one on one training and mentorship, investors’ contacts in case you’re looking for funding opportunities, industry-relevant business resources, and valuable perks to expedite growth.
The article will review top startup incubators that can help your business grow.
Pros and cons of getting a startup incubator
While an incubator will give your startup the powerful start that it badly needs, joining such an organization has its drawbacks as well. So, you need to learn both the pros and cons before choosing an incubator.
- They offer startup development programs to aid their business, such as workshops and panel discussions. They also help reduce overhead costs because they are affordable, which allows them to put the extra money back into the startup business.
- It’s easier to access investors when enrolled with an incubator than when you’re growing your business alone.
- You don’t have to worry about some business essentials such as equipment, Wi-Fi, or administrative support.
- They give you an opportunity to network with other startup founders who are trying to build their businesses.
- Submitting an application to an incubator is a competitive and rigorous process.
- Founders are expected to disclose their entire business plan and activities.
- They expect you to remain with them for 1 or 2 years as well as stick to a rigorous schedule.
- An incubator is your boss, so you can’t come and go as you wish. They are investing in the success of your business, so they have to keep on tracking your progress.
Notable Startup Incubator
This USA-based incubator is regarded as the leader in the startup world. It’s credited for supporting startups such as Dropbox, Reddit, Airbnb, Weebly, and Instacart.
The incubator was founded in 2005 by Paul Graham, located in Silicon Valley, and has invested in the success of more than 1500 startups. Since the incubator receives a lot of applications, they have a very stringent selection process, and investment is made through SAFE.
The incubator accepts applications from entrepreneurs from different locations and allows them to introduce new technology in the market irrespective of where they come from. The incubator offers several mentor-led acceleration programs to support founders actualize their idea as well as progress all the way to the IPO stage.
Techstars VC capital fund was invested in companies such as Sendgrid and Uber.
The incubator is based in the UK and has a different approach because it believes that young entrepreneurs need not money but intelligent human input. Based on its philosophy, the incubator helps startups attract a network of suitable advisors who helps them to overcome common challenges as quickly as possible.
Therefore Seedcamp offers training, consultancy, and other services to help new businesses succeed in the market. For example, the incubator helped TransferWise to become a unicorn.
The California-based incubator manages investment for startups in up to 74 countries. The incubator’s 4-month seed program aims at growing an ecosystem of skillful founders across the world. Mountain view-based incubators offer seed funds in the initial phase and an acceleration program in addition to guidance on how to create partnerships and make contact with investors and other companies.
500 Startups has a mentor network and investment department that supported Facebook, Google, PayPal, YouTube, Instagram, LinkedIn, Yahoo, Apple, and Twitter.
This is a Texas-based incubator that supports early-stage companies by offering them a free-working space, a network of entrepreneurs and top investors as well hosting credits. To improve the startup’s chances of fundraising, Capital Factory provides assistance through its investor relations associate.
The India-based incubator provides startup support and venture capital ranging from $500,000 and $1 million. In addition, the incubator offers upskilling, tutoring, guidance, networking in conjunction with venture catalysts and industry gurus such as IBM, Amazon, and Microsoft.
Further, founders get help with pitching, reviewing, and shadowing in addition to seminars and co-working spaces in big cities such as Doha, Hong Kong, and London.
The incubator was founded in 2010 and runs financial technology, Internet of Things, food tech, and insuretech programs in locations such as Dublin, Amsterdam, Dubai, London, Mexico City, Singapore, Mumbai, and more.
The firm’s mission is to support early-stage founders to grow their firm by tapping into the international and extensive network of several consultants, investors, partners, and alumni founders.
What a Good Incubator Should Offer You
Support: A good incubator should support you to grow your business for the sake of the local economy or monetize equity in new companies that they support. This includes assistance with business basics resources, work essentials such as office space, internet, digital marketing activities, and more.
Mentorship: Incubators should offer advice and capital to steer you in the right direction. Through their mentorship programs, young entrepreneurs are helped to avoid making costly mistakes as they grow their businesses.
Networking Opportunities: An incubator should provide founders with numerous networking opportunities, team-building occasions with fellow entrepreneurs as well as a robust business partner network.
Although not all successful businesses passed through incubation programs, it’s recommended that young entrepreneurs work with an incubator because they will show you several shortcuts. You will also get powerful connections, introduce you to investors, and help you build a strong business partner network.
Many incubators are working with businesses across the world, but the article has only reviewed 7 of them. It will be helpful to research others so that you can pick one that fits well with your business model.