How to Choose a Startup Incubator
Startup incubators begin with companies that are usually earlier in the process, they do not operate on a set schedule, and are mostly based on ideas.
Incubators are organizations which aim at fast-tracking the growth and success of startup companies through a collection of business support services and resources that could include capital, physical space, common services, coaching, and networking connections.
The aforementioned areas are designed to support startups in gaining experience and having a mentor from their own industry who has in depth knowledge of the market they are working in. They provide effective business mentoring and technical assistance for startups that want to develop or expand.
To be competitive, a company has to pitch early and often. If you can't express your company’s value proposal to friends, family, and peers, then your company’s story won't connect with customers or investors. You have to prove your startup is worthy, how it’s different from others, and offer your team’s expertise in the area.
With that being said, working with the right incubator is vital for the startup to receive the best support and direction and thus, helping the startup grow. So it is necessary to study a few elements before choosing an incubator.
Choose the Location
As fun as it would be to pack up your bags and move to Silicon Valley, it might not be the easiest or best option for your company. It all depends on your business manifesto, and your target audience. It is usually better to choose an incubator close to where you live. Mostly because you would know the demographic and geography better than anywhere else, and would know what was more readily available to you. However, if your idea is so brilliant that you are aiming at one of the top incubators in the world, especially if you’re a tech startup, than it would ultimately be better to move to Silicon Valley or San Francisco.
Match your Needs
Different startups have different needs. One may require advice to run the business, one may require funding, etc. So it is important to align the incubator focuses with your company’s needs. There’s no point in working with an incubator if their focus is on funding, while yours is building a network, and vice versa. So, the first thing you need to do is to create a needs list for your startup and check which incubator matches your needs.
Contact the Alumni
Research the list of companies that have benefitted from the incubators and consult with them. Ask them about their former experiences of the incubator.
In addition to that, review how these programs support startups after they have "graduated." Do they just terminate the relationship, or does it become the beginning of a long term relationship that you will benefit from in the long run?
Similarly, you should look at the growth and cohesion of the companies who have “graduated”; the success of the incubation process can be judged based not only the growth of the firms but also whether or not the teams were able to stay together in the long run
Look at the Mentorship
Having the proper environment can make a difference in the outcomes of a startup. Besides looking at the total number of mentors who participate in an incubator, startups should also be very aware of who those mentors are. Ideally, the background and experience of a program’s mentors should be reflective of the industry your company is in and what you hope to achieve. Ultimately, you should find people from whom you are excited to learn and who have networks that can help your company grow.
Right Connection and Network
If you’re set on a particular incubator, just applying to it isn’t normally enough; it is important to know whom can you approach to get into it. These days, with the rapidly increasing number of startups, the competition to be accepted into an incubator is also growing quickly. Armed with a good reference, the chances of getting into an incubator becomes higher. This is why they say networking and connections are very important for any startup.
Make sure to review the people in your network. Know a founder who’s been through an incubator process? Have you ever met or worked with a mentor from one of these incubators in the past? These existing relationships can all be leveraged into opportunities for opening doors to incubators, so that you subsequently have the chance to forge even more relationships.
It’s probably a known fact, and if it isn’t, it should be, that the fee required for being admitted into an incubator is usually an exchange of equity in your company. Figure out how much you are ready to spend for being in an incubator and also see if it is worth. Five percent is a relatively common figure. However, it is always the safest route to consult a legal expert, who can help you with the final agreement.
Choosing the right incubator is like choosing quality seeds with the best soil for sprouting and growth. You don’t want to waste your time and resources being misdirected. Make sure to spend a good amount of time researching the incubators you’re applying to.